Selecting Cases

The second of Eisenhardt’s (1989a) steps is selecting cases. This section covers the dairy co-operatives who participated and the underlying reasons for their selection. The unit of analysis is covered in section 6.2.2.1 below. Careful theoretical, not random, selection is required so that co-operatives and their

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boards that contribute the most in terms of ‘information richness’ to the research, are selected.

The method suggests that the cases be selected from a specified population (Eisenhardt, 1989a, p. 537), which in this instance is New Zealand and Australian dairy co-operatives. The selection is purposeful and strategic, allowing greater focus on the research question and answering calls for more focussed contextual research (Cornforth, 2004; van der Walt et al., 2002). By concentrating on New Zealand and Australia, co-operatives and the (bovine) dairy industry, the selection from the specified population helps control

“extraneous variations” (Eisenhardt, 1989a, p. 537). Golden and Zajac (2001) observe that a single industry study substantially minimises the “confounding effects of external contextual variables (e.g., industry life cycle, regulation)”

(p. 1095). This is important as contextual and environmental variables may affect the various functions performed by the board of directors (Ravasi &

Zattoni, 2006, p. 1699). By sampling from a specified population, the risk of creating overly complex theories at the cost of parsimony is reduced (Eisenhardt, 1989a; Parkhe, 1993). Doing so also “sharpens external validity”

and “helps to define the limits for generalizing the findings” (Eisenhardt, 1989a, p. 537).

The cases represent theoretical not opportunistic, random or statistical sampling. This focuses the research effort on cases that are theoretically useful.

As Eisenhardt (1989a) states, “the goal of theoretical sampling is to choose cases which are likely to replicate or extend the emergent theory” or to fill

“theoretical categories” and provide “examples of polar types” (p. 537).

Eisenhardt and Graebner (2007) extend the understanding of theoretical sampling suggesting “cases are selected because they are particularly suitable for illuminating and extending relationships and logic among constructs … replication of findings from other cases, contrary replication, elimination of alternative explanations, and elaboration of the emergent theory” (p. 27). That is, cases within the scope of the investigation and which contribute the most in terms of “information richness” to the research, are selected.

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The companies selected each represent co-operatives, in that they conform to USDA co-operative principles (i.e., they are user-owned, user-controlled and user-benefited (Barton, 1989a), as outlined in Chapter 2). All cases are in the dairy industry with each co-operative involved in the collection, (extensive) manufacture and marketing (internationally) of its supplier-shareholders’ milk and milk products. This vertical integration, being part of co-operative economic theory, also allows directors to display a variety of roles relating to the governance of their co-operative. The selection criteria and rationale are highlighted in Table 6-2.

Table 6-2 Case Selection Criteria

Criteria Measure Reason Distinctions

The context of this research

Differences in levels of shareholding value ranging from ‘nominal value’

to ‘fair value’. Variations in the timing of withdrawal of capital from the co-ops. Differences in voting ranging from ‘one-farm-one-vote’ to

‘proportional-to-patronage’

Dairy Over 50% of income from dairy related products

The context of this research

To reduce extraneous variables

Differing product ranges, markets and distribution channels

Differences in percentages of users on the board. See section 7.6.1.1

‘Composition’ , in particular, Table 7.7 for details of distinctions

Vertically

Three cases in each of New Zealand and Australia. Some offshore processing

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All co-operatives selected meet the case selection criteria and provide a large sample of the population of concern. While these co-operatives are distinct in that they vary in size, geography, strategically, by product offerings and by distribution channels (e.g. with revenues from over $100 million to over $19 billion (2007/2008 Annual reports)), they are all similar in that they concentrate on the collection, processing and marketing of milk products for the benefit of their supplier-shareholders. All cases fit within the scope of the study.

The number of cases selected for this study is a mix of the need for

“information richness” (Perry, 1998), “careful comparison” (Pettigrew, 1997),

“theoretical saturation” (Glaser & Strauss, 1967) and pragmatism. The need for pragmatism occurs at two levels; first, by the limited number of possible cases in the population and secondly, the need to avoid death by “data asphyxiation”

(Miles & Huberman, 1994). Various case study writers suggest differing numbers of cases in multi-case research. Perry (1998) suggests between four and ten cases, Pettigrew (1997) between six and ten, Yin (1994) four to six, and Eisenhardt (1989a) sees the need for between four and eight cases. For this research, six co-operative dairy companies are selected; there are three each from New Zealand and Australia. Initial cases are analysed and extra cases added in line with the criteria outlined by the Eisenhardt (1989a) method to

“extend or replicate emergent theory”. Cases stop being added at the point where theoretical saturation is reached (Glaser & Strauss, 1967) (covered in section 6.2.8.1 below).

While this study uses theoretical sampling, the research frame encompasses the entire population of New Zealand (bovine) dairy co-operatives. The inclusion of both New Zealand and Australian dairy co-operatives allows an adequate number and range of cases to be chosen. There are a limited number of dairy co-operatives from which to source cases. Continued amalgamations (driven largely by economies of scale) and industry dynamics have led to a reduction in the number of dairy co-operatives generally.

90 6.2.2.1 Unit of Analysis

The unit of analysis relates to the “fundamental problem of defining what the

‘case’ is” (Yin, 1994, p. 21). The most appropriate unit of analysis for research is often indicated by the research questions (Benbasat et al., 1987; Yin, 1994).

Previous literature may also be an important guide (Yin, 1994, p. 25). Miles and Huberman (1994) define a case “as a phenomenon of some sort occurring in a bounded context. The case is, in effect, your unit of analysis” (p. 25). The unit of analysis selected in this research is the governing boards of directors of the dairy companies in the cases (co-operatives) outlined above. The persons included within the unit of analysis are the board of directors (as listed in annual reports). The boards comprise a variety of director “positions”

including the chairperson (and possibly a deputy chairperson), supplier-shareholder directors, outside non-executive non-supplying-supplier-shareholder directors bought on for their specialist skills, and any executive directors.

In summary, theoretical sampling from a specified population is used to identify six cases for the development of a theory of the roles of governing boards of dairy co-operatives in New Zealand and Australia. The six cases are in the New Zealand and Australian dairy industry and, in line with Eisenhardt’s (1989a) framework, represent both theoretical and literal replication. The reasons for the cases selection are given. The unit of analysis for this research is described. The crafting of instruments and protocols is now addressed.