North American Bison Cooperative and North Dakota Natural Beef LLC: Governance of a Contractual Alliance
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In 2005, North American Bison Cooperative formed a contractual alliance with
North Dakota Natural Beef, LLC. The alliance was formed in order to enable the
cooperative to enhance returns from its physical and managerial assets by entering
the natural beef market. This case describes the resources shared by the cooperative
and LLC, how the alliance was governed, the risk of opportunism by the CEO
and associated trust building and control mechanisms, and the benefits cooperative
members received. Although the two companies operate under different business
principles, cooperative members exercise indirect control over the resources they
contribute to the venture.