The paper analyses aspects of the incentive structures of a co-operative organizational form called a retail buying group. It is suggested that the incentive structure which is devised or which emerges to ensure member loyalty and commitment will influence group development in terms of the scope of activities undertaken, membership size and feasibility of maintaining a co-operative structure. Two aspects of the incentive structure, the rule for sharing co-operative surplus and decisions about the level of collective savings are viewed as major factors shaping group outcomes.
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