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Purpose: This study investigates the effects of the internal and external tie strength of the board of directors (BOD) on the performance in Consumer Co-operatives, which provide consumer-members with goods, especially eco-friendly food and products in South Korea. Co-operatives based on the principle of democratic governance can make their core competence through unique resources and trust of co-operatives. It is hypothesized that the strong tie of BODs improves the performance of consumer co-operatives because if the tie of BODs is strong, information and knowledge would be better shared among members, which would help to improve the ability to solve the problems of organizations. Research design, data, and methodology: This study uses multiple regression models to analyze the relationship between the tie strength of BODs and performance. The tie strength of BODs has three parts: the tie strength within a BOD of each co-operative; the tie strength between a BOD and the other co-operatives; the tie strength between a BOD and local government. Organizational performance is sub-categorized into three: social, democratic and business performance. We targeted 95 iCOOP consumer co-operatives and distributed questionnaires to their BODs. The final sample is composed of 371 board members from 65 iCOOP consumer co-operatives. Results: The regression results show that the tie strength within a BOD as well as the tie strength between a BOD and the other co-operatives have significantly positive relation to democratic and business performance. All exploration variables, however, do not affect social performance of co-operatives and the tie strength with local government is not related to any performance dimension. Conclusions: The results mean that if consumer co-operatives seek to have better democratic governance and to improve business performance, they should pay more attention to and strengthen the tie within a BOD and ties with other co-operatives through various activities and policies.
