Contract Choice, Governance Mechanisms And Food Quality And Safety Control: Case Study On A Group

With the improvement of the economic development and people’s livingstandards, there is a growing emphasis on food safety, for agricultural products morestringent requirements.High nutritional value, freshness and safety of high-quality fresh produce moreand more people of all ages. Therefore, how to effectively protect the supply ofhigh-quality, safe food is related to people’s lives become key issues. However,domestic food quality and safety issues are common, a direct result of reducedconsumer confidence, affecting the development of China’s modern agriculture andfood processing industries. This paper from the perspective of transaction cost theoryand contract theory research on food safety issues, to illustrate the entire food supplychain in different transactions between the upstream and downstream nodes (mainlyanalyzes the relationship between producers and processors), different contractoptions and their impact on the governance mechanisms of food safety, as well as theinternal mechanism to produce this effect, thus providing theoretical support to solvefood safety problems.In this paper, to improve food quality and safety as a starting point, through acomprehensive analysis of relevant research results at home and abroad to transactioncost theory, contract theory and governance theory as the theoretical basis, combinedwith the actual situation in China, in the form of case studies of China’s largest food agroup processing enterprise-depth case studies. The food industry throughout thesupply chain, including production, processing, storage, transportation and marketingand other aspects, this paper will focus on the mechanism of transactions andcontractual relations affect the production and processing of food materials betweenthe two phases of food quality and safety. This paper has two main research lines:First, A Group-owned hog industry chain, the other is A group of foreign purchases ofpig supply chain. Firstly, the proposition put forward the hypothesis by way of theoretical analysis, followed based on the collected data, in accordance with thenorms of the case study method to collate, analyze and verify the previously proposedresearch proposition.This study showed that the quality and safety of food and food enterprisesinternal governance mechanisms are closely related. The degree of specificity partiesto the transaction (other business groups and supply chain) assets, the frequency oftransactions greater impact on corporate governance model and select the contractmodel. As a food processing enterprises, in the foundation to ensure food quality andsafety, will choose the best trading patterns and governance mechanisms based on thethree dimensions of transaction costs. Articles successfully validated previouslyproposed six theoretical propositions, with case demonstrates the leading enterprisegovernance model, height, size of transaction frequency of specific assets, to supplyquality requirements level, cooperation length of time as well as leading enterprisereputation mechanism Economic impact of the mechanism on food quality and safety.