Agricultural cooperatives are increasingly positioned as intermediary institutions capable of facilitating sustainability transitions, circular agriculture, and participation in emerging bioeconomy systems. However, limited research has examined the institutional readiness of cooperatives to assume this transformative role, particularly within structurally constrained environments. This study addresses that gap by analyzing how governance capacity and operations management systems shape cooperative institutional performance and readiness for sustainability transitions in South Africa’s dual agricultural economy. Grounded in an integrated theoretical framework combining Institutional Adaptation Theory, the Social Economy Framework, and Sustainable Food Systems Theory, the study conceptualizes cooperatives as adaptive institutions balancing economic survival, social legitimacy, and environmental participation. A quantitative causal-explanatory design was employed, drawing on survey data from primary agricultural cooperatives across all nine South African provinces. Multiple regression analysis was used to examine the effects of governance structure, financial management, strategic planning, and supply chain efficiency on member satisfaction and operational performance. The findings reveal that financial governance (β = 0.42, p < 0.001) and strategic planning capacity (β = 0.33, p < 0.001) are the strongest predictors of member satisfaction, with the model explaining 61% of variance (R² = 0.61). While cooperative principles such as democratic participation and community concern are normatively endorsed, their operationalization remains moderate, reflecting institutional capacity constraints rather than ideological misalignment. Evidence suggests that cooperatives engage in institutional bricolage—prioritizing economic survival and financial coordination—as an adaptive response to structural inequality, fragmented institutional support, and scarcity. The study advances theory by reframing institutional bricolage as a staged transformation enabler, positioning financial governance as a foundational sustainability condition, and proposing a hierarchical institutional capacity model for cooperative transformation. Rather than treating sustainability transition as an outcome of normative commitment alone, the findings demonstrate that institutional maturity, particularly in governance and financial systems, constitutes the primary precondition.

Keywords

Agricultural Cooperatives, Governance, Cooperative Principles, Financial Management and Economic Survival.