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ERE32E Co-operative Business
Bridget CarrollCentre for Co-operative Studies, University College Cork, Ireland
Session 2: Principles
Distinguishing co-ops
Conventional companies use the difference between the cost and selling price as profit for investors
Co-ops will either Refund some of the difference to
members Retain as common property of
co-op/invest in the co-op Invest for other social purposes
Possible problems with conventional (investor owned) companies
Short-term decision-making
Profit maximising Bonuses Concentrated
ownership Not realising
creative capacity of workers
Decisions not in interests of consumers/workers/community
Ownership from a distance
Speculation
Co operative Principles
How might you operate a business that benefits members not investors?
How do you put certain values into practice?
Guidelines for how co-ops operate Principles not legislated for in every
country
Co-op Principles
1. Voluntary & Open Membership2. Democratic Member Control3. Member Economic Participation4. Autonomy & Independence5. Education, Training & Information6. Co-operation Among Co-operatives7. Concern for Community
Open and voluntary membership Open to
All who can use the services Should be willing to accept
responsibilities of membership Regardless of age, gender, politics Nominal shareholding required May be other requirements – e.g.
must supply (milk), must live in a certain area
Democratic Member Control Co-op democratically controlled –
active participation One-member:one vote, regardless of
shareholding* Operationalised at AGM primarily Other opportunities for member
participation? The bigger the co-operative, the
lesser the democracy?
Member Economic Participation Capital of co-operative contributed to and
democratically controlled by the members Members usually receive limited
compensation Distributed according to use Issued as bonus shares Reinvest (with agreement of members)
Autonomy and Independence
Autonomous, controlled by members Should remain independent of state
supports but depends on market position
Not always easy!
Education, Training and Information
Education for members Training and education for management,
volunteers, staff Information to general public,
government, EU etc. Visibility of co-ops Co-operative marketing – for education?
For differentation? For sales? .coop - internet domain name
Co-operation among co-operatives
Based on recognition of benefits of supporting each other
Work together within movements and between movements
Work together locally, regionally, nationally, internationally
Trade together
Concern for community
Sustainable development of local communities
Sponsorship Ethical policies/investments Responsible lending, packaging etc Environmental protection Job creation initiatives www.co-operativebank.coop /
www.vancity.com
Application of co-op principles? Open membership - subject to “common
bond” and legislation/regulation Democratic member control through Annual
General Meeting (AGM) Minimum shareholding, distribution according
to savings Each credit union is independent Education, training and information? Co-operation among co-operatives – through
chapter and league, Concern for community – many examples
E.g. social lending, money advice
Homework!
This afternoon: Read chapters 2 & 3 of The
Competitive Advantages of Co-operatives.
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