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Introduction to Co-operativesIntroduction to Co-operatives
September 2005September 2005
Who Who owns the enterprise?owns the enterprise? Who controlsWho controls the enterprise? the enterprise? Who uses the enterprise?Who uses the enterprise? Who gets the profits?Who gets the profits?
A Type of Enterprise Dependent OnA Type of Enterprise Dependent On
Individually Owned BusinessIndividually Owned Business
One PersonOne Person OwnsOwns ControlsControls OperatesOperates Benefits/ProfitsBenefits/Profits
Private CompanyPrivate Company Investors as ownersInvestors as owners Profits shared among Profits shared among
investorsinvestors Voting weighted Voting weighted
according to the according to the number of share number of share investmentinvestment
What is a Cooperative?What is a Cooperative?
..
A cooperative is an autonomous association of persons united
voluntarily to meet their common economic, social and cultural
needs and aspirations through a jointly owned and democratically
controlled enterprise.
Co-operative PrinciplesCo-operative Principles
1.1. voluntary and open membershipvoluntary and open membership;;2.2. democratic member controldemocratic member control;;3.3. member economic participationmember economic participation;;4.4. autonomy and independenceautonomy and independence;;5.5. education, training and informationeducation, training and information;;6.6. cooperation among cooperativescooperation among cooperatives;;7.7. concern for communityconcern for community..
Democratic member controlDemocratic member control
The people who own and control and finance the co-operative are those who use it.
Democratic member control is Democratic member control is exercised by:exercised by:
Voting at annual and Voting at annual and membership meetingsmembership meetings
Electing Board of DirectorsElecting Board of Directors Making decisions on major Making decisions on major
co-operative issuesco-operative issues
Co-ops Principles and PracticesCo-ops Principles and PracticesCo-operative Principles and Practices Principles PracticesVoluntary and open membership Member recruitment policy, rules of
admission, equal opportunities,
Democratic member control Constitution, voting rights, role of the board, members and management
Member economic participation Economic performance, rewards to members, capitalization and how surplus is used
Autonomy and independence Relations with government, other organisations and institutions and market position,
Education, training and information Member, board and management training and public relations
Co-operation among members Federation, networks, joint enterprises, movement building
Concern for community Policy on community development, environment and networking
Co-operative ValuesCo-operative Values
self-helpself-help;; self-responsibilityself-responsibility;; democracydemocracy;; equalityequality;; equityequity;; solidaritysolidarity..
Types of Co-operativesTypes of Co-operatives Co-operatives can be distinguished by:Co-operatives can be distinguished by:
degree of formalitydegree of formality ownershipownership type of activitytype of activity level in the « cooperative hierarchy »level in the « cooperative hierarchy »
These types can be combinedThese types can be combined
Degree of formalityDegree of formality Informal groups build on co-operative Informal groups build on co-operative
principles; example: stokvelsprinciples; example: stokvels Pre-co-operatives or common initiative Pre-co-operatives or common initiative
groupsgroups Fully fledged, registered co-operativesFully fledged, registered co-operatives
Ownership and PurposeOwnership and Purpose The worker-owned co-operativeThe worker-owned co-operative: the : the
individual members are both workers and individual members are both workers and employers of the jointly owned co-employers of the jointly owned co-operative enterprise. Its purpose is to operative enterprise. Its purpose is to provide employment to its membersprovide employment to its members
The user-owned co-operativeThe user-owned co-operative: members : members have their own enterprise or household have their own enterprise or household and use the cooperative for joint supply, and use the cooperative for joint supply, marketing, finance, housing etc. Its marketing, finance, housing etc. Its purpose is to provide services to its purpose is to provide services to its membersmembers..
Type of activity (1)Type of activity (1) Economic activitiesEconomic activities
agricultural marketing & supply;agricultural marketing & supply; savings & creditsavings & credit consumer good supplyconsumer good supply transporttransport shared services (business)shared services (business) handicrafts and small industrieshandicrafts and small industries servicesservices
Type of activity (2)Type of activity (2) Social servicesSocial services
HousingHousing Social reintegrationSocial reintegration HIV-AIDS careHIV-AIDS care Medical servicesMedical services
OthersOthers Musician co-operativesMusician co-operatives Soccer fans co-operativesSoccer fans co-operatives
ConsumerConsumercooperativecooperative
Individuals and EnterprisesIndividuals and Enterprises
MemberMember
MemberMember
MemberMember MemberMember
MemberMember
MemberMemberPurchasingPurchasingcooperativecooperative
SMESME
SMESME
SMESME SMESME
SMESME
SMESME
Structure of co-operation (1)Structure of co-operation (1)Co-ops can co-operative by membership formCo-ops can co-operative by membership form Primary Co-op StructurePrimary Co-op Structure - Individuals are - Individuals are
direct membersdirect members Secondary Co-op StructureSecondary Co-op Structure- Primary co-ops - Primary co-ops
are direct membersare direct members Tertiary Co-op StructureTertiary Co-op Structure – Secondary and/or – Secondary and/or
primary are both are direct membersprimary are both are direct members
Structure of co-operation (2)Structure of co-operation (2) Co-ops can economically co-operation by Co-ops can economically co-operation by
geographygeography.. LocalLocal – organized on a municipality level – organized on a municipality level RegionalRegional – –
organised at district or metro levelsorganised at district or metro levels ProvincialProvincial – organised by numbers districts and metros – organised by numbers districts and metros National – organised by provincesNational – organised by provinces InternationalInternational – organised by national co-op – organised by national co-op
movementsmovements
Primary Co-op StructurePrimary Co-op Structure
Co-operative
Member MemberMember
Secondary Co-op StructureSecondary Co-op Structure
Co-operative
PrimaryCo-op
MemberMember
LocalCo-op
Member Member
Organizational Make-UpOrganizational Make-Up
Members
Board of Directors
Manager
Employees
Tertiary Co-op StructureTertiary Co-op Structure
Co-operative
MemberMember
PrimaryCo-op
SecondaryCo-op
SecondaryCo-op
PrimaryCo-op
PrimaryCo-op
MemberMember
Participation RolesParticipation Roles
Co-operatives operate through Co-operatives operate through the roles of principal partiesthe roles of principal parties
MembersMembers DirectorsDirectors ManagerManager EmployeesEmployees
A national Movement (1)A national Movement (1) There are currently 4,000 primary co-ops in SAThere are currently 4,000 primary co-ops in SA
Worker co-opsWorker co-ops Housing co-opsHousing co-ops Consumer co-opsConsumer co-ops Agricultural co-opsAgricultural co-ops Financial co-opsFinancial co-ops
A National MovementA National Movement There are 3 national co-operative federationsThere are 3 national co-operative federations
Savings and Credit Co-operative Leaque of SA Savings and Credit Co-operative Leaque of SA (SACCOL)(SACCOL)
South African Federation of Burial Societies South African Federation of Burial Societies (SAFOBS)(SAFOBS)
South African Housing Co-op Association (SAHCA)South African Housing Co-op Association (SAHCA) There is 1 Tertiary co-op – national co-operative There is 1 Tertiary co-op – national co-operative
apex organization:apex organization: National Co-operative Association of South AfricaNational Co-operative Association of South Africa
3 co-operative federations – representing 80,000 members3 co-operative federations – representing 80,000 members 600 primary co-ops representing 167,000 members600 primary co-ops representing 167,000 members
A Global MovementA Global Movement 750 000 cooperatives750 000 cooperatives 800 million individual members – many of them 800 million individual members – many of them
womenwomen 100 million jobs created100 million jobs created Over 50% of global agricultural output is marketed Over 50% of global agricultural output is marketed
through cooperativesthrough cooperatives 470 billion $ of savings mobilized by credit unions470 billion $ of savings mobilized by credit unions Cooperatives are world’s biggest health insurerCooperatives are world’s biggest health insurer