Cooperatives

CURRICULUM AND STUDY MATERIAL

MODULES 1-3

Sigrún Lilja Einarsdóttir
Emil Bjarni Karlsson

CENTRE FOR RETAIL STUDIES
BIFRÖST UNIVERSITY – DEPARTMENT OF LIFELONG LEARNING

Table of Contents

Introduction ........................................................................................................................................ 4
1 Module 1: History, ideology and status of the cooperative movement .......................................... 5
1.1 Module description ......................................................................................................................... 5
1.2 Learning outcomes ......................................................................................................................... 5
1.3 Target groups .................................................................................................................................. 6
1.4 Module 1 -‐ Reading material for students ...................................................................................... 7
1.4.1 What is a cooperative? ............................................................................................................ 7
1.4.2 The origins of the cooperative movement – fulfilling a need .................................................. 8
1.4.3 The first cooperatives – The Rochdale Pioneers ...................................................................... 9
1.4.4 The 7 Cooperative Principles ................................................................................................. 10
1.4.5 Different forms of cooperatives ............................................................................................ 13
1.4.6 Cooperatives in Europe – Facts, figures and general attitudes ............................................. 16
1.4.7 The cooperative movement in Finland .................................................................................. 17
1.4.8 The Cooperative movement in Iceland .................................................................................. 19
1.4.9 The Cooperative movement in Trentino, Italy ....................................................................... 21
1.4.10 The cooperative movement in Poland ................................................................................ 23
1.4.11 The cooperative movement in Sweden ............................................................................... 25
1.5 Assignments and exercises ........................................................................................................... 27
1.5.1 Surveys and questionnaires ................................................................................................... 27
1.5.2 Discussions ............................................................................................................................. 27
1.5.3 Tools / Writing assignments .................................................................................................. 27
2 Module 2: Being a cooperative member ....................................................................................... 28
2.1 Module description ....................................................................................................................... 28
2.2 Learning outcomes ....................................................................................................................... 28
2.3 Target groups ................................................................................................................................ 29

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2.4 Module 2 -‐ Reading material for students .................................................................................... 29
2.4.1 Being a cooperative member – what does it mean? ............................................................. 29
2.4.2 What do the 7 principles of cooperatives say about cooperative membership? .................. 30
2.4.3 Being a cooperative member in Iceland ................................................................................ 31
2.4.4 Becoming an active cooperative member ............................................................................. 33
2.5 Assignments and exercises ........................................................................................................... 34
2.5.1 Surveys and questionnaires ................................................................................................... 34
2.5.2 Discussions ............................................................................................................................. 34
2.5.3 Tools / Writing assignments .................................................................................................. 34
3 Module 3: Establishing a new cooperative business ..................................................................... 35
3.1 Module description ....................................................................................................................... 35
3.2 Learning outcomes ....................................................................................................................... 35
3.3 Target groups ................................................................................................................................ 36
3.4 Module 3 -‐ Reading material for students .................................................................................... 37
3.4.1 Starting a cooperative – what do you need to keep in mind? ............................................... 37
3.4.2 Setting up a cooperative in 7 steps ........................................................................................ 38
3.5 Assignments and excercises .......................................................................................................... 43
3.5.1 The Wheel (and other tools from Coompanion Skaraborg) .................................................. 43
3.5.2 Making a business plan .......................................................................................................... 44
4 Further readings ........................................................................................................................... 45
Useful websites ...................................................................................................................................... 49

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Introduction

This study booklet is a result of the project Conventus – Learning Model for Cooperatives and its aim is
to provide study material for groups and individuals who aim at starting up a new cooperative and also
for members of existing cooperatives.

This booklet is a teacher´s copy and includes descriptions of 3 different modules, learning outcomes,
suggested target groups, study material and assessment tools for each module.

The modules presented in this study material are:

• Module 1 – History, ideology and status of the cooperative movement
• Module 2 – Being a cooperative member
• Module 3 – Establishing a new cooperative business

The Conventus project is also developing 2 more modules (Module 4 – Managing a cooperative and
Module 5 – Developing existing cooperatives) and for Iceland, these modules will be developed on a
later stage since the first two modules fit the Icelandic scenery at the moment. There are very few
cooperatives in Iceland in the present day, no public debate existing on the cooperative form and few
experts in cooperatives at present.

The study material is designed from a pragmatic perspective, aimed at individuals with a diverse
background and education, based on material from partner countries in the Conventus project. Further
description of each module (module description, learning outcomes, target groups, study material and
assessment) can be found in each chapter.

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1 Module 1: History, ideology and status of the cooperative
movement

1.1 Module description

This module aims at introducing highlights of the history, background and ideology of the cooperative
movement, specifically the origin of the movement on European level and the history and development
on national level in every partner country. The aim is also targeted at increasing members’
understanding on how cooperatives are a different kind of business and how to put cooperative
principles and values into action. This module can be used as an introductory part along with one or
more of the following modules.

Special focus will be put on creating cooperative attitudes. Cooperative values and principles are
discussed and introduced with the purpose of making cooperative members, workers, managers, board
members, co-‐operators to-‐be and other target groups aware of the ideology of the cooperative thinking
and how to incorporate this philosophy into their work and everyday life.

The status of the cooperative movement, both on EU/world level and on national level (of partner
countries) will be introduced and finally, the general attitudes towards cooperatives and the future of
the cooperative movement will be discussed and debated.

1.2 Learning outcomes

Knowledge / attitudes
After this module, student should …
• have acquired basic knowledge of the origins of the cooperative movement
• be aware of the historical context of the cooperative movement both EU/worldwide and the
historical development of the cooperative movement in their home country
• have increased awareness about how cooperatives are a different kind of business
• Evaluate his/her own perceptions and perspectives towards the cooperative ideology

Skills / useful tools
After this module, students should …
• Be able to define a cooperative
• Be able to incorporate the cooperative ideology into their work and everyday life

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• Be able to use the cooperative ideology as a guiding light in their work / to be active members in
the cooperative

1.3 Target groups

This module can be aimed at different target groups whereas it is important for every person associated
with a cooperative to be aware of the origins and ideology of the cooperative movement:

• Cooperative members
• Cooperative workers
• Cooperative managers
• Cooperative board members
• Employees, managers and board members at cooperative unions
• Co-‐operators to-‐be
• Cooperative trainers and advisors

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1.4 Module 1 -‐ Reading material for students

1.4.1 What is a cooperative?

A cooperative is like any other business but it is
owned and run by its members, who share
fundamental values that have been formulated
in the seven cooperative principles (see further
in section 1.4.4.). Members can be either the
customers themselves, employees or simply
users (like in housing cooperatives). The idea is
that every member of a cooperative has an
equal say about how the cooperative is run and
they get an equal share in the profits. The key is Image 1: The logo for the International Year of
one member = one vote – it doesn´t matter how Cooperatives, 2012.
many shares this individual owns, he/she only
gets one vote. That is the one of the main characteristic of a cooperative that distinguishes it from other
types of enterprises – the emphasis on democracy and social responsibility. Another important
characteristics are the concepts of joint ownership – owning together – and the democratic control of
cooperatives.1

The cooperative identity can be described as such:

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
2
and democratically -‐ controlled enterprise.

Cooperatives are business driven companies – however, as previously mentioned, they are driven by
specific values and principles that are shared and internationally agreed. The main aim of these
principles is to build a better world, emphasize on sustainable enterprises and generate jobs and
prosperity.

To put things in perspective, next section will describe the origin of the cooperative movement and the
cooperative values.

1
See further here. Further reading: Birchall, J. (1997). The International Cooperative Movement. Manchester University Press.
2
See further here .

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1.4.2 The origins of the cooperative movement – fulfilling a need

Why were cooperatives established in the first
place? The overall aim of the cooperatives was
to fight poverty and unstable working
conditions of the general public in the latter
part of the 19th Century, especially in Britain
and France. In the late 18th Century, societies in
Europe had undergone major societal changes.
Factories emerged; all the labour force that
used to work in agriculture moved to the cities
to work in major enterprises where conditions
were unstable and unsanitary.

Big growth of capital and hard competition
Image 2: The industrial era in Great Britain – see
between industrial enterprises caused cuts in
https://www.mtholyoke.edu/courses/rschwart/ind_rev/imag
workers’ salaries, which then caused poor es/indust.html.htm
conditions of labour workers. Men, women and
even children had to work for long hours for low salaries. Unemployment rate increased and there was
no job security since no labour unions existed (no cooperation between labour workers against their
employers).

Due to these poor conditions, the ideology and the model of a cooperative emerged from a need – as an
answer to poverty and in order to give the public better lives. Poverty among farmers and the working
class was a consistent problem, particularly in rural areas where the public had difficulty of accessing
affordable goods and services.

The major reasons of establishing cooperatives were numerous, e.g. to purchase in bulk to achieve
lower prices, increase bargaining power, share common costs of new technology, add value to
agricultural products for farmers, gain access to new markets, obtain new services and provide credit
under reasonable terms. The aim was in a nutshell to achieve economy of size and reduce risks
associated with new enterprise – thus to create a stable environment for the public to access service

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and goods for reasonable prize and as well for farmers and small producers to get reasonable prices for
their products and the possibility to have access to a stable market.3

Trentino area in Northern Italy is an example of an area with strong cooperative tradition. Primarily in
one of the poorest areas in Italy in the 19th century, cooperatives were established in order to improve
the lives and living conditions of its inhabitants. Now, cooperatives play an important role in the
economy of Trentino and employment rate is low (see further in section 1.4.9).

In various countries, cooperatives have been strongly associated with political forces. In Iceland, for
example, the cooperative movement was associated with the Progressive party. The movement was
considerably widespread throughout Iceland in the 20th Century, until it collapsed in the 1990s. Since
then, few cooperatives have survived and not many have been established (see further in section 0).
According to CreditInfo, 31 cooperatives exist in Iceland at present (in June 2013). The general attitude
towards cooperatives in Iceland seems to be associated with the old cooperative movement and is
considered rather negative at the moment.

The Polish cooperative movement is another example where the cooperative movement in Poland has
been associated with communism. Therefore, the general attitude as well as government perspective is
rather negative towards the cooperative form in general (see further in section 1.4.10).

1.4.3 The first cooperatives – The Rochdale Pioneers4

The first company considered to use the cooperative
ideology was founded in Fenwick, East Ayrshire in England
in 1769, formerly as the Fenwick Weavers’ Society. This
cooperative was a consumer co-‐operative where its aim
was to practice collective purchasing for the benefit of
members, like bulk food items and books. The Society was
reconstituted and reconvened in 2008 as a cooperative in
memory of the heritage of Fenwick weavers. The
Rochdale Society of Equitable Pioneers established the

3
See further here. For further insight into the history of the coop movement, see for example Shaffer, J. (1999). Historical
Dictionary of the Cooperative Movement. Scarecrow Press.
4
Further readings on the Rochdale Pioneers: Holyoake, G. J. (2012/1923). The History of the Rochdale Pioneers, 1844-‐1892.
Nabu Press.

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Rochdale Principles in 1844, which formed a basis for development and growth of the modern
cooperative movement. These principles were based on the values of self-‐help, self-‐responsibility,
democracy and equality, equity and solidarity, honesty and openness, social responsibility and caring for
others. These principles are perceived as guidelines on running a responsible business for the
community.

1.4.4 The 7 Cooperative Principles5

What distinguish cooperatives from other forms of enterprises are the shared ethical and yet practical
values that form the basis for the organization and operation of a cooperative. These values have been
implemented into 7 principles, originally presented by the Rochdale Pioneers. The principles highlight
the ethical factor of the cooperative thinking, e.g. ethics as an essential aspect of the local economy:

1. Voluntary and open membership: Cooperatives
are open for all who want to use the service of
the cooperative and also accept the
responsibilities of membership. There is no
gender, social, racial, political or religious
discrimination regarding membership.

2. Democratic member control: Cooperatives are
democratic organizations that are run by their
members. Members set policies, make decisions
Image 3: A caricature from Von Pischke, J. D. &
regarding the organization of the cooperative and
Rouse, J.G. (2004). New Strategies for mobilizing
voting rights are equal; one member, one vote capital in agricultural cooperatives (online
(even though one member has more than one version, see
share). http://www.fao.org/docrep/007/y5469e/y5469e
00.htm#Contents

3. Member economic participation: Contribution of members is equitable and the cooperative
capital is common. Compensations of members are limited and the purpose of the use of
capital is to develop the cooperative and supporting other activities approved by the
membership. The members will benefit in accordance with their proportion of transactions with
the cooperative.

5
See for example here.

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4. Autonomy and independence: Cooperatives are autonomous, self-‐help organizations, which are
controlled by their members. External agreements and capital resources are depended on
democratic decisions among members.

5. Education, training and information: Cooperatives provide education and training for members,
elected representatives, managers and employees. The purpose of training, education and
providing information about the cooperative form is to contribute to the development of the
cooperative and to inform the general public on the nature and benefits of the cooperative.
Special emphasis is on informing young people.

6. Co-‐operation among cooperatives: The emphasis is to strengthen the cooperative movement
by cooperation, in order to create effective service for members and by establishing local,
regional, national and international structures.

7. Concern for community: Cooperatives aim at supporting sustainable development of their
communities through policies approved by members.

These principles serve as a guiding light in all aspects of the cooperatives. It is believed that cooperatives
which implement and apply these principles to their operations usually have longer lifespan and refrain
from risk-‐taking (which may diminish the danger of bankruptcy). In Trentino, Italy (as an example) the
cooperative movement emphasizes the chart of cooperative values, mutuality and solidarity as
‘constitutional foundations’ of cooperation and care of common good; social responsibility as
responsibility towards people who are directly involved in the cooperative, social effects of work and
development and welfare in society. The Trentino cooperative movement also highlights the inheritance
of Don Guetty, who was a priest who cared for the needs of his people; implementing the spirit of
cooperation and thus establishing a relationship between church and the world of work in Trentino. 6

6
See Cooperazione Trentina – public documents

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1.4.4.1 Case study -‐ The principles in practice: The Cooperative Group Ltd., UK7

The Cooperative Group in UK traces its roots to a small shop in
Lancashire and to the Rochdale Pioneers. Since 1844, The Cooperative
Group has emerged to one of the largest organization of its type in
UK. This enterprise is an example of a cooperative that puts the values and principles into action. The
values are:

• Self help – helping people to help themselves
• Self-‐responsibility – taking responsibility and answer for their actions
• Democracy – giving members a say in how the business is run
• Equality – no matter how much money a member invests in his/her share account, he/she still
has one vote
• Equity – the business is carried out in a way that is fair and unbiased
• Solidarity – sharing interests and common purposes with members and other cooperatives

The Cooperative Group has specific ethical values:
• Openness – nobody is perfect and the cooperative will not hide that it isn’t perfect
• Honesty – the cooperative is honest about what it does and the way it is done
• Social responsibility – people are encouraged to take responsibility for their own community and
work together to improve it
• Caring for others

This enterprise takes the principles of the Rochdale pioneers as a basis in their strategy and puts the
values into action:
1. Membership is open to everyone (even when the author of this text was living for a short period
of time in England, she was offered membership at the Cooperative group) (Voluntary and open
membership)
2. All members have an equal voice in making policies and electing representatives (Democratic
member control)
3. All profits are controlled democratically by members and for their benefit (Member economic
participation)
4. Cooperatives are always independent even when they enter into agreements with the
government and other organizations (Autonomy and independence)

7
See further here.

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5. Cooperatives educate and develop their members as well as their staff (Education, training and
information)
6. Cooperatives work together with other cooperatives to strengthen the cooperative movement
as a whole (Cooperation amongst cooperatives)
7. Cooperatives also work to improve and develop the community, both locally and internationally
(Concern for community)

As an example, The Cooperative Group has worked on tackling global climate change through
cooperative values and actions. The Cooperative Group is one of the largest supporters of renewable
energy programs where one of it´s objectives is to be one of the world’s leading businesses tackling
global climate change. Over 5000 branches are powered by renewable energy and all big businesses
report energy consumption and carbon emission on regular basis.

The cooperative has supported initiative projects in climate change, like installing photovoltaic panels at
schools across the UK; building the UK’s largest solar panel project; supporting the construction of six
new wind turbines and building the largest in-‐house office waste-‐recycling centre in the UK.

1.4.5 Different forms of cooperatives8

There are four different mainstream forms of cooperative enterprises existing in today’s economy:

Firstly, there are consumer cooperatives which aim is to provide members with goods and services for
their personal use. Examples of consumer cooperatives are food cooperatives, credit unions, housing
cooperatives and insurance cooperatives.

8
See further here. For further insight into the history of the coop movement, see for example Shaffer, J. (1999). Historical
Dictionary of the Cooperative Movement. Scarecrow Press.

13

Coop Italia Societá Cooperativa was established in 1947, with 56.700
employees and 7.400.000 members. It consists of 115 consumer
cooperatives and is the largest retail chain in Italy with about 18.8%
market share and is one of the leading supermarket chains in Europe in terms of corporate
social responsibility (according to global consumer watchdog Consumers International). In
1995, Coop Italia introduced its private label Fair Trade product (coffee) under the solidal
brand. The company also established the Coop private label, which implemented the
SA8000 (Social Accountability) certification in order to maintain ethical standards on
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topics like safety on workplace and anti-‐child labour practices.

Secondly, producer / marketing cooperatives which market their members´ products and services
directly. Some cooperatives may also sell the input necessary to their members’ economic activities.
Examples of producer / marketing cooperatives are agriculture cooperatives, pooling of equipment,
advisory services and negotiations of prices with buyers. Another characteristic of a producer /
marketing cooperative is the way of assembling products from smaller units / producers into larger
quantities to processors, wholesalers and retailers. Agricultural cooperatives are an example of producer
/ marketing cooperatives.10

First Milk, a dairy cooperative in UK is an example of a producer /
marketing cooperative, with 700 employees and 2000 members. In their
coop story, they emphasize that ‘through our members, partners and
joint ventures, co-‐operation means working with like-‐minded who share
our ambitions, passion and sustainability beliefs.’ First milk has five different strategic
´drivers’: a) Driving returns for its farmer members; b) growing its brands; c) diversifying
its product and customer base; d) lowering its cost to serve and e) seeking value in
partnerships. Following this strategy, the company has grown over the last few years,
expanded markets and resulted in robust business in the benefit for its members. The
cooperative produces a large number of dairy products which are sold all over UK, every
11
1.5 seconds.

9
See further here and here.
10
For more information on agricultural cooperatives – see Von Pischke, J. D. & Rouse, J. G. (2004). New strategies for
mobilizing capital in agricultural cooperatives. Rome: Food and Agriculture Organization of the United Nations.
11

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Thirdly, worker cooperatives provide cooperative members with work by operating an enterprise
owned by their employee members. Examples of worker cooperatives are forestry cooperatives, leisure
cooperatives, production and manufacturing cooperatives, tourism cooperatives, social cooperatives
(especially cooperatives established and communications cooperatives) and marketing cooperatives.
Another form, worker-‐shareholder cooperatives, consists of incorporated cooperatives that hold partial
ownership of the business in which the members are employed. Because of its share capital, the
cooperative may participate in the management of the business and the workers may influence work
organization.

‘Kooperativet Lärkan’ in Sweden is an example of a worker
cooperative. Lärkan has 36 members / owners and was
established in 2005. This cooperative has various types of
activities, for example a second hand store, gardening service, bike-‐repair garage and a
café. The vision of the cooperative is to help as many people as possible to get a fulfilled
life and empowerment. Everybody is of equal value and everyone deserves and also has
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the right to have a good life.

The fourth form, purchasing and shared service cooperatives, are multi-‐stakeholder cooperatives
where membership is made of different categories of members who share a common interest in the
organization. Those cooperatives belong to small, independent businesses and municipalities. Examples
are home care service cooperatives, health cooperatives and community service cooperatives (or social
cooperatives).

The Robert-‐Cliche Health Co-‐operative is located in Beauce

region, Quebec in Canada. It was established in 2008 with 10
employees and 4700 members. Its main role is to address
concerns in its region; aging population, retiring doctors (causing
it difficult to recruit young doctors), medical equipment out-‐of-‐date and no new
physicians practice (since 1994). Today, The Robert-‐Cliche Health Co-‐operative’s
membership number is increasing as it offers medical service to the inhabitants of the
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region.

12
See further here.
13

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Financial or credit cooperatives are another form of shared service cooperatives. Cooperative banks, for
example, provide their members with a wide range of banking and financial services. Cooperative banks
must respect banking regulations but what differs them from other banks are the values and principles
that cooperative banks must implement in their everyday activities.14

POP Pankki Group is an association of 36 independent
cooperative banks in Finland, founded in 1997 with 709
employees and 108.711 members. Cooperative banks are considered important in Finland
and have one-‐third of bank-‐market share, which is one of the highest in Europe. Originally,
these banks belonged to the Central Cooperative Banking Group (OP Group) but split from
it in the 1990s. In general, cooperative banks in Finland came out stronger than other
banks during the crisis. The managing director claims that ‘the POP Bank group has a very
light central organization and operates in a modern and cost-‐effective way,’ he says. ‘We
see that it is not wise to make everything by ourselves. We buy services from the best
vendors or partners. We focus on customer relationships and have outsourced the
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production of many products like mutual funds, securities, life insurance and cards.’

1.4.6 Cooperatives in Europe – Facts, figures and general attitudes

In 2005, there were 256742 cooperative enterprises in Europe with 163 million members and provided
5,4 million jobs. In comparison, in 2009 the number of enterprises had reduced to 157385 with 123
million members – however, they provided 5,3 million jobs. It may thus be assumed that even though
the number of cooperatives has decreased as well as number of members, the amount of paid jobs has
not decreased as significantly during that four-‐year period.16

General attitudes towards cooperatives seem to be twofold in a nutshell: People working in the
cooperative sector, especially in strong cooperative areas are generally positive towards the cooperative
form. However, people who have limited knowledge of the cooperative form seem to be more sceptical
towards cooperatives in general. There are examples of public authorities, which acknowledge
cooperatives but do not necessarily support cooperative business start-‐ups. Following the economic in
2008, there seems to be a growing interest in the cooperative form among young people, politicians and

14
See further information on cooperative banks here.
15
16
See Cooperatives Europe Activity Review, 2006-‐2010

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decision makers. However, Poland seems to be an exception whereas attitudes seem to be unfavourable
in general, due to the connection of the Polish cooperative movement to the communist regime (based
on findings of GAP analysis in the Conventus-‐project).

Main obstacles for establishing cooperatives are twofold: Firstly a lack of financing and secondly a
limited knowledge of cooperatives as a business format. The economic downturn in Europe following
the 2008 recession has prevented people and companies from investments in new businesses. This
affects all sectors and all business formats. However the co-‐operative business format should attract risk
aversive investors. Therefore the two obstacles mentioned above could be overcome by increased
awareness and business education in the regions. In order to put the general attitudes into perspectives,
the state-‐of-‐the-‐art of five European countries will be described in next section (based on findings of
GAP analysis in the Conventus-‐project).

1.4.7 The cooperative movement in Finland

The Finnish Cooperative movement emerged in 1900-‐1910. Retail cooperatives are the
biggest branch and cooperatives play an important role in rural area’s sustainable
development. Big cooperatives are important employers and service suppliers in rural
regions and employee-‐owned cooperatives are growing in numbers and creating jobs. This development
has been especially beneficial for young graduate professional in areas where sustainable cooperative
development is practiced.

Attitudes towards cooperatives in Finland vary between different regions. Attitudes are positive in areas
that have cooperative development organizations and cooperatives are now accepted as ‘real’ business
forms. Attitudes are therefore twofold – general neutral reaction towards for example SOK, which is the
biggest coop market and there seems to be little knowledge on the service cooperatives, which have a
challenging role. At the moment, there is a grave discussion in Finland on using the cooperative form in
the public health service.

Young people in Finland generally have positive attitudes towards entrepreneurship but the threshold to
start own business seems to be reasonably high. Joint entrepreneurship, establishing a business
together with friends/colleagues attracts younger generation and there has been growing trend to find
cooperative model as a business solution in variety of areas, e.g. in community farms (farm/field
cooperatives owned by usually urban people to produce fresh food) and knowledge intensive worker
cooperatives.

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However, there seem to be positive influences whereas the public is getting tired of marketing forces
and a growing emphasis on sustainability of the communities. However, there is still a tendency of
considering the cooperatives merely as ‘playgrounds’ instead of real enterprises, whereas main
operations of cooperatives are based on the community and are non-‐profit.

In general, negative attitudes are linked to ignorance and bad experiences from cooperatives and could
possibly be altered with more information and more visibility. It is also considered important to increase
number of members of existing cooperatives, get more help from the government and make the
cooperative laws more effective.

The case of Finland is ‘Pienkoti Akseliina’ located in the town of Kemi in
South Lapland. The cooperative is working in Social and Health care
branch by producing the intensive service of the habitation for elderly
people suffering from dementia. The cooperative’s mission is to provide
accommodation, which combines safety and home-‐like informality. The
service includes medicine control and service of home care nurses and
the staff takes care of shopping and other daily needs for the elderly. The cooperative was
established in 1999 and it has 7 owners, 6 of them working with social and health care
issues and most of them have basic, local or public health degrees, including one in social
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service. The annual revenue is 400 000 €.

1.4.7.1 What can we learn from the cooperative movement in Finland?

In Finland, the cooperative form has been used to some extent in social sector, mainly as worker
cooperatives owned by social sector professionals. Cooperatives play an important role in the
development of rural regions, whereas they support sustainable development and serve as a platform
for young university graduates in order to utilize their expertise in their home area. Cooperatives could
cover much more of social service needs and services now offered by municipalities or private
companies. There is growing interest towards cooperative model in both the social and healthcare
sector, and some research is done on cooperative potential in elderly care sector which covers also idea
of user cooperatives (service cooperative owned by elderly people or their family).

17
See further here.

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1.4.8 The Cooperative movement in Iceland

The cooperative movement in Iceland emerged in the latter part of the 19th century. At
the time, Iceland was first and foremost a poor society of farmers who lived in poor
conditions with little space for agriculture and little access for trading goods. Trade in
Iceland had been monopolised by the Danish for over 200 years at the time, where Icelanders had to
pay high prices for imported goods but received low prices for their exported goods. The Danish
merchants had all the power regarding prices and while many Icelandic households were high in debts
for merely buying bare necessities, the Danish merchants collected enormous amount of wealth.
Poverty, along with natural disasters, such as volcanic eruptions and cold seasons had resulted in a
large-‐scale immigration (14000 Icelanders) to USA and Canada in the period 1870 – 1914.

Therefore, the roots of the cooperative movement in Iceland emerged from a need. The first
cooperatives were farmers’ cooperatives, established in 1882. Major part of Icelandic cooperatives were
mixed cooperatives around the country, running groceries, dairy productions, butcheries, fisheries,
garage repairs, carpentries and other operational units, formed the basis in the 20th century Icelandic
economy. However, the Cooperative Movement (SÍS) collapsed in the latter part of 1980s, causing
cooperatives around the country to go bankrupt. This collapse resulted in rather negative attitudes
towards cooperatives and the cooperative form, which was considered to be ‘monopoly-‐oriented’ and
also due to the political association of the cooperatives with the Progressive Party. Cooperative
managers were accused of corruption and the political debate was negative as well. After the collapse of
the cooperative movement, there was an increased emphasis on privatisation and free-‐market
capitalism.

However, following the economic collapse in 2008, there is a growing interest in sustainability and social
responsibility of companies instead of a ‘free and independent, pure capitalism’, and thus there might
be a basis for the cooperative form in Iceland. Still there is little public debate on the cooperative form
and the general public is yet not aware of the real cooperative ideology and worldwide use of the
cooperative form. The cooperative laws must be reviewed and more public discussion is needed,
without the political connection in the past.

Main obstacles for cooperatives in Iceland are firstly a general lack of economic investments and low
stimulus for investments. Secondly, the attitude seems to be still quite negative, especially among those
who can remember the collapse of the cooperative movement in the 1980s. Thirdly, the existing
cooperatives in Iceland (like Kaupfélag Skagfirðinga) are still linked to controvertible businessmen and a
certain political movement (the Progressive Party) and there is a lack of renewal in membership in
current cooperatives. The Icelandic cooperative laws can be found here.

19

NPA Centre is a non-‐profit, social cooperative operating
in the social and health sector, owned and managed by
people with disabilities in Iceland. This cooperative was
founded in 2010 with 33 founding members and is one of the youngest cooperatives in
Iceland. The main purpose of the cooperative is to provide personal services and
assistance to people with disabilities by using direct municipal funding (which is provided
by law) in order to recruit their own staff and thus influence how they arrange the
assistance they need in everyday life. The second purpose is to provide short seminars and
courses for disabled people and their family members. Assistants (hired by members
themselves) work according to job description written by members themselves, according
to their needs and wishes. The aim is to enable disabled people to live the life they want
to live, to have same opportunities to live their life like non-‐disabled people and manage
how the assistance is organized and tailor-‐made according to everyone´s personal needs
and lifestyle. The ideology of the NPA Centre is based on the philosophy of independent
living, which has its roots to the disability rights movement in the 70s and is today a
worldwide movement of people with disabilities ‘working for self-‐determination, self-‐
respect and equal opportunities. In order to become a member of NPA Centre,
prospective members need to fulfil these terms (according to the regulations, paragraph
4): “Individuals, who have disabilities have access to accepted municipal payments can
become members of NPA and use the service of the cooperative. Those individuals, who
have disabilities and have not yet access to municipal payments, have the right to join the
cooperative. Members must pay 10 000 ISK when joining the cooperative and become a
18
member.

1.4.8.1 What can we learn from the cooperative movement in Iceland?

As evident in the summary above, the cooperative movement in Iceland collapsed in 1990s and general
attitudes in Iceland seem to be linked to the history, with special emphasis on the collapse of the
movement, as previously mentioned. The cooperative movement in Iceland was also strongly associated
with the Progressive Party – thus the cooperative debate was always been political. Thus the biggest
challenge in Iceland will be to establish a new cooperative thinking, free of the political associations
from the past.

18
See further here.

20

1.4.9 The Cooperative movement in Trentino, Italy

The province of Trentino is a mountain area located in the North of Italy, only 2% of
Italy and 60% of the area is above 100 m altitude. This area used to be one of the
poorest areas in Italy in the 19th century resulting in emigration of 24000 to America
from 1870 to 1890. The first cooperatives were established in order to support the area and reduce
poverty – in 1890s the first consumer cooperative and cooperative bank in Trentino were established.

The cooperatives play an important role in Trentino’s socio-‐economic framework and create both
wealth and employment for the society with 2,6 billion Euros in income and provide work for 17.000
people. At the same time, unemployment rate is very low in the province of Trentino; 4,5% compared to
11,5% in Italy. The cooperatives support the wellbeing of members and the community, whereas 50% of
inhabitants (500 000) are members. The cooperative system in Trentino is a both social and cultural
movement in close relationship with the community and creates a large proportion of the local
economy; 90% of local agriculture, 55% of the credit sector and 38% in the consumer sector. The
cooperative system aims at resolving and improving welfare of its members and the community.

Attitudes towards cooperatives are quite positive among the public in Trentino, due to its historical
context and in comparison with other forms of enterprises. There is a strong belief in the origins and
traditions as a family heritage and this region is generally open for this kind of business model. Local
authorities show interest in cooperatives, which is represented at a local level with a specific
department for the development of cooperatives. However, public bodies still see cooperative
enterprises only as SMEs, without emphasising their social role and characteristics. Local academic
interest is also not as great as it could be considering the impact of cooperatives in the economy and
territorial development.

There are no particular obstacles for establishing a cooperative in the province of Trentino – on the
contrary, political and socio economic frameworks favour and support their development.

21

Risto3 is the biggest worker cooperative in Trentino with its
over 30 years of experience, 380 members and 1.042
employees and a widespread presence throughout the local
territory providing approximately 6 million meals a year from its 250 kitchens (catering
and especially canteens in schools and for workers), with an annual revenue of about
45 millions euros.
Since its beginnings in 1979 (started with 5 women who had lost their jobs) it has
become leader in the catering industry, thanks also to the professionalism of its
workers and an entrepreneurial strategy that has always privileged high quality service
and products. In fact, they are very rigorous in choosing local produce and suppliers,
respecting the environment, actively recycling, and undergoing regular health and
hygiene controls to assure maximum food safety.
Social cohesion and employment are important features of this coop as Risto3 is
one of the few enterprises that responds especially to women’s needs for flexible
working hours, and is an example of integration of different cultures employing
women from 40 different countries. They are also very active in charities in less
19
developed countries.

1.4.9.1 What can we learn from the cooperative movement in Trentino?

Trentino is an example of a region with a strong cooperative culture, where cooperatives play an
important social and economic role in the region. It is in fact one of the European regions with the
highest density of cooperative enterprises in the greatest variety of economic sectors, some of which
have been active since the end of the 19th century. Over the years, the cooperative experience in
Trentino has further expanded from the traditional areas of credit, agriculture and consumers, to now
encompass social services, environmental management, energy production, culture and education.

The cooperative system in Trentino is therefore a worthy case study for those studying social economics
as it reflects many of the transformations in cooperation in Italy and in Europe. The experience of
Trentino however does not claim to be exemplary compared to other models, although it is unique, and
can be an inspiration when seeking new strategies to face modern day challenges of our societies.

The main characteristics of the cooperative model in Trentino are:

19
See further here: http://www.risto3.it

22

1) Small cooperatives -‐ cooperative enterprises are mostly small and medium size in Trentino, due
to the geographic morphology of the territory characterized by mountainous areas and to the
administrative subdivision into many valleys and small communities (only 2% of the 217
municipalities have 5,000 – 15,000 inhabitants, 30% between 500 – 1,000 and 22% less than 500
inhabitants). Smaller cooperatives have the advantage of being able to encourage a stronger
sense of belonging with the territory and are closer to their members, allowing specific
interventions and providing a better solution for community needs.

2) Consortia -‐ are second level organizations whose members are cooperatives. This is one of the
successful key elements of the cooperative model in Trentino, where consortia have a
fundamental role in assisting and strengthening the small cooperative enterprises in facing the
global market as the Consortia coordinate and integrate the activities of each sector, providing
technical assistance, marketing services, consultancy, training and research for the cooperatives
associated.

3) Central position of the Federation of Cooperation, which is horizontal and not a third level
organization, as both cooperatives and consortia, can adhere and benefit from the services
provided. The Federation legally acts as political representative of the system at local, national
and international levels, carrying out accounting and bookkeeping services, supervisory boards
and auditing services. The Federation is the only representative organisation of the cooperative
system (a single system that groups together all sectors: consumer, credit, agriculture, labour,
social, service and housing) as a result of the joining in 2000 of two different representative
organisations: Confcooperative (of Catholic orientation or white cooperation) and Legacoop
(social orientation or red cooperation).

1.4.10 The cooperative movement in Poland

In Poland, rural cooperatives were established in the 19th century – the first cooperative
was established in 1816 for peasants and in the 1860s agricultural and trade
cooperatives, dairy cooperatives and savings and loans cooperatives were established,
but were oppressed by the authorities. In Poland, cooperatives have usually been associated with
communism. After 1948, farmers were put under political, administrative and economic pressure to join
cooperatives. However, in 1956, farmers began to abandon the cooperatives. From 1960 to the end of
the communist era, the state intervened in the decision making in the cooperatives’ productions.
However, after the end of the communism, the functioning of the cooperatives was abolished, their
assets sold below value and the market was opened for foreign goods (Ilona Banaszak).

23

The attitude is unfavourable mostly due to the recent historic heritage and association with the
communist era. Generally the cooperative business model is not perceived as an alternative business
model and has been disregarded by the political elites of the country for the past 20 years. The result of
which has been the diminishing number of cooperative societies – it has diminished by half since 1989.
The second reason for unfavourable growth conditions is that the law give more privileges to
commercial companies than cooperative societies, which pushes co-‐operators to seek the way out of
the cooperative sector. Additionally, the government has been negative towards cooperatives, there is
a lack of interest of Polish citizens in setting up new cooperatives and lack of renewal in membership.

In Poland, generally, the attitude is not favourable, both among the representatives of political powers
and mass media, which translates into the same negative opinion of the majority of Polish people (apart
from the persons connected with the cooperative sector). The reasons may be a certain lack of
knowledge on the cooperative business model, its historical role in Poland and the association with the
communist era. There is certain fascination with the liberal ideas and disapproval of all communal forms
in favour of individualism.

However, there has been some positive change of the attitude. The cooperative ideas are becoming
more and more attractive among certain youth-‐groups, the attitude of some politicians has been
gradually improving. The President of Poland has expressed some positive opinion on the cooperative
sector and has organized a cooperative forum.

On the other hand, as far as legal context is concerned, cooperatives in Poland are treated worse than
commercial companies/private firms. What is missing is stable cooperative legislation, all legal initiatives
tend to abolish or limit the scope of activity of the cooperative sector. It has a great impact on –
alongside the already mentioned factors – the general attitude towards cooperatives and it certainly
does not encourage people to set up new cooperatives.

The Polish cooperative sector has a substantial social influence. Polish cooperative sector translates into
9000 cooperative societies, 8 million members and around 300.000 employees. Members of the
cooperative societies altogether with their families form almost half of the Polish population.
Cooperative business model is associated with stability and social safety due to cooperative principles,
which determine democracy, solidarity, self-‐help, co-‐operation etc. – all the features that the corporate
world is deprived of.

1.4.10.1 What can we learn from the cooperative movement in Poland?

24

In the Polish context, it is first and foremost important to educate politicians, journalists and the youth
to make them understand that the cooperative sector is not the relict of the old times; that cooperatives
proved to be immune to the global crisis, that cooperatives are important for worldwide economies. The
second thing would be to provide a good, stable cooperative legislation. Those sectors, which have
succeeded lately, were provided with reasonable legal solutions. The third thing would be to support all
initiatives, especially of the young people setting up new forms of cooperatives (social cooperatives for
example) and forms resembling cooperatives, which may contribute to the attitude change.

Education should exemplify the advantages of choosing the cooperative business model by showing the
best practices not only in other countries, but also in Poland. It would be worth underlining what
problems – similar to those in Poland – have been solved with the help of cooperative sector, but also
what kind of obstacles occurred while setting up and daily activities of cooperatives and how these
problems were overcome. Cooperative values and principles should also be stressed as factors, which
strongly differentiates the cooperative sector from the commercial one. It is also important to be
reminded of the cooperative tradition and of all the great persons who have been connected with the
cooperative sector throughout the history. It should be emphasized that being a co-‐operator is the
reason to be proud, but not to be ashamed.

1.4.11 The cooperative movement in Sweden

The Swedish cooperate movement began to emerge in the 1890s, following the growth
of Sweden´s industrial revolution. The working class grew rapidly in urban areas and in
the era between 1896 and 1899, 200 new consumer cooperatives were established.

There is a general lack of knowledge of this specific form of enterprise in Sweden. Cooperatives are not
considered an important part of the economy and are considered rare, even sometimes regarded as an
old and out-‐of-‐date way of running a business; often confused with voluntary associations. However,
attitudes among young people tend to be more positive and there is a growing interest among
politicians and decision makers towards cooperative entrepreneurship in social enterprises. What seems
to be the main problem is the lack of visibility, which is a result of lack of resources for marketing
purposes. Therefore, more visibility is needed in order to make the public aware of the cooperative
form.

It is necessary to increase the number of social enterprises and include them as a part of community
development. New cooperatives in the field of renewable energy (wind, power, biogas) have emerged
and also in the fields of health care, social care and household services. Small-‐scale collaboration in local
foods are a growing area within the cooperative movement in rural areas, like Skaraborg.

25

Main obstacles that cooperatives in Sweden are facing are lack of financing and a general lack of
knowledge about the cooperative movement and the cooperative as a form of enterprise.

‘Kooperativet Lärkan’ in Sweden is an example of a worker
cooperative. Lärkan has 36 members / owners and was
established in 2005. This cooperative has various types of
activities, for example a second hand store, gardening service, bike-‐repair garage and a
café. The vision of the cooperative is to help as many people as possible to get a fulfilled
life and empowerment. Everybody is of equal value and everyone deserves and also has
20
the right to have a good life.

1.4.11.1 What can we learn from the cooperative movement in Sweden?

The cooperative movement in Sweden has especially focused on social, health and community
cooperatives, as well as housing cooperatives. The role of many social cooperatives is to fight poverty,
help socially excluded people to find their own platforms in their lives (such as people with mental
health problems and also with disabilities) and encourage people suffering from long-‐term
unemployment to establish their own businesses. This form of enterprise also plays an important role in
regional development, especially in regions like Skaraborg.

The cooperative movement in Sweden has a long tradition of pursuing activities in housing, insurance,
agriculture and consumer cooperatives. These organizations have become very strong with a large
number of members.

Today there is a new way of working within the co-‐operative movement; we call it the “new
cooperation”. Today we can see new cooperative enterprises in the sectors of: culture, renewable
energy, infrastructure, schools /day care centres, health/social care and social cooperatives. There is a
great interest concerning the social enterprises from both society and the public sector. These
companies allow individuals who do not fit into the labour market or for those who, for various reasons,
need a platform to be able to go on to studies or work.

The Swedish form Cooperative economic association is tailor-‐made for cooperation. Cooperative
companies can be run under a variety of different corporate structures. A cooperative economic

20
See further here.

26

association is often ideal, because the relevant legislation is designed to handle a democratic approach
to ownership. All joint owners/members of the association have a vote and they decide jointly on how
to allocate a surplus. A cooperative economic association (in common with a limited company) is a legal
entity. It must comprise at least three people or companies and the members must decide jointly on the
size of the start-‐up capital.

The cooperative movement has taken place in society by creating sustainable businesses that create
growth, locally, regionally and nationally.
.
1.5 Assignments and exercises

1.5.1 Surveys and questionnaires

• A story of Cooperative Principles (survey from Skills): Log into your online teaching system and
finish the survey

1.5.2 Discussions

• What is a coop in your opinion?
• What is your first memory of a cooperative?
• In your opinion, which one of the cooperative principles is the most important? Least
important? Why?
• Can you recognise the implementation of the coop principles in a coop you know?
• Describe the ideal cooperative – what kind of cooperative would you like to establish and why?

1.5.3 Tools / Writing assignments

• Write 1000 words about your experience with cooperatives, as a cooperative member etc.

27

2 Module 2: Being a cooperative member


This module aims at making cooperative members aware of what it means to be a member in a
cooperative and to enable them to become more active as members. Before undergoing this module, it
is essential for students to finish module 1 (history and ideology of the cooperative movement).

The focus is directed towards the role, duties and rights of the cooperative member within the
cooperative laws and legislations (national level), highlight the benefits of being a cooperative member
and make members aware of the social responsibility of the membership, joint ownership and
democratic control.

Special focus will be on success stories (best practice – case studies) of cooperatives characterized by
the active participation of its members.


After this module, student should be aware of their …
• Status as cooperative members
• Benefits and responsibilities as members
• Role, duties and rights within cooperative laws (as stated in the civil code)

After this module, students should have the ability to …
• Evaluate possible membership, consider personal situation and aims
• Identify issues concerning memberships in statutes and coop legislation
• Work and make decisions and becoming more active as members
• Put cooperative values and principles into action, while being active members
• Identify the ways in which different coop organisations involve their members
• Identify strategies to improve members participation
• Identify the role of members in the governance process of your cooperative

28

2.3 Target groups

This module is especially aimed at cooperative members and cooperative workers. This can also be
targeted at cooperative managers and board members, as well as co-‐operators to-‐be.

• Cooperative members
• Cooperative workers (if they are members of cooperatives)
• Cooperative managers
• Cooperative board members


According to the Green Paper on Corporate Social Responsibility21 companies are increasingly promoting
their ‘corporate social responsibility strategies as a response to a variety of social, environmental and
economic pressures’.22 In this case, companies have in many cases put their focus on social
development, environmental issues and protection and the respect on fundamental rights, supporting
sustainability and regional development. This ideology on corporate social responsibility is one of the
guiding lights of the cooperative movement in general – to direct the focus on democratic issues and
taking responsibility for the society and the environment.

2.4.1 Being a cooperative member – what does it mean?

General and open membership is the core of what makes cooperatives
different from other businesses. But what is a cooperative membership all
about?

When you are a member of a cooperative, you are a member of a
community of people who share the same goals and have a say in how the
cooperative is run.

21
Commission of the European Communities, 2001
22
Commission of the European Communities, 2001, p. 3

29

As an example, The Cooperative Group in UK23 build their membership on four main pillars:

1. Sharing the profits – when a member buys something from one of the cooperative businesses,
the member earns points, which are added up twice a year and the member receives his/her
share of the profits as cash, plus all kinds of special offers.

2. Supporting your community – included in the membership is an involvement in the Cooperative
Membership Community Fund, which supports all kinds of projects within local communities
and members can donate a share of their profits if they so wish.

3. Changing the world – The Cooperative Group runs a global campaign, which aims at tackling
important issues like climate change and human rights. As an example, members can go to
movie premieres which are organised to highlight the issue being supported, or members can
sign up for regular support

4. Having your say – members have a say in how the business is run. The Cooperative Group has
member representatives across all regions that speak on behalf of local people. Any member
can become a representative.

In a nutshell, being a cooperative member means that you have a say in how the company is run.
Usually members elect their representatives who work closely with the management of the cooperative,
making sure that views of members are heard and that cooperatives stick to the cooperative
principles.24

2.4.2 What do the 7 principles of cooperatives say about cooperative membership?

In order to highlight the cooperative principles from module 1, they highlight and emphasize the rights
and obligations of cooperative members.

• Firstly, cooperatives are open for all who want to use the service of the cooperative (1 –
Voluntary and open membership).

23
See further here.
24
See as an example membership in the Cooperative Group UK.

30

• Secondly, the keyword of cooperatives is democracy – the cooperatives are independent run by
their members (4 – Autonomy and independence) who set the policies and make all major
decisions regarding the organisation of the cooperative. The key is one member = one vote,
regardless of how many shares one member has (2 – Democratic member control).

• Thirdly, the cooperative capital is common and contribution of members is equitable.
Furthermore, compensations of members are limited and the purpose of the use of the capital is
to develop the cooperative and support activities approved by members, so the members will
benefit in accordance with their proportion of transactions with the cooperative (3 – Member
economic participation)

• Fourthly, members of cooperatives can enjoy education and training provided by cooperatives
in order to contribute to the development of the cooperative and inform the public on the
nature and benefits of the cooperative (5 – Education and training).

• Fifthly, by becoming a member, an individual is therefore a part of a larger community of
cooperatives and participates in activities that support sustainable development of their
communities (6 – Co-‐operation among cooperatives and 7 – Concern for community).

2.4.3 Being a cooperative member in Iceland

Iceland

In 1991, the current laws on cooperatives (1991, no. 22, 27th March) were agreed in the Icelandic
Parliament.

According to the 1st paragraph, the purpose of the law is to highlight the aim of the cooperatives to
improve lives of members with their active business participation in the cooperative. There are no limits
on how many members can join a cooperative and the amount of start-‐up funding not centrally decided
by law. Members are also not financially responsible for the cooperative.

In the 2nd paragraph, the aims of cooperatives are described in three different, but interrelated pillars:
• Firstly to provide members and other customers with goods, products and services for their own
use

31

• Secondly, to process and sell products provided by members in their own private businesses
(like farmers and other small producers)
• Thirdly to provide services that aim at supporting members and for the benefit of members

Membership in a cooperative in Iceland is open to all individuals who are willing to participate directly in
the cooperative´s activities or businesses (15th paragraph). If an individual wants to become a member,
he/she must turn to the Cooperative board and send a request for membership (16th paragraph).

However, according to 17th paragraph, membership and membership rights are not inheritable, cannot
be sold to another individual by the member and membership share cannot be collected if the member
is in debt.

General member meetings are a venue for decision-‐making – further details on the rights of members
and laws on Icelandic cooperatives can be found here.

2.4.3.1 Examples of cooperative membership in Iceland

As an example of a membership in an Icelandic cooperative, membership in the NPA-‐centre (an Icelandic
social cooperative for disabled individuals) is based on the ideology of independent living for people
with disabilities.

The core of the ideology is that every person can make his/her own decision regarding his/her life,
choose their own support and assistance and shape their own lifestyle. Every disabled person has the
right of controlling his/her own life and participates in the society on his/her own terms. Thus the power
of deciding what kind of service they receive goes from the public authorities to the individuals
themselves.25

25
See further www.npa.is

32

2.4.4 Becoming an active cooperative member

Being a board member in a cooperative means being able to make
decisions advantageous to members of cooperatives. However, often
there is no time taken to think about who the members actually are,
what interests they may have, how they can be part of the coop, and
what their rights and duties may be. It is therefore important to
understand the different ways of concretizing the coop’s relationships
with their members.

One of the concerns of board members is to encourage cooperative
members to become more active in their membership.

As an example, The Cooperative Group in UK provides members with various ways or methods of
becoming more active as members. Many consumer coops within the Group have staff whose role is to
support and communicate with the local community, members and representatives. Members can thus
firstly contact their local membership team.

2.4.4.1 Case: Active membership in The Cooperative Group UK

As an example, the cooperative group in UK has various ways of
including members in the activities of the cooperatives and how to
make members more active. Thus they work with membership and
cooperation in the community on regular basis.

For example, members are often involved in organising community
events – the cooperative encourages members to work together on
such events and check if the cooperative can support the event or
other activities by offering vouchers, funding or advice.

The co-‐operators (or cooperative management) are thus encouraged to establish a working relationship
with local membership teams, who for example are in a working relationship with local membership
teams.

33

Cooperatives often establish community funds or other funds on supporting good cause in the
community where members can donate a part of the profit that the cooperative gives back to its
members.26

2.5 Assignments and exercises

2.5.1 Surveys and questionnaires

• Being a cooperative member – Rights and duties of a member of a cooperative: Go to your
online teaching system and complete the survey

2.5.2 Discussions

• Are you a member of a cooperative? Which cooperative/s and why?
• What is the benefit of joining a coop?
• Describe your contribution to your cooperative/s
• How would you increase members’ activities in your cooperative?
• How do members participate? (customers / members …)
• Why do coops need members?
• Why do people join coops?
• Compare membership in coops to being a member in other organizations – what is the
difference?
• What motivates members to take part in activities?
• Describe the current position in relation to membership in their coop and movement

2.5.3 Tools / Writing assignments

• Write 1000 words about your rights and duties as a cooperative member

26
See further http://www.co-‐operative.coop/fairtradetowns/The-‐Co-‐operative-‐difference/Co-‐operative-‐
membership/

34

3 Module 3: Establishing a new cooperative business


This module aims at people who are interesting in establishing their own business (who may or may not
have large amount of capital) and are open for using the cooperative form. The cooperative laws and
regulations are introduced (in every partner country, for different sectors) and students will also learn
about the difference between a private company and a cooperative.

However, the main emphasis of this module will be to introduce and teach co-‐operators to-‐be to
develop a cooperative business plan; e.g. how to get members, how to develop the structure and
strategy of their cooperatives, doing a feasibility study, defining target groups, making a marketing
analysis and a financial plan. By using success stories, the main aim is to raise awareness among future
co-‐operators on the possibilities

It is recommended for students that are enrolled in this module that they undergo module 1 prior to this
module.


After this module, student should …
• Be aware of the fundamental factors and issues in making a cooperative business plan
• Be aware of the cooperative principles and values in the process of developing a cooperative
business plan
• Be aware of the differences between a cooperative and other business models; i.e. their
potential and flexibility of the cooperative enterprise model

After this module, students should have the ability to …
• Create, evaluate and further develop a business idea
• Make a marketing / need analysis in order to check the feasibility of the business idea
• Create a business plan by using business plan templates

35

• Establish a cooperative business start-‐up

3.3 Target groups

This module is primarily targeted at co-‐operators to-‐be and also prospective cooperative members and
workers (who can be used as focus groups during the development of the cooperative business plan).

• Prospective cooperative members and workers (focus group?)

36


3.4.1 Starting a cooperative – what do you need to keep in mind?

A cooperative is a real business – there is a general misunderstanding that cooperatives are more like
charities or public, social bodies. No, a cooperative is a form of real business.

Before deciding on establishing a cooperative, here are few questions that individuals, who are
considering establishing a cooperative, must have in mind:

• What is the cooperative going to do?
• Is there a need for the cooperative? Is there a gap
/ place in the market for the cooperative?
• Is there a demand for the product(s) / service(s)
that the cooperative provides?
• Is it possible for you to supply the need, product
or service on a competitive basis?
• Who will own and control the cooperative?
• Who will be involved in the cooperative and how?
• Who are likely to be cooperative members (e.g. a target group) and which mutual benefits are
present (both for the cooperative and the cooperative members)?
• What is their motivation to join a cooperative? Do they have different needs and if so, how can
the cooperative fulfil different set of needs?
• How will you finance the cooperative, especially?27

Considering these questions will help you whether the business idea is a realistic option, whether it
needs more consideration and refinement or whether the idea is more linked to suit better to be a
subject for a voluntary or community group work organization, instead of a cooperative business.

27
See further http://www.uk.coop/start-‐co-‐op and http://www.uk.coop/form/quiz-‐co-‐operative-‐right-‐me

37

3.4.2 Setting up a cooperative in 7 steps

In order to ‘frame’ the working process of establishing a cooperative, it is essential to have the following
7 steps in mind (based on material from Coompanion, Skaraborg):28

3.4.2.1 1 -‐ Idea

To begin with, everything starts with an idea. The idea must be tested and evaluated and there are few
things that need to be considered in the process of forming the idea:

• You need to know the needs of the market – is there a space for your idea?
• You need to keep up with the evolution of the market where new products / services are in
demand
• You need to know what the ‘problem’ is and how to solve it (which is the core of innovation)
• You need to be able to demonstrate that customers are willing to pay for the products / service
that you are offering
• You need to be able to identify and analyse future threats and opportunities, which is a key to
create a successful business

3.4.2.2 2 -‐ Vision

In order to establish a business, you need to have a vision, something that drives you to the idea. If you
are in a group of like-‐minded people, it is good to have a shared vision – why?

• The group needs to be able to pursue the same objectives
• Different set of goals can be difficult to fulfil
• If you have a clear picture on the cooperative’s objectives, then it is more likely that everyone is
going in the same direction and it is more likely that you will achieve success under these
conditions

The group of individuals who have the goal of establishing a cooperative must make it clear from the
very start of the process why they are fit to work together. There are two main reasons for this:

28
Based on material from Coompanion Skaraborg, Sweden

38

• Firstly, to avoid unnecessary work and prevent unnecessary conflict
• Secondly, if everyone has a clear picture of what to do in the cooperative, then it is more likely
that the group will go together in the same direction, which is more successful in the long run.

3.4.2.3 3 -‐ Mission

There is no idea and vision without a mission and you must ask yourself why it is so important to
formulate a clear and distinct business idea? The fact is that the business concept talks about the
benefits for the clients and offers guidance and control when it comes to define target groups, prices,
types of products and more.

Furthermore, can a business change once you, or your group have decided on what you will focus on? It
must be taken into account that every business is subject to change as it is developed in order to adapt
and to meet external threats and opportunities. Therefore, a key to success in business is to identify
future threats and opportunities and change the business idea to fit these criteria may be critical for the
sustainability of the business itself.

Thus, a well-‐formulated business idea should answer the following questions:
• Which needs should the company meet?
• Which service / product(s) will satisfy the customer’s needs?
• Who is the customer? This is a critical question whereas a product or a service cannot satisfy
everyone – thus important to identify target group(s)
• Why should the customer choose to buy the product or service from you and not from any other
company?

3.4.2.4 4 -‐ The Business Plan

Having a vision, a mission and an idea, then it is time to go to the drawing board and make a business
plan. But why is a business plan so important?

Firstly, a business plan is a helpful tool to make the idea more concrete and to get a clear picture on how
the company will be organized.

Secondly, a business plan is a strategy tool where you will identify the company’s strengths, weaknesses,
threats and opportunities (SWOT-‐analysis).

39

Thirdly, a part of making a business plan is to plan how to fund the company´s start-‐up and also
demonstrate how the budget will be controlled and whether the income will support the sustainability
of the company. These information are important both for banks and investors who are willing to
provide funding into the business.

Fourthly, the business plan will describe the function of the business idea; it provides an overview of the
company, whether it will be profitable, which goals are set and how to measure them.

Fifth, the business plan will demonstrate the amount of start-‐up capital and in general, the business plan
provides customers, employees, insurers, accountants and other stakeholders to have an overview of
the objectives and goals of the business.

What is also a key factor when making a business plan is how to implement the cooperative ideology
and principles into the business plan, the key strategy, structure and operation of the future
cooperative. It must be taken into account how cooperation could and should be a part of the business
plan. Is it visible or hidden or does it give competitive advantage compared to other businesses.? In
summation: Is the business idea “cooperative,’ a result of collaboration of same/different branch
professionals? Does membership attract customers, have positive effects on the mutual strength of
members and does the cooperation have positive effect on issues like risk management? These are all
factors that need to be taken into account through the whole process of writing a cooperative business
plan.
3.4.2.5 5 -‐ Financial planning

As in any other business, financial planning is usually considered one of the most complicated parts of
the business plan. It is important to estimate a start-‐up budget, realistic cash flow estimation and
estimated profit in order to estimate the company´s economic sustainability.

But can the estimate be changed along the way?

Well, estimate is just an estimate. A lot can happen on the road to success, both events that will
negatively affect the company´s structure, income, management etc., and (of course) positive events,
such as how you react when demand is far greater the supply of your product / service. When financial
statement are made, it must be taken into account what kind of results they have achieved. The budget
should therefore be in line with the outcome on quarterly records (or even more frequent records)

40

A start-‐up budget is an estimate of the necessary costs to start up a company (investments, machinery,
office furnitures, register costs etc.). The estimated amount of start-‐up budget indicates whether there
is a sufficient amount of capital available (from investors, for example) or whether you need to take a
bank loan for the start-‐up.

Cash budget refers to monthly payments and incomes and indicates whether there is enough income to
pay for expenses and necessary bills. It also evaluates the viability of the company and therefore it is
important to make an estimate on potential income and expenses for at least a year ahead (some
companies make estimates 3 years ahead). Thus revenues will cover the costs and bridge the time
needed to produce a surplus, which can partly be used for development of the company and its
employees.

3.4.2.6 6 – Planning of activities

A good and thorough project planning and project management is essential when establishing a new
business. Good planning will help you to go through what needs to be done until you start your
business:

• Make a schedule – put dates and deadlines on when various activities need to be completed
• Distribute tasks among group members – make sure that group members share the workload
• Carry out a continuous monitoring on the process of the schedule
• Review agreements and contracts that need to be established, such as general supplier
agreements
• Make sure that you are aware of the laws that cover your particular form of company (such as
Competition Act, Sale of Goods Act, Environmental Act etc.)
• Make sure that partnership agreements are made between group members and/or other
investors / stakeholders
• Be aware of employer´s role if you have employees (especially if they are members too)
• Make sure you have all the insurance you need and what kind of insurance is needed (safety,
property, liability, business interruption and legal expenses insurance)

Which issues are important when it comes to planning of the organization of the company?

• How should the company be managed?
• Which role does every individual have within the company?

41

• What is the role of the board and how often should it meet?
• Which principles (in terms of decision process) should be the guiding light of this particular
company?
• How should the daily work within the company be allocated and how should daily routines be
organised?
• In what way should responsibilities be shared?

In a nutshell, it is vital to determine major priorities and make sure that everyone is involved in decision-‐
making and who has the responsibilities to act in accordance to these decisions.

3.4.2.7 7 -‐ Registration

Like any other company, you need to register your cooperative with the public authorities. This needs to
be prepared and here are major factors that you need to consider in this process:

• Firstly, you need to be aware of the laws and regulations, especially regarding cooperatives.
Then you have to draw bylaws for your cooperative.
• Secondly, you need to hold a formal meeting where the statutes are adapted and agreed upon;
where decisions are made to form the association, where board of at least three individuals are
appointed and also an appointment of an auditor (organisational meetings).
• Thirdly, the elected board must hold its first meeting, which appoints the authorized signatories.
Note that therefore the two meetings with two different protocols and can both be held one
after the other (this may differ between countries). They can of course be held directly after the
other.
• Fourthly, you need to pay the registration fee for registration and company registration

Every company needs to maintain accounting, which is the system used to keep the company's finances
under control.
• All operating companies are required to maintain accounts
• It's always the one who runs the company who is responsible for accurate accounts
• It is important to have some knowledge in accounting
• Accounting shows the cash flow both in and out of the company – therefore you need a system
to manage your money
• Your preferred bank can help you to open bank accounts and credit transfer

42

3.5 Assignments and excercises

3.5.1 The Wheel (and other tools from Coompanion Skaraborg)

Management
Methods:
• Leadership – board of direction, mentor/trainer, managing director

• Membership (to be a cooperative member
• Purpose/vision

Entrepreneurship
• Business plan
• Marketing
• Budget plan
The cooperative/group
Group processes/teambuilding (tools and information)
Methods: Tools:
• democratic decisions Four field model
• common decisions Cooperative Quality
• common vision OPERA
• the group's overall knowledge
and experience Open Space
Information
• Cooperative principles and values

• Tax, laws and legislation
• Historical background
• CSR

43

• European Cooperative society (SCE)
Entrepreneurship
Management Information
The cooperative/
group

3.5.2 Making a business plan

Learning material from Innovation Centre Iceland (in Icelandic):
http://www.nmi.is/media/4533/GerdVidskiptaa%C3%A6tlana.pdf

Business plan template (Icelandic Innovation Centre):
http://www.nmi.is/studningur/ad-‐hefjast-‐handa/vidskiptaaaetlun/

44

4 Further readings

General ideology of the cooperative movement

Books

• Birchall, J. (1997).The International co-‐operative movement. Manchester University Press.

• Holyoake, G. J. (2012/1923). The History of the Rochdale Pioneers, 1844-‐1892. Nabu Press.

• Shaffer, J. (1999). Historical Dictionary of the Cooperative Movement. Scarecrow Press.

• Zamagni, S. & Zamagni, V. (2010). Cooperative Enterprise – Facing the challenge of Globalization.
Cheltenham: Edward Elgar Publishing Ltd.

• Van Bekkum, O.F. (2001). Cooperative Models and Farm Policy Reform. Exploring Patterns in
Structure – Strategy Matches of Dairy Cooperatives in Protected vs. Liberalized Markets. The
Netherlands Institute for Cooperative Entrepreneurship.

Articles

• Chloupkova, J. (2002). European Cooperative Movement – Background and Common
Denominators. Unit of Economics Working Papers 2002/4. Copenhagen: The Royal Venerinary
and Agricultural University.

• Skurnik, S. (2002). The role of cooperative entrepreneurship and firms in organising economic
activities – past, present and future. LTA, p. 103-‐124.

45

• Skurnik, S. And Vihirälä, V. (1999). Role of Cooperative Entrepreneurship in the Modern Market
Environment: Introduction and Summary. LTA, p. 375-‐383.

• Normak, P. (1996). A role for cooperatives in the market economy. Annals of Public and
Cooperative Economies 67(3), p. 429-‐439.

• Birchall, J. & Ketilson, L.H. (2009). Resilience of the Cooperative Business Model in Times of Crisis.
International Labour Organization.

• Pellervo. (1999, June). The Role of cooperative Entrepreneurship in the Modern Market
Environment [proceedings]. Special issue in Finnish Journal of Business Economics.
http://www.pellervo.fi/finncoop/proceedings.html

• International Co-‐operative Alliance. (2007). Factsheet: Differences between Co-‐operatives,
Corporations and Non-‐Profit Organisations. (Source: US Overseas Cooperative Development
Council).

The cooperative movement in Finland

Books online
• The Co-‐Operative Delegation. (2006). Co-‐operation: Responsible Finnish Ownership. Pellervo –

Confederation of Finnish Cooperatives.
http://www.pellervo.fi/kirjasto/text/Osuustoiminta%20englanniksi.pdf

46

• Pellervo. (2000). Corpaorate Governance and Management Control in Cooperatives.
Conferderation of Finnish Cooperatives. http://www.pellervo.fi/cg/raportti.pdf

• Pellervo. (n.d.). The Pellervo story – A Century of Finnish Cooperation 1899-‐1999. Confederation
of Finnish Cooperatives. http://www.pellervo.fi/finncoop/material/PStory.pdf

The cooperative movement in Sweden
Articles

• Westlund, H. (2003). Social economy and employment – the case of Sweden. Review of Social
Economy LXI(2 – June), p. 163-‐182.

The cooperative movement in Iceland
Books in Icelandic

• Helgi Skúli Kjartansson, Jónas Guðmundsson og Jón Sigurðsson. (2002). Samvinnuhreyfingin í
sögu Íslands. Reykjavík: Sögufélag
http://www.sogufelag.is/efni/samvinnuhreyfingin_%C3%AD_s%C3%B6gu_%C3%ADslands_0

• Guðrún Jóhannsdóttir. (2007). Breytingastjórnun – Hvað varð um Samvinnuhugsjónirnar?
Óútgefið lokaverkefni í viðskiptafræði. Háskólinn á Akureyri.
http://skemman.is/stream/get/1946/861/2908/1/HA040445_LOK.pdf

Books in English

• Malmström, V.H. (1958). A Regional Geography of Iceland. National Academy of Sciences –
National Research Council, Iceland.

47

• Karlsson, G. (2000). Iceland´s 1100 Years – A history of a marginal society. London: C. Hurst &
Co. (p. 243-‐266)

The cooperative movement in Poland

Articles

• Chloupkova, J., Svendsen, G.L.cH., & Gert Tinggaard Svendsen. (2003). Building and destroying
social capital: The case of cooperative movements in Denmark and Poland. Agriculture and
Human Values 20, p. 241 – 252.

The cooperative movement in Trentino (Italy)

Articles

• Menzani, T. & Zamagni, V. (2010). Cooperative Networks in the Italian Economy. Enterprise &
Society 11(1), March, p. 98-‐127.
• The Chart of Values of the Trentino cooperative system -‐ an analysis of the values and principles
that lay the foundations for the ethical reasons behind the cooperative movement is essential to
understand the history of the cooperative movement in Trentino and it importance at
international level. This is a summary of the evolution of cooperative ethics that pays particular
attention to the indications given in the Chart of Values (file Coop Principles & Values – in
Italian);
• Working papers -‐ Euricse -‐ Cooperatives: The Italian experiences di Carlo Borzaga, Sara
Depedri, Riccardo Bodini – (in English);
• Principi cooperativi per il ventunesimo secolo (Cooperative principles in the XXI century) by Ian
MacPherson
• Books-‐ only titles:
o Le cooperative by Alberto Ianes,
o COOP-‐ Il future dell’impresa cooperativa by Giulio Sapelli,

48

o La Cooperazione, tra mercato e democrazie by Stefano Zamagni and Vera Zamagni.

Useful websites

• www.stories.coop
• www.co-‐opstudies.org
• http://www.euricse.eu/
• http://2012.coop/en
• www.euricse.eu

49

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CURRICULUM AND STUDY MATERIAL

1.4.1 What is a cooperative?

The Robert-­‐Cliche Health Co-­‐operative is located in Beauce

1.4.6 Cooperatives in Europe – Facts, figures and general attitudes

1.5.1 Surveys and questionnaires

1.5.3 Tools / Writing assignments

2.5.1 Surveys and questionnaires

2.5.3 Tools / Writing assignments

3.4.2.1 1 -­‐ Idea

3.4.2.2 2 -­‐ Vision

3.4.2.3 3 -­‐ Mission

3.4.2.4 4 -­‐ The Business Plan

3.4.2.5 5 -­‐ Financial planning

3.4.2.6 6 – Planning of activities

3.4.2.7 7 -­‐ Registration

3.5.1 The Wheel (and other tools from Coompanion Skaraborg)

• Leadership – board of direction, mentor/trainer, managing director

Group processes/teambuilding (tools and information)

• Cooperative principles and values

3.5.2 Making a business plan

General ideology of the cooperative movement

• The Co-­‐Operative Delegation. (2006). Co-­‐operation: Responsible Finnish Ownership. Pellervo –

Books in Icelandic

You might also like

The Robert-‐Cliche Health Co-‐operative is located in Beauce

3.4.2.1 1 -‐ Idea

3.4.2.2 2 -‐ Vision

3.4.2.3 3 -‐ Mission

3.4.2.4 4 -‐ The Business Plan

3.4.2.5 5 -‐ Financial planning

3.4.2.7 7 -‐ Registration

• The Co-‐Operative Delegation. (2006). Co-‐operation: Responsible Finnish Ownership. Pellervo –