COOPERATIVE voluntarily to meet their common

MANAGEMENT economic, social, and cultural

needs and aspirations through a
WHAT IS COOPERATIVE? jointly-owned and democratically
controlled enterprise”.
A voluntary association where a
minimum of 10 people come
together to work and achieve a
DIFFERENCE
common goal. 
BETWEEN
COOPERATIVE COOPERATIVES AND
MANAGEMENT CORPORATIONS
DEFINITION
1. A corporation exists as a
Cooperative management is an legal entity where it can sue or
effective and purposeful get sued while a cooperative
relationship between management does not.
in the meaning of cooperation 2. A corporation has
between individual, relatively limited liability while a
independent organisations or cooperative does not.
individual with the aim to increase 3. A corporation must
their competitiveness. deliver returns on investments
while this is not a must for a
In other words, cooperative
cooperative.
management, also co-management,
tries to achieve more effective and 4. A corporation is run by
equitable systems of resource centralized management under a
management. Representatives of user board while a cooperative is run
groups, the scientific community, and by the members.
government agencies should share
5. Shares of a corporation
knowledge, power, and responsibility
in cooperative management.
are transferable while those of a
cooperative is not.
COOPERATIVE SOCIETY

A cooperative is “an autonomous

association of persons united
 OBJECTIVES OF 1. VOLUNTARY AND
COOPERATIVE OPEN MEMBERSHIP:
MANAGEMENT

1. To achieve common goals,

2. To utilize resources, One of the cardinal principles of
co-operative is that the
3. To fulfil social obligations,
membership of a cooperative
4. To maintain economic society should be voluntary and
growth, open. Hoylake defines “a
5. To ensure the survival of a cooperative society as a voluntary

cooperative society in a fast- concept, with equitable

participation and control among
changing environment,
all concerned in any enterprise.”
6. To improve the personality
and calibre of people to raise
their efficiency and So it may conveniently be said that
productivity, the voluntary membership means

7. To meet the challenge of that the

members of a co-operative society
change.
must join it voluntarily without
7 PRINCIPALS OF
being coerced.
COOPERATIVE Voluntary membership not only
MANAGEMENT strengthens
individual responsibilities but it
differentiates cooperation from the
state scheme of social reforms.

2. DEMOCRATIC
MEMBER CONTROL:
 of capturing control by a few hands
by virtue of shareholdings.

3MEMBERS ECONOMIC

Paul Lambert remarked,

PARTICIPATION:
“Democracy is the cardinal
principle. It distinguishes co-
If a co-operative society decides to
operative business most sharply
distribute such surplus, the
from capitalist business and it can
distribution must be on the basis of
be applied uniformly to any type of
members’ dealing with the society
co-operative.”
and not on that of the number of
shares held as in the case of
capitalist organization. Co-
It is obvious from the above
operative recognizes that capital is
that one of the distinctive features
entitled to a fair interest, but it
of co-operative works is that
refuses to admit any other right
members select from amongst them
attaching to its possession or
their own leaders, whom they can
claimed by its owner and more
also remove. The principle, “one
especially the claim to a controlling
member, one vote” is followed by
voice in the enterprise.
the cooperative society and this
principle eliminates the possibility
The principle is that if
interest is paid on share capital, the
rate should be limited and fixed on maintain their cooperative
the ground that the supplier of autonomy.
capital is not equitably entitled to
share in savings, surplus or profit.”

They remain independent from outside

entities by controlling our own
SURPLUS - Excess of income cooperative destiny through individual
over expenditure for a financial equity payments, purchases, voting

year. power, and other forms of

participation and he notion that
4. Autonomy and
cooperatives exist to serve the interests
independence: and needs of their owners.

5. Cooperation among
cooperatives:

Cooperatives are autonomous, self-

help organizations controlled by
their members. If they enter into
agreements with other
organizations, including
governments, or raise capital from
external sources, they do so on
terms that ensure democratic The principle of co-operation
control by their members and among co-operatives is essential for
the survival and maintenance of
the growth of the co-operative The ICA rules provide that “all co-
movement. ICA Commission, 1966, operative societies shall make
stated, “All cooperative provisions for the education of
organizations in order to best serve their members, officers and
the interest of their members and employees and the general public,
their communities, shall actively in the principles and techniques of
co-operate in every practical way co-operation both economic and
with other co-operatives at local, democratic.”
national and international levels.”

Co-op owners knew from early on Through co-operative education

that the most effective way to and training, members of co-
strengthen the cooperative operatives learn how to actively
movement is by working together participate in the management of
through local, national, regional, their respective co-operatives and
and international structures. There improves their understanding on
are many reasons this principle their roles. Thus, co-operative
quickly became internationally education and training is an
recognized: the weakness of important asset not only in
independent operations and it attracting and maintaining
creates a sounder operating membership but also in ensuring
practices. sustainability.
6. Cooperative education:
7. Concern for community:

ORGANIZATION
STRUCTURE

Cooperatives work for the

sustainable development of their
communities through policies
approved by their members.

The seventh principle is where we

can talk about the cooperative
vision, the values of democracy,
human development, social
responsibility and economics "as if
people matter" as the saying goes
“While focusing on member needs,
Cooperatives work for the
sustainable development of their
communities through policies
accepted by their members”
 TYPES OF
ORGANIZATION COOPERATIVES
1.Consumer Cooperative:

These businesses are owned and

governed by consumers of the
STRUCTURE particular area for their mutual
benefit. Their view is to provide
daily necessary commodities at an
optimum price. Rather than
earning a pecuniary profit, their
aim is towards providing service to
the consumers.
 2.Credit Cooperative:
4.Marketing Cooperative:

Credit unions are generally

member-owned financial
With the aim of helping small
cooperatives. Their principle is of
producers in selling their
people helping people. They
products, these societies are
provide credit and financial
established. The producers who
services to the members at
wish to obtain reasonable prices
competitive prices. Each and every
depositor has the right to become a for their output are the

member. Members attend the members of this society.

annual meeting and are given For securing a favorable market
rights to elect a board of directors. for the products they eliminate
the middlemen and improve the
3.Farming Cooperative: competitive position of its

An agricultural cooperative, also

known as a farmers’ co-op, is a
cooperative where farmers pool
their resources in certain areas of members. It collects the output

activity. … Supply cooperatives of individual members. Various

supply their members with inputs marketing functions like
for agricultural production, transportation, packaging,
including seeds, fertilizers, fuel, warehousing, etc. are performed
and machinery services. by the cooperative societies to
sell the product at the best
possible price.
6.Producer Cooperative:

5.Housing Cooperative:

To protect the interest of small

producers, these societies are set
up. The co-operative society
members may be farmers,
landowners, owners of the fishing
To help people with limited income
operations. To increase the
to construct houses at reasonable
marketing possibilities and
costs, these societies are
production efficiency, producers
established. Their aim is to solve
decide to work together or as
the housing problems of the
separate entities.
members. A member of this society
aims to procure the residential
They perform several activities like
house at a lower cost.
processing, marketing &
They construct the houses and give
distributing their own products.
the option to members to pay in
This helps in lower costs and
instalments to purchase the house.
strains in each area with a mutual
They construct flats or provide
benefit to each producer.
plots to members on which the
members themselves can construct
the houses as per their choice.
7.Healthcare Cooperative:
Common Ground Healthcare
Cooperative provides health
insurance to more than 25,000
individuals and family members.
Like many insurance companies,
Common Ground Healthcare
Cooperative’s product offerings
include PPO plans.