UNIQUENESS OF COOPERATION

1. Co-operation is based on the principal of self-help through mutual help, abolition of profits

and service above self.

2. In cooperation, individual freedom occupies a very important position.

3. The principles of ‘voluntary association’ and ‘democratic management’ are the guidelines

for the cooperative movement.

4. Cooperation eliminates the employers and provides independence to the workers.

5. A cooperative society is a union of weak and needy individuals who have equal rights and

has one vote irrespective of the number of shares held by him

 Cooperative is owned and controlled by an association of members.

 It can be set up as a for-profit or as a not-for-profit organization.
 This is the least common form of business, but can be appropriate in situations where a group of
individuals or businesses decide to pool their resources and provide access to common needs,
such as the delivery of products or services, the sale of products or services, employment and
more.

THE ADVANTAGES AND DISADVANTAGE OF COOPERATION

Advantages

• Owned and controlled by its members;

• Democratic control (one member, one vote);

• Limited liability;

• Profit distribution.

Disadvantages

• Longer decision making process;

• Participation of all members is required in order to succeed;

• Possible conflict between members;

• Extensive record keeping;

• Less incentive to invest additional capital.

MANAGEMENT FUNCTIONS

Overall, management embodies four functions:-

1.Planning

2.Organizing

3.Directing/Motivating

4.Controlling

1. Planning

Planning determines where the organization is going and how it will get there. It sets organizational
objectives and goals, forecasts the environment in which objectives must be accomplished, and
determines the approach by which objectives and goals are to be accomplished. Planning is used to
determine a policy and the procedures for putting it into effect. Planning usually consider several
alternatives. Each should be judged based on its economic or competitive effect and accompanying
problems. Also, it must be consistent with cooperative principles and the association’s objectives.
Planning helps a manager shape the future of the organization rather than being caught in an endless
trap of reacting only to current crises or problems.

2. Organizing:

Organizing is concerned with determining the specific activities needed to accomplish the planned
objectives and goals; grouping the activities into a logical pattern, framework, or structure; assigning the
activities to specific positions and people; and providing means for coordinating the efforts of individuals
and groups. Organizing is a bridge connecting the planned objectives to specific projects for
accomplishing these objectives.

3. Directing

Directing through motivation concerns the people side of the organization. Cooperatives are people-
driven organizations, from the standpoint of both employees and members. Managers must have
leadership skills and be effective communicators. The manager’s ability to influence members through
leadership will help determine the extent to which both individuals and the entire organization
accomplish their goals.

4. Controlling

A manager spends up to 95 percent of the time communicating. Good communication is essential to

coordinating the organization’s human and physical elements into an efficient and effective working
unit. In controlling, management monitors the progress of planned activities. If progress is lagging,
necessary adjustments are made. Controlling is the checkup part of a manager’s job.
ROLE OF MANAGEMENT

 Management combines ideas, processes, materials, facilities, and people to effectively

provide needed services to member-owners.

 Management is the decision-making element of the

cooperative. Broadly speaking, its role entails formulating and executing operating policies,

providing good service, maintaining financial soundness, and implementing operating efficiencies

to successfully meet its objects.

 A successful cooperative is viable in an economic or business sense and maintains or

improves its cooperative character or features. A cooperative may succeed as a business, but

gradually lose its cooperative character regarding member control, serving the needs of members,

and distributing net margins. Likewise, it may succeed for a while as a cooperative, but fail as a sound
business institution.

 Managing a cooperative is challenging and difficult. It involves not only managing resources and
business operations, as other businesses, but also dealing with problems stemming from the
cooperative’s distinctive characteristics. Because the cooperative’s members are both owners
and patrons, special relationships and problems arise concerning member and board of director
roles and responsibilities. Seemingly conflicting answers to questions arise. What is different in
managing a cooperative from any other type of business? The answers can range from “all the
difference in the world” to “none at all.”

 Managing a cooperative is different from other types of business as ‘Decision-making techniques

are identical, but the cooperative’s objectives are different; therefore, the manager’s
conclusions will be different’.

Cooperative principles and objectives present a distinctly different managerial premise. That premise is
revealed in more detail through the following perspectives an executive must acquire to be good
cooperative manager:

1. Adjusting decision-making to a business where the customers are also the owners.

- In a supply purchasing cooperative, many of the successful techniques associated with developing a
saleable and satisfactory product (for the customer) no longer apply. A cooperative manager must
adjust priorities and objectives to the realization that what's best for the customer really is best for co-
op.

2. Dealing with complex issues of equitable treatment of owner-patrons, the manager of an IOF will
discover that distributing the net earnings of a cooperative is much more complicated than declaring a
dividend on capital stock.
- The concept of net earnings based on individual member volume, such as units marketed or quantity of
supplies purchased, will be new to IOF managers. Member owners will also have to share equitably in
financing the cooperative, and that management communicates that responsibility to them.

3. Working in a service-oriented organization is a spotlighted atmosphere.

- Managers of a typical cooperative will find that members formed it to provide a needed marketing or
purchasing servicer. Often, members may wish to express their views directly to the manager. Senior
manager of a regional cooperative once observed, "a major change I had to face was working under a
spotlight".

4. Cooperatives have unique management implications of business ownership and control.

- Managers seek to "gain control" of a company by outstanding performance, political maneuver, or

eventual ownership. A cooperative manager can never acquire "ownership rights," and must become
resolved to always being an employee. The prospective cooperative manager needs to carefully assess
whether his/her management style is compatible with the constraints of a cooperative.