Advantages of cooperatives
|Advantages of cooperatives|
Cooperative is an association of people united voluntarily who want to provide themselves and others with common needs. For example these are economic, cultural and social needs. cooperative is an organization in which the most important thing is to meet the needs of their members and, secondly, to bring profits. Cooperative is also known as: co-operative, co-op, or coop. Cooperation dates back as far as human beings have been meeting for common benefits. Initially, people focused on expanding local supplies.
Cooperative has its own specific goals, we can summarize them:
- provide goods and services to customers
- eliminate profits of middlemen in business,
- prevent the use of the weaker members of society,
- protect the rights of consumers and manufacturers,
- promote mutual respect and education of their members.
Main advantages of cooperatives
- increase of competition
- cost reduction of procurement of goods or selling,
- provide high quality services to specific group of interested people (which may be unprofitable to big business),
- provide various resources to members (credit, housing, etc.),
- cooperatives are owned and controlled by members,
- profits of cooperative are transferred directly to members, members decide about fund transfers,
- cooperatives with open membership provide important social service to the community,
- decision are undertaken democratically,
- often this type of business is supported by government,
- middlemen are eliminated which leads to cost reduction, main goal of cooperative is good service not profit for a limited few people.
It is also worth mentioning that the cooperative promotes cultural, social and educational values. They can be used in many ways to benefit people in their daily life needs. An important aspect of cooperation is that individuals can, by combining with each other, achieve the benefits available to wealthy and influential people so that they can develop.
Types of cooperatives
Co-operatives are created for different people to achieve specific benefits. Stands out various types of cooperatives, for example:
- Retailers' Cooperatives - they create retail stores to meet the needs of customers in the community. They are often found in small towns or villages where local businesses have been closed. The industries in which they are created: food, agricultural. products, computer equipment, etc.
- Workerer Cooperatives - members of the cooperative are both employees of the company as their owners. These are often entrepreneurs who start a new business or transform existing businesses. This is one of the fastest growing types of cooperatives. The industries in which they are created: bakeries, software development groups, etc.
- Producer Cooperatives - they are created, owned and operated by producers. They can decide to work together or as seperate entities. Manufacturers deal with process, market, and distribute their own products. The main advantage of this solution is cost reduction. The industries in which they are created: agricultural products, carpentry and crafts, etc.
- Service Cooperatives - this is a type of a type of consumer cooperative, which is designed to fill a need in the community. They are organized to provide members control over the services offered. The industries in which they are created: child care, health care clinics, etc.
- Social Cooperatives - this is a specific form of a working cooperative. The subject of activity of the social cooperative is first of all running a joint enterprise based on the personal work of members for the social and professional reintegration of its members.
- Housing Cooperatives - the main task of housing co-operatives is to meet the housing needs and other needs of members and their families by providing members with independent dwellings or single-family houses, as well as premises for other purposes. Examples: rentals, single family homes, condominiums or market rate.
- Valentinov, V. (2007). Why are cooperatives important in agriculture? An organizational economics perspective. Journal of institutional Economics, 3(1), 55-69.
- Andrea Harris, Brenda Stefanson, and Murray Fulton (1996). New Generation Cooperations and Cooperative Theory An Agricultural Law Research Article 15-26
- Chris L. Bruynis, Peter Goldsmith, David E. Hahn, and William J. Taylor (2001). Key Success Factors for Emergining Agricultural Marketing Cooperatives Journal of Cooperations, 15-21
Author: Ewa Wójcik