Forming an organization is not easy as it entails different requirements, sufficient number of people and a common goal to assure that the organization will be successfully initiated. An example of a small group is a co-operative. This paper discusses the idea that co-operative can be an alternative to the organization will be considered in this paper. Co-operatives can be considered as an important part of a community as they are usually formed for a special advocate which benefits the society in the end.
What is Co-operative?
A group of people who forms an association voluntarily with the intention to have a single economic and social focus is called an association. These are usually non-profit organizations which are owned and also managed by the people who are part of it voluntarily. Cooperatives have the purpose of bringing back something to the community that is why it is more favored by the government (Buckley and Dunning 32). There are no taxes to the said association as they usually give back to the community part of their profits. Their social goals make them more favored by the community. Hence, a large number of the said association usually survives longer than the normal organization. The proliferation of cooperatives in different communities shows how the said communities would use it as a way to achieve individual goals. Such as improved services for the people to make it easier and regulated.
Co-operative as an Alternative of Conventional Organization
A cooperative is seen as more advisable to form rather than a general organization as the former are usually less regulated by the government. This means, the formation is simpler, there is no necessary capital to be raised up and taxes are not typically implemented in it. The following are also seen as a reason why cooperatives can be a healthy alternative than an organization.
- Better corporate governance than conventional organization
The idea of forming an organization is very strenuous especially the fact that the government has strict regulations for its formation. There are papers to be filed and payment of capital that should be met. This is the downside of starting an organization as this will undoubtedly result to the exertion of time and effort to make it legal. However, for a cooperative, the government does not require stricter requirements as long as the purpose is for a social cause. This is to pursue the idea of forming cooperatives for it assures a better community in the end.
The said cooperatives also have their governance which can somehow be considered better than a conventional organization. Altman (213) states that an advantage is its ability to increase the amount and value of effort inputs into the process of production. The better corporate governance is seen as a reason why the said associations have better output process than other conventional organizations. The support of every member can be regarded as the reason why cooperatives become successful which can be better than other organizations despite many studies and theories to improve organization output.
- Better benefits than traditional businesses
The idea of most businesses is to create one to obtain profit in the end. However, this is not the idea of cooperatives as their primary goal is not gain profit but to pursue their social cause. This creates more benefits for the members and also the people. By merging the money of the members, the cooperatives can buy and sell products lower than the price in the market. This improves buyer power wherein they are given control on what to be sold in the cooperatives.
Forms of Cooperatives
The following are the forms of cooperatives which can be the focal point of their cause and intention to organize.
- Consumer cooperative- this is usually owned by the consumers who are the one who buys their goods from the organization (Mikami 2).
- Producer cooperative- these are composed of producers of goods that are usually commodities for a certain community. They combined their forces to be able to sell their products in the market.
- Workers cooperative. This is owned and controlled by the workers themselves wherein each of them is members of the said association.
- Purchasing cooperative. These are usually cooperatives owned by some businesses which usually intends to improve their buying power within a community.
- Hybrid cooperatives. This is a combination of different types of the association wherein there should be a common interest that binds them all.
Having cooperative as an alternative to conventional organizations can be considered in the future especially nowadays that some associations would also want to give back to the community. This can be a good step towards assuring that every organization created will be beneficial to the society and also the people who will be part of it.
Altman, Morris. “Workers Cooperatives as an Alternative Competitive Organizational Form”, Kalmi, Mark Klinedinst (ed.) Participation in the Age of Globalization and Information (Advances in the Economic Analysis of Participatory; Labor-Managed Firms, Volume 9) Emerald Group Publishing Limited, pp.213 – 235, 2006.
Buckley, Peter and Dunning, John. Cooperative Forms of Transnational Corporation Activity, Volume 13. Taylor & Francis, 1994.
Mikami, Kazuhiko. Enterprise Forms and Economic Efficiency: Capitalist, Cooperative and Government Firms. Routledge, 2011