Co-operative Organizations

What it is??

• It is an association of economically weak person. They come together for the promotion of their common economic interest .

• They form the association on the basis of equality i.e. all member of society gets equal risks.

• The motto of cooperative societies was service and not profit.

Continue……….

– According to international labor office ”A co-operative organization is an

association of person usually of limited means who was voluntarily joined together to achieve a common economic end through the formation of a democratically controlled business organization making equally contribution to the capital required and accepting affair share of risks and benefits of undertaking.

Features of Co-operative org.:

1)Service motive: It is establish primarily to rendering service to its member in particular & to the society. Profit is 2nd motive.

2)Voluntarily Association: It’s a voluntarily association of individual belonging to a homogeneous group.

3)Open membership: Open to all people

4) Membership: minimum no. of member is 10 and maximum is no limit

5)Democratic: Mgt is democratic nature

6) One man one vote

Advantages

Easy formation: As it does not required long & complicated preliminaries.

Limited liabilities: members liability is limited to their capital contribution.

Continuity: the life of cooperative society is based & remains unaffected by the death insolvency or convenience of a member.

Reasonable price : it sell product at cheap rate.

Service motive: organization based on service motive & therefore black marketing is not possible.

Democratic nature: the mgt of co-operative org democratic in nature.

Disadvantages

Limited capital: Cooperative org generally have limited capital because they are generally low income group people.

Lack of technical knowledge: management of cooperative societies generally lacks in technical knowledge & experience.

Interference of politician: sometimes due to the interference of politicians the cooperatives are mono polished which leads to frauds & losses of to all members of society.

Lack of co-ordination :It may suffer due to lack of co-ordination between various member.

Not suitable: this form of org is not suitable for large scale industries.

Types of cooperative societies:

1) Producers Cooperative Society

2) Consumers Cooperative Society

3) Housing Cooperative society

4) Cooperative Credit Society

1) 1) Producers Cooperative SocietyProducers Cooperative Society

• Here workers come together & start their own organiasation.

• They will elect their own manager to look after the business.

• The profit earned is shared among themselves.

• It prevents exploitation of workers• E.g.. Agriculture & Cotton industries

2) Consumers Cooperative Society2) Consumers Cooperative Society

• These are formed for the purpose of making availability day to day requirements of goods to their members at cheap prices

• They buy goods from wholesaler at wholesale prices and sell them to members and after to non member as well as prices slightly lower than the market price.

• Main objective is to eliminate• E.g.. Cooperative stores in schools &

colleges, factories etc.

3) Housing Cooperative society3) Housing Cooperative society

• These are formed for the purpose of getting plots or constructing houses for the needy persons.

• Govt. provides great facilities like low rate loans exemptions in taxes etc.

4) Cooperative Credit Society4) Cooperative Credit Society

• To provide the finance to poors in the form of loans at low rate of interest

• It also provides occupation & earnings to societies neglected class like widows physically handicapped or poor section of community

• Limitation is capital, efficiency of mgmt, favourism & political influence