Professional Documents
Culture Documents
com
By ex-TYBMS students.
Contents
Section I
Ch 1: Introduction
Ch 2: Historical Perspective in Indian Context
Ch 3: Cooperative Movement in the World Context
Ch 4: Organisational Structure of a Cooperative
Ch 5: National Level & International Cooperative Organisation
Ch 6: Role of State Government
Ch 7: Professionalisation of Management
Ch 8: Various types of Cooperatives
Ch 9: Problems of Cooperatives & Remedies
Ch 10: Problems of Democratic Control & Corrective Measures
Ch 11: Positive Points of Co-operatives
Conclusion
Section II
Co-operative Marketing
India's White Revolution In Milk Production
Dr. Verghese Kurien
Amul Saga
Article I
Section III
University Nov 2001
Prelims 01
Suggested Q's
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
A Question asked by the TYBMS students is that what is the need to have this subject
"Management of Co-operatives" in Vth Sem for BMS?
The objective behind this subject is to highlight various form of economic systems such
as capitalism, socialism, communism and compare them with co-operation.
Cooperation is an ideology for not only economic but for social and political one.
Cooperatives in Maharashtra have been providing leadership to the state in the way of
leaders such as late Shri Vasantrao Dada Patil, Mr Sharad Pawar, Mr. Vilasrao Deshmukh
etc.
India being a developing economy is ridden with problems such as poverty, low per
capita income, unemployment, illiteracy, superstitions, casteism, religious
fundamentalism etc. Cooperation as an ideology has the power to remove these hurdles
and create a just society on the principle of social justice.
The historical perspective in the Indian context from Ancient times to the era of
Globalization in the 1990’s. The world historical context is aimed at two countries,
England with its Rochdale pioneers and Germany with its Reiffeisen principles. The
various acts such as 1904, 1912, 1960 are to be covered with recommendations of 1954
committee.
These topics are to be covered in detail on their formation to their economic activities
with their role in the development of social, economic and political life in India.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Cooperatives have distinct identify in comparison to joint stock companies or partnership
/ sole proprietorship. These factors are to be highlighted in context of ownership,
business, management, liability, division of surplus etc.
Problems and challenges before cooperatives is a very important topic. Problems such as
corruption, Dual Control, Politicization, mismanagement, lack of funds,
unprofessionalism etc are to be highlighted well as they are important from the point of
view of the case study.
Understanding the role and functions of various boards such as NDDB, NCCF,
NABARD, NAFED, NCDC, ICA, KVIC, would be helpful.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Syllabus
Part I
1. Historical Perspective of Cooperative Movement
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Concept
The concept of co-operation and mutual help is not new to Indians, since ancient times
Joint family system has been a practical ideology for Indians. Principles of co-operation
are the find of Joint family system.
The word co-operation is quite familiar to a common man. For him co-operation is
simple working together in any sphere of human activity. In this sense, the roots of
co-operation can be traced as far back as the beginning of human civilization. The
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
modern biologist have claimed that co-operation are the group instinct in man which
enabled him to live together, work together, and help one another in times of difficulty,
has been biologically one of the most important and vital instincts.
It is true that some experts have highlighted man's progress in terms of aggression.
However, we have also evidence available from the writings of great authorities like
Propotkin who have stressed sociability to be as important a law of nature as mutual
struggle. In his Mutual Aid, he asserts that, the human society has been sustained on the
basis of mutual aid. H. G. Wells observed co-operative action in nature while Nietzsche
felt that there was antagonism at the heart of the world. Broadly, on the basis of nature of
things and course of development, one can certainly conclude that despite competitive
struggle for existence among men, co-operation has contributed significantly as a force in
the voluntary development of man. E. R. Bowell has rightly stated, "Co-operation is a
universal instrument of creation”.
Both co-operation and competition have a role to play in the development of human
society and civilisation. However, it would be still correct to conclude that co-operative
forces have contributed to development much more substantially as a result of group life
and group activity. Mill, in his book Principles of Political Economy (1876), has observed
“Co-operation transforms human life from a conflict of class struggle for opposite
interests to a fair rivalry in the pursuit of common good of all”.
Thus, attempts to explain the nature of co-operation can be noticed in the writings of
eminent philosophers, economist, sociologist, etc. from the old times up to this date.
Definition
The International Labor Organization (ILO) points out that “A Co-operative
Society is an association of persons, usually of limited means who
have voluntarily joined together, to achieve a common end, through
the formation of a democratically controlled business organization,
making equitable contribution to the capital required, and accepting
a fair share of risks and the benefits of the undertakings”.
According to International Co-operative Alliance “A Co-operative is an
autonomous association of persons united to meet their common,
economic, social, cultural needs and aspirations through a jointly
owned democratically controlled enterprise”.
According to Lambert “A Co-operative Society is an enterprise formed
and directed by an association of users, applying within itself the
rules of democracy and directly intended to serve both its own
members and community as a whole”.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
The Mac lagan Committee in India (1950) has defined co-operation as “The
theory, which maintains that an isolated and powerless man can, by
association with others and by moral development and mutual
support, obtain to that extent the material advantage available to
the wealthy and powerful persons and thereby develop himself to
the fullest extent of his natural ability”.
Conclusion
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Based on different definitions co-operative society is a voluntary and democratic
association of persons with common economic need, working on the basis of equality,
self-help and mutual help.
3. It is an undertaking
4. Less stress on Profits because the main objective is to meet common economic
ends through mutual help.
8. Concept of equality
11. Each for every one (self help through mutual help)
Characteristics
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
5. The motto is to serve rather than to earn: Inspite of the fact that an element of
profit is attached; the main aim is service, which is the prime objective of the co-
operatives.
6. The key of co-op is mutual-help and self-help: With a slogan – Each for all and all
for each.
7. This basis is equality and equity: The members of a co-operative are equal,
irrespective of their differences in social, economic, political conditions. The most
distinctive feature of a co-operative society is that the surplus or profit is distributed
not according to the proposition of Business operations, transacted by members
during a given period.
9. Larger Perspective: It also aims at not only serving its members but also for the
community at large.
Beneficiaries Of Co-Operation
Co-operation touches everyone’s life, directly or indirectly. The house you may be
staying in or the shop you conduct your business from may be a co-operative society. The
tea, which you drink, has sugar and milk in it, in all possibilities the sugar has come from
a co-operative sugar factory and the milk from a Dairy Co-operative. The clothes that you
wear may be from a co-operative Textile Mill.
Formation
Co-operation helps you to organize your own group. You can select the people with
whom you wish to interact (this is, however, difficult in case of housing societies, where
societies may be formed after everybody has acquired their houses).
Your group is regulated by regulatory machinery and is a legal entity. You can elect your
office bearers and they are not only answerable to you but are also governed by the laws
of co-operation.
Your group is protected by elaborate laws. You can grow economically by helping and
co-operating with each other.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Our society has developed towards a more self reliant one. Therefore the factor of self-
regulation is not far. Any civilized society thrives on self regulation as to be civilized is a
self-chosen path.
Co-operation offers the solution for the times. A completely democratic set-up with laws,
which border on moderation.
Conclusion
Encouraging people to work together and help one another solve mutual problems
Messages
It is essentially an activity of the people for mutual help and collective progress.
The groups can organize themselves to cater to diverse interests, from housing
societies, to industrial production to co-operative credit to massive co-operative
banks.
Co-operation helps you to organize your own group. You can select the people with
whom you wish to interact (this is, however, difficult in case of housing societies,
where societies may be formed after everybody has acquired their houses).
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Chapter 2: Historical Perspective in
Indian Context
Contents
1. Development Of Indian Co-operative
2. Recommendations of Co-operative Movement
3. Co-operation In Maharashtra
The main objective was to combat indebtness and provide credit to the agriculturalist.
With reference to the agro based of Indian economy the co-operative sector has played a
substantial role in the process of lending a helping hand for economic upliftment.
With the passing of time, the co-operative act was amended, with a net result that co-
operation, expanded its role, from a mere agriculture credit provider to helping, in other
inputs, like seeds, fertilizers, pesticides, storage, marketing and processing. It also
expanded into wholesaling and retailing trade, consumer distribution, rural and small-
scale industries, urban credit, training of co-operative personnel etc.
The Co-operative Movement has left no sector of the economy untouched. But inspite of
its existence, for almost a century, it has definitely not shown an outstanding growth. To
study the growth and progress of co-operative movement we have to look back in the
history.
The first legislation in the field of Co-operation in India was on the Co-operative Credit
Society for releasing the farmers from the clutches of moneylenders. It was Co-operative
Credit Societies Act 1904, thereafter came the Co-operative Societies Act 1912. In order
to suit the circumstances existing in different provinces, need was felt to have separate
legislation for the particular province .The Bombay province then enacted the Bombay
Co-operative Societies Act 1925. It is then replaced by Maharashtra Co-operative
Societies Act 1960 and Rules 1961.
I Period prior to the enactment of the 1st co-operative society act 1904
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
II Period between 1904 – 1951 before the beginning of planning in India
III Growth of co-operatives during the planned period (5 yr. plans)
Present Situation
The credit of initiating the co-operative movement as seen earlier goes to the Rochdale
Pioneers from England. The policies of organizational setup adopted by them, have
survived the test of time and have become the principles of co-operative movement.
Co-operation is not new to India, but the versions were different. In ancient India, it was
• Kula – Family
• Jati – Caste
• Gram – Village
• Sreni – Classification at different levels
The Kula was the 1st form of a co-operative activity; it was both a political and socio-
economic activity. As the society stabilized and expanded the aspects of economic and
social co-operation narrowed to the limits of joint family. Where the land is owned and
cultivated commonly and the adult members share the duties of the family and live under
one roof. Co-operation at the Gram (village) level emerged after the Kulas were
stabilized. The gram sabha was a co-operative engine which undertook, the works for
economic and social progress of the village commons such as land, pastures, roads,
highways, paths, common gardens, etc.
The artisans and cultivators often combine for the purpose of co-operative working and
the members jointly undertook, the use of selling of tools and implements of production.
The Sreni has been a development of the post Vedic era.
The co-operative and economic organization in this time was more of artisans, industrial
and handicrafts workers, merchants, traders, bankers, agriculturists, house builders, etc.
The Sreni worked basically as bankers and merchants guilds but also extended their role
as charitable institutions.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
The co-operation at Jati level was mainly for achieving social goals such as education,
charity, and relief work.
Co-operation became legalized and was introduced as official movement in 1904. This
was considered as a turning point in the economic and social history of India. The period
between 1904 – 1951 can be studied better if it is divided into the following stages.
1904 act provided an impetus for organization of primary credit societies and stress was
laid on promoting agricultural credit. There were 8187 societies by 1912, which had a
membership of 4lakhs and working capital of 3357.7lakhs. One of the major features was
that the government was the prime mover of this movement but the credit was marked by
insufficiency and delay, and the recoveries were far from satisfactory.
The loans system was also defective. Mr. C.S. Campbell, the registrar of co-operative
society Bombay had correctly pointed out that, the lazy secretary of a dull sort, will
collect and pay out again to the same person by the book of transaction.
The worse of the system is lump on another day, meanwhile a guest comes, a cow dies,
etc are some of the excuses.
1912 saw the amendments, where another co-operative societies act was enacted and the
defects of the 1904 act were removed. Some important changes of the new act were:
c. A provision was made for the distribution of profits in order to protect the interests of
the investors.
This period saw a rapid growth in the number of co-operative credit societies but also of
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
III. 1919 – 1929
With the introduction of reforms act of 1919, it gave an option, of modifying the existing
act 1912, at the provincial level. Certain provinces did enact their own acts, which gave
rise to a rapid growth of the movement in this time. This is referred as the period of
unplanned expansion.
The great economic depression gave a serious set back to the co-operative sector. The
falling prices of the agricultural products threatened the existence of some societies and
disturbed the economic stability of others.
Other major causes of the failure where, lack of requisite education and adequate
supervision and guidance. During this period of stress, rectification and rehabilitation was
the main aim of the co-operative departments. Rather than expansion one of the
significant development was the establishment of Reserve Bank of India in 1935. Its
agricultural credit department was entrusted the responsibility of studying the problems
of the agricultural credit.
V. 1939 – 1947
The Second World War and the rising prices made it possible to recover the over dues,
with the scarcity of resources due to war, lot of control were imposed on the distribution
of essential commodities.This helped the consumer co-operatives for a better
organization. The co-operative movement, which was till then, confined more or less as a
credit movement started diversifying its activities. The important landmark was the
setting up of co-operative planning committee under Mr. R.G. Sargiya, who suggested
that the credit supply covered only one aspect in the life of a cultivator, but should extend
its cover to his entire life. This period is treated as the period of recovery.
The most important event in the post independence era was the appointment of rural
credit survey committee, by the RBI – 1951. The report submitted by the committee,
revealed that, inspite of a co-operative effort, over the last 50 yrs. Rural credit is still
considerably controlled by the private agencies, whereas the institutional agencies played
a significant role. The co-operatives provided 3.5% of total borrowings by the
agriculturist and that too was taken up by the wealthy members of the credit society.
The committee recommended for an integrated scheme of rural credit, which will have
state partnership, creation of special funds with RBI, today called national agricultural
credit stabilization, national agricultural relief and guarantee funds.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
It is also recommended, establishment of large sized credit society, linking credit with
marketing, training and co-operative personnel and effective supervision and audit.
The 1st plan recognized (1951 – 56) co-operative as an instruments of planned economic
action in democracy. It also stated that since the purpose of the plan is to change the
economy from individualistic to socially regulated economy co-operation could be an
effective tool, to implement this ideal.
The 2nd plan (1956 – 61) was based on the recommendations of the All India Rural
Credit Survey committee. The RBI acts was amended thereby, the rural credit facilities
could be improved. There were provisions made for the creation of special funds as
recommended by the committee. The national co-operative development and
warehousing board and state warehousing co-operatives were setup. This plan also gave
attention to the marketing and processing co-operatives. This period saw a rise in the
number of societies from 2.4lakhs between (1953 – 56) to 3.32lakhs in (1960 – 61),
18,000 primary marketing societies, 390 processing units, 30 co-op sugar factories and an
intensive program for co-operative training was implemented.
The 3rd plan 1961 – 66 saw the use of co-operative movement in implementing, the
schemes of economic development. By the end of the plan, primary agricultural credit
societies covered 89% of villages and total number of societies was 1.92lakhs. The
emphasis was more on making the societies more viable than expansion. Inspite of the
efforts of revitalizing 31% societies still work, at loss. This period also saw as emergency
and development of agro based processing industries – e.g. sugar factories, butter
processing, rice mills, oil crushing, fruit and vegetable co-operatives etc. where as the co-
operative stores raised from 7058 in 1960 – 61 to 13077 in 1965 – 66. There was also an
attention paid to the formation of consumer and industrial co-operatives.
The 4th plan 1966 – 71 had a keynote of growth and stability. The agricultural and
consumer co-operatives occupy a central position in the co-operative movement. A
committee was setup by the governor of RBI to review the supply of rural credit and
intensive agricultural program, which gave a series of recommendation like
Rural electrification
The 5th plan 1971 had a keynote of growth and social justice. More attention was
therefore given to consolidate and strengthen the co-operatives so as to make them,
viable, democratic institutions. An attempt to establish stable and fair price shops,
through the consumer co-operative was made.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
The same trend of strengthening continued in the 6th and 7th plan in which the dairy and
fishery co-operatives were initiated along with development of professional management
in co-operative institutions and development of managerial levels were also touched
upon.
4. Present Situation
Today there are 14 national level co-operative federations, there is also a co-operative
union and a national council for co-operative training and 24 states level co-operative
unions. Pune has a national level training institute for co-operative management i.e.
Vaikuthbhai Mehta Institute of Co-operative Management. Other than this, there are
17 colleges and 73 training centers for training and education in co-operative. At state
level there are 26 state co-operative banks and 344 district central co-operative banks.
Co-operatives for weaker section includes co-operative rural banks, dairy, poultry,
fishery, coir, silk, honey, handloom, etc. Amul is the best example in Asia for its milk and
milk products.
The first Indian co-operative act was passed in 1904 under the Viceroy Lord Curzon.
During the period of 1904-1912 the co-operative movement made rapid strides in
different fields. To boost the development process the government of India appointed a
committee under the chairmanship of Sir E.D. Mac lagan to observe and suggest
recommendations.
Recommendations
To recommend the developmental majors for co-operative sector in Rural India, the
Government of India appointed a committee under the chairmanship of A.D. Gorewalla
in 1951. This committee submitted its recommendations in 1954.
Recommendations
In May 1960 the committee under the chairmanship of Dr. Vaikunthbhai Mehta gave its
report to suggest recommendations on strengthening the co-operative credit structure.
Recommendations
6. Co-operation In Maharashtra
Maharashtra is one of the major States of India. It is also the most urbanized and
industrialized State. Co-operative movement is widespread and has a long history in
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Maharashtra and even today it plays an important role in the economy of Maharashtra.
The genesis of the co-operative movement in Maharashtra can be divided into six stages.
1. The pre-co-operative stage (1870-1903) with the Deccan Agriculturists’ Relief Act,
The land Improvement Loan Act 1883 and the Agricultural Loans Act, the Nickolson
Report.
2. The Initial Stage (1904-1911) from the Agricultural Credit Co-operative Societies Act
1904 to the creation of the Bombay Central Co-operative bank.
3. The Evolution Stage (1912 to 1924) After the Co-operative societies Act of 1912, the
movement passed through a new phase of re-organization, formation of co-operative
financing agencies, formulation of co-operative educational schemes and organization of
non-credit societies.
4. The Stagnation Stage (1925-1947) The enactment in 1925 of the Bombay Co-
operative Societies Act widened the scope of the movement in the Bombay province both
horizontally as well as vertically. The Bombay Co-operative Insurance Society was
established in the year 1930. In the same year the Co-operative Land Mortgage Bank was
also formed for long term financing for redemption of debts, land improvement and
purchase of land.
5. The Growth Stage (1948-1961) There was an all round progress during these two
decades after India attained Independence from the British Rule. The movement
diversified especially in the rural area where sugarcane was grown. The agriculturists
pursued this concept of self-help and made the best use of the credit facilities given to
them for augmenting the production. Examples like the Pravaranagar Sugar Co-operative
inspired many to organize co-operatives in the sugar sector with long-term goals in mind.
Significant attitudinal changes had occurred at the grass root level.
This was also the period of emergence of rural leadership through co-operative
movement.
The Apex Bank also started to strengthen its organization and the working of the
secondary level central financing agencies. This was also the period where institutional
foundation was strengthened.
The State government initiated policies and programs to strengthen the co-operative
effort. Some of the noteworthy features of the movement during this period were the
increased mobilization of resources, strengthening the co-operative effort in the sphere of
agricultural production and the building of rural leadership.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Right from the don of civilization, the concept of co-operation has existed. In a primitive
society, a man’s life was simple with only a few wants. As the civilization grew, instead
of an individual, the villages emerged with a large number of farmers and a few
carpenters, cobblers, goldsmiths, etc. Co-operation was in those days a means to lead a
life better. There was a mutual aid and collaboration among different individuals and
society. There is a mention of the co-operative movement in the Rig Veda and also co-
operative bodies managed the temples in South India.
The modern concept of co-operation is altogether different from the primitive one. It
denotes a special method of doing business. It is an off-shoot of the industrial revolution
which is a name given to the series of changes that came about in the method of
production (18th Century) in Europe, especially in Great Britain.
The end of 18th century, gave rise to capitalism. This resulted in concentrating the tools of
production in few hands, which gave them a complete control over the labor class, which
was although very large in number, but was poor and weak.
Dishonesty, capitalization, rising rates and black marketing, was the rule of the day to
maximize profits. The workers were exploited and were becoming poorer day by day.
The Capitalist Class in its greed to make more profits started exploiting the working class
like payment of low wages, increase in working of working hours, insecurity in
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
employment etc. This led to frustration and discontent among the working class. They
therefore looked about for an alternative to save themselves from the grip of inhuman
employers. Few learned people came forward to encourage the labor class and one of
them was Robert Oven. Social reformists like Robert Owen and Dr. William King, gave
a thought to the formulation of a new philosophy. As a result the co-operative movement
began on the world stage.
Although Robert Oven was an industrialist he also lived a laborious life with the rising
exploitation and plight of workers there was a change in Robert Oven’s thinking about
the labor class, and in an attempt to improve the condition he reduced working hours and
rising wages in his factory. He initiated labor colonies and helped them to produce
various things where by they could raise their income.
In an attempt to find out a solution against capitalism, Robert Oven and his friend Charles
Forea wanted to find an alternative to capitalism. They were concentrating on an idea
where instead of co-operation and exploitation a policy of mutual co-operation and
mutual help could be used.
The new organization and the idea was no definite program, even then unity, spontaneous
co-operatives, control by general public and social cause became the main principles of
this alternative arrangement against capitalism. A series of shops started by Robert Oven,
could not really succeed.
2. Rochdale Founders
England the birthplace of many new things was also responsible for presenting the co-
operative movement to the world as an alternative philosophy to trade unionism, for
fighting capitalistic exploitation.
In 1844, a group of 28 weavers met in the Chartist Hall and decided to establish a co-
operative store. The members of this store would purchase the requirements collectively
to economize on their expenditure, for they knew that it would be difficult for them to get
a raise in their wages. They were greatly influenced by the writings of Robert Owen, Dr.
William King and William Thompson.
Thus Robert Oven’s dream of an alternative to capitalism was brought into reality by the
villages of Rochdale, 28 weavers came together and established Rochdale equitable
pioneers society 1844 contributing 1 pound each. Thus gathering a capital of 28 pounds
and registered it under the Friendly Society Act. It was a consumer co-operative. They
hired a place and started a shop and sold items of daily necessities such as candles, tea,
butter, soap etc in bulk and sold them to consumer at reasonable prices. It opened with a
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
legal amount under unfavorable circumstances but slowly made good progress in the
years to come. The membership raised to 74 in 1 year and by 1888 it had 1123 members
with a capital of 3.4lakhs pound and declared 2.5lakh ponds as a profit.
2. To make available houses to its members to improve their living conditions and to
better their status.
The rules and regulation followed on the transaction of the Rochdale stored where:
Open Membership
Cash payment
Educating Members
Religious Neutrality.
The Rochdale Pioneers of England framed the principles based on their experience on a
consumer co-operative store; popularly know as the Rochdale Principles. These
principles have been adopted in almost all countries, which have same or other type of
co-operatives.
Principles
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
1. There should be democratic control
2. All should be welcomed in it
3. Limited interest should be paid on capital
4. All trading should be made in cash
5. No politics should be allowed
6. Co-operation should be kept free from religion
7. There should be no faults in co-operation education
A. Reiffeisen
B. Schulze Societies
Reiffeisen Principles
Herr, F.W. Reiffeisen (1818 – 1888) was an official, holding the position of a mayor in
Germany. He saw the sufferings of the poor and set up a “poor people’s committee” to
make bread for the poor. With a view to promote relief to Agricultural workers in 1862
Reiffeisen started agricultural society in the country based on the principle of “EACH
FOR ALL – ALL FOR EACH”.
The members of this society known as HEDDESDROF CREDIT UNION, were the
needy persons who required were given its services. The Grand Union – Co-operative
Societies was set up in 1877, which is generally know as Reiffeisen Union. This was a
federation of Reiffeisen Societies.
Principles
When Schulze died in 1883, there were 1926 co-operative credit banks of this type in
Germany. Till his death, he tried hard to serve the under-privileged sections of the
societies in Germany.
The main feature of the co-operative movement in Denmark was that there are separate
societies for different type of activities. There are wholesale milk-eggs, exporting, bread
manufacturing, building and productive types of co-operative society. All the societies
have their own organization, which decides on their product price, dealing with the
public, companies, appointment of auditors etc.
1. Formally Denmark was an agricultural country but shifted later to dairy business at
the beginning of 19th and has been a leading producer of dairy products, since then.
2. Dairy business is of prime importance in the export of Denmark. More than 70% of
its products are exported. The farmers and people engaged in dairy business have
formed their local co-operatives. They not only collect milk but also process them and
have an organization at the district and state level.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
3. The working of society is democratically based and the representation of the society
is given according to the milk supplied by them.
4. The members have an agreement for supplying milk for a period of 15-20 yrs and
cash payments are made to the proportion of milk supplied.
2) Democratic administration.
4) Principles of service.
5) Distribution of surplus.
7) Principle of education.
Principles
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
1. Voluntary and opened membership:
The element of compulsion is absent, as stated by the ICA, the membership of a co-
operative society shall be voluntary and available without artificial restrictions or any
means that a person is free to joining as a member and also has a free will, to withdraw
whenever he wants.
members, open to all persons who are able to use their services and willing to accept the
discrimination. It seeks a homogenous interest of the members who come together for a
mutual benefit.
This principle is undergoing changes with time. A little amount of compulsion and
restriction is imposed for the smooth working and speed of the movement. The gates of
membership cannot be kept open for persons with vested interests e.g. Moneylender, as a
influence in the political and economic structure in a country like India. It has been
pointed out rightly that if democracy is to be attained it will come not by voting, not by
taxing nor by a revolution but by putting into operation, the co-operative democracy,
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
The main purpose of a co-operative is to promote and protect the interests of the
members and nobody can protect the interests, of a person than he himself and therefore
According to the ICA co-operative society is a democratic organization and their affairs
The members will enjoy equal rights of voting and participation in the decision making
A general body meeting of the members of the society is the supreme authority in
conducting affairs of society.
The rule of majority and control of board of management in accordance with, the
democratically expressed will, of the members.
The board of management elected through a process agreed by the members and the
board is accountable to the members.
Development of infrastructure
Setting up of reserves
Allied activities relating to the co-operatives
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
The co-op education becomes a prime factor to make a co-operative successful.
According to the ICA – all the co-operative societies are supposed to make provision for
educating their members, officers and employees and lastly the general public. The
principle technique of co-operative is both economic and democratic. There are 3 aspects
of co-operatives.
Since most members are poor and illiterate they are more or less unaware about the
principles and practices of co-operatives. Therefore, for an active participation it is
necessary to evolve a system, which will educate these members and keep in formed
about the decisions and activities of the society.
The office bearers are the elected members of the co-operatives and as they are interested
with the responsibility to conduct the business on co-operative lines, it is necessary for
them to acquire the technical skill and thorough knowledge of co-operatives. Right from
the elementary level to the advanced technique.
To bring in more participation from the general public it is necessary that the people
should have faith and for this it is the responsibility of the office bearers, to keep the
general public involved about the principles, aims, achievements and future plans of the
co-operative movement.
Co-operatives also provide training for their members, elected representatives, managers
and employees so that they contribute effectively to the development process. They also
inform the general public on the nature and benefits of the Co-operatives.
8. Values:
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Co-operatives are based on the values of Self-help, Self-responsibility, Democracy,
Equality and Solidarity. In the tradition of their founders the members believe in the
ethical values of honesty, openness, social responsibility and caring for others.
It is a unique principle where capital is treated as subsidiary where as the prime and
ultimate objective is service to members, the economic outcome arising out of the
operations of a society. The member will be benefited in a manner where it would avoid
one member gaining at the expense of others. Capital is a factor of production and is also
entitled a fair rate of return. In co-operatives capital cannot dominate, rather it serves in
The motive of earning a profit is absent in co-operatives otherwise it will mark the basic
In a joint stock company the surplus is distributed on the number of shares held by an
individual irrespective of their transactions with the company, but in a co-operative the
surplus is distributed on the basis of the number of dealings with the society.
It is not obligatory to pay dividend out of surplus as the members may divert the use of
these funds for overall development of the society and its members. It is not obligatory to
pay dividends out of the members entitled for logically it also means they are obliged to
bear loses if any, Usually any such loses are adjusted from the reserve funds.
As the co-operative enterprise is meant for the economic weak, they come together; form
a co-operative, pool their resources, work together for mutual benefit and the benefit is
shared by all the participants.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Individually a person may not be capable to withstand the market forces and
exploitation, but together they can strengthen their position and pursue their economic
interests.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
The first co-operative legislation in respect to credit was the co-operative credit society
act 1904. The society was then known as Agricultural Co-operative Credit Society, which
engage themselves mainly in the disbursement of credit to their members, following the
Reiffeisen pattern of organization.
1. Short term and medium term: It is basically a 3-tire system with primary credit
society at village level, central co-operative banks at district level and also the state
co-operative banks at the state level. (They are also the APEX banks)2. The long-
term agricultural co-operative structure: is of 2-tires. The primary co-operative land
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
development bank at sub-divisional level and the state co-operative land development
bank at state level.
3. Short term and medium term co-operative credit: It’s a 2-tire system with primary co-
operative credit society at the village level affiliated to the district central co-
operative bank which is also APEX co-operative bank.
Features:
I. Short term credit: Duration is 12-15 months and is provided for meeting the seasonal
agricultural purchase of manure implements seeds etc. The credit is provided at the
beginning of the season and is collected after the harvest is sold. This is known as
crop loan.
II. Medium term: Loans ascending from 15 months to 5 years for purchasing farm
animals, carts and other heavy implements. It is also given for digging wells, land or
consolidation of land holdings.
III. Long Term: Loans granted for a period of more than 5 years to make permanent
improvements of land declaiming waste lands, tube wells, purchase of tractors etc.
Such loans are to be repaid within 20 years maximum. The short and medium term
loans are provided by the agricultural credit societies but co-operative land
development banks provide the long-term loans.
Urban Co-operative Banks
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
The urban co-operative banks are co-operative banks, which are situated in the urban
areas. They play an important role for the benefit of small industrialist, trader, middle
class population etc.
The Role
1. They organize and bring together middle and working class population in urban and
semi-urban areas and inculcate in them the habit of thrift and self-help and acquaint
them with the elements of banking principles.
2. Mobilization of savings and fulfilling the needs of finance for rural, industrial and
other development functions.
3. Providing credit on reasonable terms to protest them from exploitation by the hands
of moneylenders and unscrupulous agency.
4. To make available essential banking facilities to remote areas and to provide
experienced and effective leadership to the co-operative movement.
Dual Statutory Control
The urban co-operative banks are subject to a dual statutory control of:
The Registrar of the co-operative society (state government)
The RBI
Co-operative Banks are governed by the respective state co-operative act and also the
banking regulation act 1949. Matters such as registration of banks, approval of the
amendments of the byelaws, amalgamation and division of banks, explosion of
members, appointment of an administrator, audit, and liquidation etc., fall within the
statutory jurisdiction of the registrar under the provision of the co-operative law.
Matters like issue of banking license, banking transaction and business, supervision,
policy matters fall within the statutory authority of the RBI under the provision of the
Banking regulation act 1949.
G.Meetings
1. General Body Meeting:
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
It is the general meeting of the shareholder after the registration of the co-operative. It is
obligatory on the part of the society to hold its first general meeting within 3 months after
the registration of the society. It is the duty of the chief promoter to convene such a
meeting. If the chief promoter fails to do so it shall be called by any person authorized to
do so by the registrar.
These meetings are held annually to enable the members who are the real owners to
exercise ultimate control over the affairs of the co-operative. In the case of the co-
operative the interval between 2 Annual General Meetings shall not exceed 15months
unless extended by the registrar.
Procedure:
1. The meeting shall be convened by the secretary under intimation to the registrar who
may depute his representative to attend.
2. The meeting shall be presided over by the president or a member who will be elected
to preside in their absence.
3. The secretary shall read out the agenda for the meeting and the items of discussions.
4. Voting can be undertaken for any particular cause, which will be conducted by the
president.
5. If all items in the agenda cannot be finished on the same day, the meeting may be
postponed to a suitable day not exceeding 30 days or as decided by the members
present.
Extra Ordinary General Meeting may be called at any time by the chairman or by a
majority of the committee and has to be called within 1 month. It is called when:
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
a. A requisition in writing of 1/5th of the members of the society or by that number of
the members mentioned in the byelaws.
c. At the instance of the committee of the Federal Society of which the society is a
member.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
1. The board while taking decisions on policy matters should involve the chief
executive.
2. The executive and the board should hold combine meetings for mutual understanding
and respect.
3. The board should consider practical difficulties of the executive.
4. The objective of service to the members should be given prime focus.
5. The Chairman should achieve co-ordination between the professional and the non-
professional group.
6. The executive should not keep the Board Of Directors in dark while implementing
decisions.
Responsibility of the Board Of Directors/Managing Committee
1. It should be cost conscious.
2. All members should be given equal opportunity to discuss and voice their views.
3. Decision taken should be collective and no members must be allowed to jeopardize
the decisions.
4. Decisions taking should be with full consent and proper understanding of the
problem.
5. The Board Of Directors should be responsible towards:
a. Responsibilities towards Employees
b. Responsibilities towards Consumer
c. Responsibilities towards Government
d. Responsibilities towards Shareholder
e. Responsibilities towards Environment
f. Responsibilities towards Society
G.Chairman
The chairman is responsible for the overall management and guidance to the co-
operatives. He performs all such duties and exercises all such powers as may be
confined on him by the respective state co-operative act. His role is most crucial as he
performs the leader of the top management, which is the board of directors.
The powers of the Chairman:
1. To conduct and regulate the proceedings in the meeting.
2. To decide the priority of the speakers.
3. To regulate their speeches.
4. To order and conduct poll.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
5. To exclude certain matters from the minutes if they are irrelevant or detrimental to
the society.
Duties of the Chairman
1. To see that the meeting is duly and properly constituted in accordance with the rules
and regulations
2. To see that the business is conducted in accordance with the agenda unless willing
changed by the members.
3. To maintain order and discipline in the meeting.
4. To act impartially.
5. To accept valid demand for election and make arrangements for it.
6. To declare the meeting closed.
7. To ensure that correct minutes are entered by the secretary in the minute book and to
sign them.
Duties of the Secretary
1. To fix the date and time of the meeting in consultation with the chairman or on
requisition from the director.
2. To prepare the agenda and notices and dispatch them to the directors.
3. Keep all documents and necessary statements available for the meeting.
4. Make necessary arrangements for the conduct of the meeting.
5. To take down the notes of the proceedings and finalize the minutes in the minutes
book.
6. Carry out the orders and instructions of the board.
First, the user-owner principle: Persons who own and finance the co-operatives are
those use it.
Second, the user-control principle: Control of the co-operative is by those who use
the co-operative.
Third, the user-benefits principle: Benefits are distributed to its users on the basis of
their use. The user benefits principle is often stated as business-at-cost
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
1. Distinguish between Co-operative Organization and Joint Stock
Company
1. Definition:
Co-operative Organization – This is an association of persons who have come together
on a voluntary basis to promote their economic interest.
Joint Stock Company – It is an artificial person, recognized by law with a distinctive
name, common seal, common capital, consisting of transferable share, carrying a limited
liability and having a perceptual succession.
2. Basic Objective:
Co-operative Organization – The primary objective of a co-operative society is to
provide basic or essential service to its members. Profit earning is a secondary motive.
Joint Stock Company – Basic objective is to earn profit out of the business, since it is a
purely commercial organization.
3. Minimum Members
Co-operative Organization – A minimum of 10 adults are required to form a co-
operative organization.
Joint Stock Company – For a Pvt. Ltd. Company minimum 2 members are required and
for a Pub. Ltd. Company minimum 7 members are required.
4. Share List
Co-operative Organization – It is always kept open for new members. A person can
become a member of the society by purchasing a share. Co-operative shares are not sold
beyond their face value and hence they are not subject to speculation.
Joint Stock Company – The share list is closed as soon as issued capital is subscribed.
Thus shares of a company are subject to speculation and normally the face value and
market value differ.
5. Voting Rights
Co-operative Organization – They are based on the principle of ‘One Man One Vote’.
Joint Stock Company – They are based on individual holdings. The principle is ‘One
Share One Vote’.
6. Transfer of Shares
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Co-operative Organization – Shares are non-transferable. A member of the society can
withdraw his capital by giving a notice.
Joint Stock Company – A Share holder cannot withdraw his capital during the lifetime
of the company. Shares are freely transferable in the market.
7. Distribution of Surplus
Co-operative Organization – Co-operative provide a certain amount of Interest on
Capital. Surplus is not distributed in proportion to the capital contribution. The return to
the members are called as ‘Bonus’
Joint Stock Company – Distribution of surplus is in the form of dividend depending
upon the holding of the individual.
8. Privileges
Co-operative Organization – The basic objective being service they enjoy lot of
incentives from the Government and also have exemptions from Income Tax,
Registration Fees, Stamp Duty etc.
Joint Stock Company – Since the basic objective is profit they don’t enjoy and
privileges.
9. Area of Operation
Co-operative Organization – Generally co-operatives operate in a limited area such as a
Town, Locality, Tribe etc.
Joint Stock Company – The shareholders are scattered in the various parts of the
country. Thus joint stock companies have a vast area of operation.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Chapter 5: National & International
Level Co-operative Organization
Contents
1. National Co-operative Development Corporation (NCDC)
2. Khadi And Village Industries Commission (KAVIC)
3. National Dairy Development Board (NDDB)
4. National Bank for Agricultural And Rural Development (NABARD)
5. National Co-operative Consumer Federation (NCCF)
6. National Co-operative Housing Federation (NCHF)
7. National Federation Of Industrial Co-operatives (NFIC)
8. International Co-operative Alliance (ICA)
1. National Co-operative Development Corporation (NCDC)
NCDC was set up in 1963, with the purpose of the development of the co-operative
In 1962, the National Development Corporation Act was passed and it began its
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
6. To develop co-operative fields like processing, warehousing, import-export of
marketing activities.
Activities
2. To help in training and development of village artisans and managers involved in this
industry.
The main objective of the board is to replicate the Anand type all over the country. The
World Food Program in 1970 helped the board with financial assistance of Rs120crores.
This fund was for the development of Milk Supply Co-operatives. Finally this program
was named ‘Operation Flood’.
Objectives
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
1. NABARD is an apex institution, which performs the refinance function for the
institution providing investment and production credit for promoting the various
departmental activities in rural areas.
2. It takes measures towards institution building for improving capacity of the credit
delivery system, monetary, formulation of rehabilitation schemes, restructuring of
credit institutions, training of personnel etc. It co-ordinates the rural financing
activities of all the institutions engaged in developmental work at the field level and
maintains liaison with the Government of India, RBI and other national level
institutions concerning with policy formulation.
3. It prepares on annual basis, rural credit plans for all districts in the country.
4. It promotes research in the fields of rural banking, agriculture and rural development.
Mission
Promoting sustainable and equitable agriculture and rural development through
effective credit support, related services, institution building and other innovative
initiatives.
Functions
1. To develop policy and plans with respect to matters relating to agriculture and
allied activities.
2. To undertake developmental activities in the rural areas.
3. To undertake programs for training, consultancy, research in respect to credit of
agriculture and rural development.
4. To provide refinance facilities to the RRB (Regional Rural Bank) and various co-
operatives.
5. Inspection of Banks.
6. Coordination.
5. National Co-operative Consumer Federation (NCCF)
The National Co-operative Consumer Federation is the highest body of consumer co-
operative in India. It was formed in the year 1966.Its headquarters are located in
Delhi with branches in various cities such as Mumbai, Chennai, Kolkatta, Nagpur etc.
Chief Function
1. To help and guide state federations in their operations.
2. To act as the chief spokesman of consumer co-operative in India.
3. To procure and distribute consumer products such as:
a. Pulses, spices, food grains, tea and other agricultural goods.
b. Controlled cloth.
c. Non-controlled textiles and readymade garments.
d. Imported and confesticated goods.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
The federation maintains a consultancy and promotional cell, which is entrusted with
the responsibility of farming operational and business procedures, administrative
norms etc. It also publishes a monthly news bulletin, which contains information on
the market rates of goods supplied by the consumer co-operatives.
Objectives
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
In 1946, the ICA was one of the 1st Non-governmental organisations to be accorded UN’s
Consultative Status. Today it is one of the 41 holding-holding category of consultative
status with the UN’s economic and social council.
Aims of ICA
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Chapter 6: Role of State Government
Contents - Role of State Government - Registrar
Co-operative Department
1. Co-operative Education and Training: The department helps in the training and
development of members. The various co-operative schools and colleges have been
started in Maharashtra. Eg. Pune, Nagpur, Satara etc.
b. To take underwriting
4. Administration Expenditure: The co-operative department has the power to frame the
rules and according to the various laws to help the co-operatives function efficiently.
The department issues circulars, directions from time to time to guide the co-
operative.
2. Registrar
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
The Registrar occupies crucial position in the co-operative system. He is the
facilitator in the implementation of the declared policy of the state-government
towards rural development through the co-operative sector. He is the most important
media through which a democratic government fulfills the social and economic
aspirations of the people. He has also to co-ordinate between the government and the
non-official leadership. He has also to maintain administration realism and thus give
correct advise to the popular government.
The Registrar of the co-operative society executes the co-operative law.
The powers in regard to Formation/Registration, to widening up of co-operatives
remain with the Registrar, while the financial help and other assistance is done by the
co-operative department.
The Registrar is assisted by the Assistant Registrar, District Registrar and other
officers appointed by the Co-operative Department.
The powers and functions of the Registrar are prescribed by the respected Co-
operative Acts. The Government can also delegate some additional powers to the
registrar for promoting co-operative movements.
Functions of the Registrar can be divided into:
1. Statutory Functions: The statutory functions of the registrar are to carry out duties
entrusted on him by the Maharashtra Co-operative Acts 1960. These are registration,
amendment of byelaws, audit of Accounts, execution of awards, liquidation process
etc. In certain conditions the registrar has the authority to suspend the management of
the society for its malpractices in accounts. He also has to see the day-to-day affairs
of the society are carried out without hindrances. He is also responsible for the
settlement of disputes between and within societies.
2. Development and Promotional Functions: The co-operative movement has to play
an important role in the social and economic development of India. The registrar
being a facilitator and coordinator of the developmental process, he has to do various
functions as a friend, guide and philosopher in relation to co-operative society.
Criticisms on the Role of the Registrar
The Registrar is being criticized that instead of being a friend, philosopher and guide
of societies he has become the inspector general of co-operative police carrying out
functions like imposition of penalties, suspension and filling legal charges against
societies.
Excessive control of Registrar has lead to ill effects like corruption, rivalry between
societies, high handedness, beaureacratic delays and red-tapism.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Chapter7: Professionalisation of
Management
Management Techniques
Process Functions
1. Planning 1. Finance (proper auditing procedure, activity based
costing, proper formulation of balance sheet)
3. Organizing the group and explaining to them the objectives and goals of the venture.
5. Giving direction to the movement and coordinating and controlling the activities.
6. Explaining a vision to the people and showing uttermost commitment and faith
towards it.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Dr. Vasant Rao Dada Patil – Vasant Rao Dada Co-operative Sugar Factory, Sanghli
(largest sugar factory in Asia).
Examples
4. Dr. Patangrao Kadam – Founder of Bharti Vidya Peeth, a dean university, Minister at
State Cabinet, controls education lobby.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Chapter 8: Various types of Co-
operatives
Contents
1. Agriculture Credit Co-operative
2. Consumer Co-operative
3. Consumer Retail Society
4. Dairy Co-operative
5. Sugar Co-operative
6. Housing Co-operative
7. Industrial Co-operative
8. Other Co-operatives
1. Short term and medium term: It is basically a 3-tire system with primary credit
society at village level, central co-operative banks at district level and also the state
co-operative banks at the state level. (They are also the APEX banks)
3. Short term and medium term co-operative credit: It’s a 2-tire system with primary co-
operative credit society at the village level affiliated to the district central co-
operative bank which is also APEX co-operative bank.
Features:
2. Members must know each other personally and admit no new member whom they
don’t trust.
3. The local members on voluntary basis carry out administration of the society.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
4. Liability of members is unlimited.
2. Consumer Co-operative
Consumer Co-operative has its origin in the co-operative society formed by the 28
weavers in England in 1844. The movement gradually developed in European
countries and became remarkably successful in Sweden, Denmark, Britain and
Finland.
In Maharashtra the consumer movement began after the First World War mostly in
urban areas.
Objectives
1. To encourage the habit of thrift, self-help and co-operation amongst the members of
the society.
2. To raise funds by the way of share capital, deposits, loans, donations and entrance
fees.
3. To procure and produce by self or in partnership, consumer goods of daily use and
undertake retailing of such goods among the members and other consumers.
4. To provide to the members such services as they may require as consumers.
5. To undertake processing of consumers goods and its distribution amongst its
members and other consumers.
6. To try to improve the quality of goods produced by the society and to construct or
purchase or obtain on hire godowns required for storing of goods.
7. To take effective measures to ensure price stabilization and supply of goods to the
consumers at reasonable prices.
8. To undertake distribution or sale of essential commodities under the authority given
by the state government or the local authority.
National Co-operative Consumer Federation (NCCF)
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
The National Co-operative Consumer Federation is the highest body of consumer co-
operative in India. It was formed in the year 1966.Its headquarters are located in
Delhi with branches in various cities such as Mumbai, Chennai, Kolkatta, Nagpur etc.
Chief Function
1. To help and guide state federations in their operations.
2. To act as the chief spokesman of consumer co-operative in India.
3. To procure and distribute consumer products such as:
a. Pulses, spices, food grains, tea and other agricultural goods.
b. Controlled cloth.
c. Non-controlled textiles and readymade garments.
d. Imported and confesticated goods.
The federation maintains a consultancy and promotional cell, which is entrusted with
the responsibility of farming operational and business procedures, administrative
norms etc. It also publishes a monthly news bulletin, which contains information on
the market rates of goods supplied by the consumer co-operatives.
Problems
1. The consumer co-operative movement in India is government sponsored and
initiated.
2. Consumers in India are indifferent to their own needs and still believe in the private
trade system.
3. Consumer co-operatives are not well integrated and are scattered isolated.
4. The procurement and purchase operations are technically faulty.
5. They also face problems of low efficiency and low level of quality of products.
6. There is also intense competition from the private traders who create various
problems for the consumer movement.
Different Types
1. Primary Co-operative Society (Tolani College Co-operative)
2. Departmental Stores or Super Bazaars (Upna Bazaar, Sarkari Bhandar)
3. Central/Whole Sale Consumer Co-operative Stores
4. State Federations of Consumer Co-operative
5. National Co-operative Consumer Federation (NCCF Apex)
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Consumer co-operatives (also known as retail societies) are trading organisations owned
by their consumer members who are able to participate in the democratic structures of
those organisations. Consumer co-operatives include the Co-operative stores.
The consumer retail co-operatives have become very important and have the backing of
the general public. These societies are financially sound and are progressing day by day.
They basically supply food grains, cloth, home appliances etc. Some go beyond that and
provide services like hair cutting, shoe repair etc. By the year 1977 there were 1,55,000,
workers with a membership of more than 1.5 million and had a turnover of 2,713 million
pounds. In 1963 North of England co-operative wholesale agency and depositor society
was established with an objective that these consumer stores should help each other on
purchasing the goods required by them. The representatives of all the consumer stores
come together to form this society. The member of this society was open to all the society
only with a democratic management and board of directors elected by the member
society. The Board Of Directors was 30 in numbers with one ex-official and has tenure of
3 years. This society also manufactures goods and has its own subsidiary bank.
6. Co-operative stores used to Earmark part of the profits in reserve funds in case of
financial crisis.
7. An able and efficient management was also one of the reasons for its success.
The co-operative society entered late in the agricultural sector. In 1867 the farmers
established agriculture and horticulture society to purchase seeds, manure and other
essentials for agriculture. The societies used to inspect the aids and then were given to the
farmers, with the rising numbers. The society then started to manufacture eatables, began
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
selling machinery for farming, petrochemicals and things required for veterinary
purposes.
Some society under took the job of selling farm products, wood, animal etc, on behalf of
the farmers. By 1977, the numbers of agriculture society was 500, Membership 3,32,000
and turnover of 1121 million pounds.
Functions
1. They arrange for collection center and also provide the distribution network.
2. They distribute cattle feed to the milk producers and also provide veterinary services.
4. Research and Development activity are carried out by the society to improve the
productivity rate.
Objectives
3. To arrange for the sale of milk and also to pay milk producers in coordination with
various unions and federations.
4. To prepare and undertake necessary projects for dairy development in the area.
Historical Perspective
India today is the largest producer of milk in the world. This success is due to the “White
Revolution” which was aimed to increase the milk production. NDDB spearheaded
operations flood under the leadership of Dr. Vergese Kurien. He has developed the world
famous Amul Brand which has proved one of the most successful milk co-operatives.
Due to the success of operation flood, 1st government of India introduced operation flood
and 2nd to undertake the activities such as:
5. Sugar Co-operative
Indian Sugar Co-operative can be broadly classified into 2 sub sectors:
Out of the 453 sugar mills in the country, 252 are in the co-operative sector, 134 are in the
private sector and 67 are in the public sector. The government of India has appointed for
tariff board to examine the position of the sugar industry, due to this board the Indian
Legislation passed the sugar industry protection act in 1932.
Sugar is controlled commodity in India. It is covered under the preview of the essential
commodities act 1955. The government control sugar capacity editions through
individual licensing, determines the price of the major input which is sugarcane, decides
the quantity that can be sold in open market, fixes the prices of sugar etc. Government
control is over all aspect of production and sale of sugar extends to the level of
wholesalers need to obtain a license issued by the government before they can begin to
operate.
Problems
1. De-zoning: The co-operative sugar industry was so far protected from competition
from other sugar factories. Due to the policy of zoning which were compulsory for a
farmer to sell and supply sugarcane to the prescribed factory within the zone of its
field. This policy was dismantled in 1996-97 due to which the factories, which could
not give better price to the farmers had to close down.
2. Shortage of Sugarcane: Many sugar factories are located in the main shadow region
due to which there is a lack in sugarcane produced which leads to un-utilization of
processing capacity.
3. High cost of water and electricity: The high cost of water and electricity increases the
cost of production.
4. Huge financial loses: Due to improper irrigation facility, scanty or no rainfall result in
huge financial loses. Also there are high loses due to improper storage facilities.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
5. Corruption: Corruption is one of the major problems, which is faced by the co-
operatives. The main concept of “Self help through Mutual help” is lost in corruption.
6. Political influence and interference: There is too much of political influence and
interference in the co-operative society.
7. Problems of Trade Union: The trade unions come up with strikes and lockouts, which
result in poor functioning of the co-operatives.
6. Housing Co-operative
Food, clothing and shelter are the prime necessity of human beings. Housing is a
significant concern of every individual. There is an acute problem or shortage of
housing in India due to the following reasons:
1. Tremendous growth in population.
2. Migration of people from rural areas to urban areas.
3. Discontinuance of joint family system leading to requirement of separate house to
each family unit.
4. Highly speculative trend in cost of land.
5. Hike in prices of building material resulting in increase in cost of house everyday.
Co-operative housing is a solution to the above given problems because it is a well-
organized significant movement of the common men.
Features
1. They are legally established associations of persons or members.
2. The members democratically control them.
3. Co-operatives societies provide for minimum required facilities like drinking water,
tank water, waste disposal, sanitation, electricity, common car parking etc.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
2. Raising of funds by way of entrance fees, share capital, loan, donations, deposits
from member and contribution from the members for construction.
3. Membership (Eligibility Criteria, Minimum number of shares to be purchased,
Maximum number of shares which an individual can purchase, rights of members
etc.)
4. Share Capital (Denominations of shares, transfer of shares, refund of share capital
etc.)
5. Management
a. General Body Meetings
b. Managing Committee
6. Maintenance of record as per co-operative act.
7. Proper appropriation and distribution of profits.
1. Admission of members.
2. Transfer of shares.
7. Appointment of sub-committees.
It is a federal society and all types of co-operative housing society are eligible for its
membership. They are affiliated to the federation and it is compulsory for primary co-
operative housing society to become members of the district federations.
Objectives
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
1. To give legal and technical guidance to the member society.
3. To help the co-operative housing society in getting approval of plans from Town
planning department and completion certificate from municipal authority.
1. To guide the primary housing co-operative society in the state regarding legal,
technical and management problems.
2. To help the housing societies in getting better building material at reasonable rates.
The National Co-operative Housing Federation (NCHF) was formed in the year 1969 as
per the recommendations of a study group on co-operative housing. The state level and
district level housing societies as well as the state level institution financing the housing
societies can become a member of the National Co-operative Housing Federation
(NCHF).
Objectives
2. To undertake research and development work for reduction in the construction cost.
4. To involve institution like LIC and other central level financing institution in the co-
operative housing movement.
In Maharashtra the following institutions are active in helping the co-operative housing
societies:
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
1. Maharashtra Housing Finance Co-operative Society.
7. Industrial Co-operative
An industrial co-operative is an organization of workers and craftsmen engaged in the
cottage/village industries or other small-scale industries to undertake production,
purchase of supplies and raw materials, marketing of products and supply other services
to the members.
1. Social Aim: Social Aim is to safeguard workers interest and to protect them from
exploitation by the capitalist and the traders. Thus the social aim is to render services
to the members as well as the society.
2. Economic Aim: The second aim is Economical, which focuses mainly on creation of
employment. There is lot of disguised unemployment and many layoff stages for the
worker in a year. This spare time can be made productive due to the industrial co-
operatives.
Objectives
2. To purchase and supply raw materials, tools and equipments needed by the workers.
4. To purchase machinery and other equipments required by members and to hire them
to the members for quality production.
6. To construct take on rents godowns for storage of finished products and raw
materials.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
7. To undertake all such activities needed for the welfare and well being of the member
and the society.
1. Workers co-operatives
2. Palm and gur society
3. Handicraft society
4. Leather co-operative
5. Other industrial co-operative
Organization Structure
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
NFIC
NFIC was established in the year 1966 with the objective of studying industrial co-
operatives in relation to the problems they face and to suggest solutions. The NFIC also
plays a major role in formulating and implementing programs relating to the development
of industrial co-operatives. It also undertakes import, purchase and distribution of raw
materials, equipments and components to the industrial co-operatives. It also helps in
rendering marketing services to the members. The head quarters of NFIC is situated in
New Delhi.
1. Problem of Human Resource: Most industrial co-operatives are situated in rural areas
and also are scattered all over the country. They are financially weak and thus it is not
possible for them to appoint trained personnel to look after the management, thus they
have to manage with unskilled and inefficient staff, which leads to detoriation in
quality.
2. Problem of Finance
3. Problem of production
4. Problem of Marketing
7. Vested interest
2. Industrial service co-operative society: In this type the production activities such as
providing raw materials, handling of tools and equipments, technical guidance are
done by the members. In certain societies even the marketing of products are done by
the members.
8. Other Co-operatives
Workers co-operatives
These are businesses that are owned exclusively by the employees. Some are set up as
new ventures, some are conversions from existing businesses, and others are viable
replacements for failed companies.
Community co-operatives
Social responsibility and concern for the community are fundamental co-operative
values. Many organisations that provide care for elderly, ill or disabled people, child care
or other beneficial local services choose a co-operative structure that allows employees,
clients and community representatives to become members.
Secondary co-operatives
Often groups of self-employed people or businesses can benefit from sharing facilities,
equipment or marketing costs. A co-operative provides the ideal legal framework for
this. Example of secondary co-operatives includes taxi drivers.
Credit unions
These are financial co-operatives that are directly owned and controlled by their
members, who are the savers and borrowers. Most credit unions have a community
common bond, which means that they serve a specific geographic area. Some credit
unions are based at the member’s place of work and therefore have a workplace common
bond.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
1. Problems
Inspite of a historical record of co-op movement, still we are facing problems which has
hampered the development.
2. Political Influence: The political influence and pressure on officials in day to day
function granting of loans to undeserving people, corruption amongst officials is
sickening the co-operatives. The political interference and administrative high
handedness has been the root cause for loosing the purpose. Further growing vested
interests, ineffective federal structure and reliance on government shows the
dependency which is coupled with the processing handled by several departments,
lack of co-ordination and export guidance have together arrested and influence co-
operatives.
6. Small size: The primary agricultural co-operatives have been very small with a
limited area of operation but the liability has been unlimited. Also the honorary
workers were expected to work much more which adversely affected the successful
working of co-operatives.
8. Conflict within societies: Intra society conflicts have also been a serious retarding
factor. Under these circumstances a society will either not do much work or
favoritism and hypnotism would play the role in controlling the funds and in the
process restricting the funds to few favored members.
10. Unproductive loans: Large loans have been given for unproductive purposes and
that too the people who have concealed or hidden their own debts. The management
has also been reluctant to take action against the defaulters.
11. Window Dressing: To show a lesser figure of the overdue often the accounts are
manipulated and made up which is possible due to a defective audit. Loans are shown
to have been paid and new loans are issued thus claiming a good rate of recovery.
Defective audit, inspection, embezzlement of funds and dishonest management are
common problems.
12. Lack of funds: The main problem of the co-operatives is lack of funds. This is
because the members do not save or deposit enough of their savings to contribute to
the working capital of the organisation. Besides, there is also lack of response from
general public. Hence, most co-operatives organisations fail to attract the desired
deposits.
15. Illiteracy: In India, people have been highly illiterate, ignorant and extremely
conservative towards co-operative organisations. This is because people fail to
understand the real meaning and objectives of co-operation.
16. Dual Control: Let's take an example to explain this point. The Registrar, who is a
representative of the state government and also the Reserve Bank of India, controls
co-operative banks. Similarly all other co-operatives have dual control. There is no
one fixed line of hierarchy. This is a problem because if one employee has two
bosses, he has twice the problems.
18. Traditional society: This is another problem for co-operatives. This is because most
of the villages or small towns where co-operatives operate have members who are
very traditional and conservative. Even in the competitive scene in India, it is
becoming more and more difficult for co-operative to function efficiently on the basis
of traditional type of management.
19. Over-riding powers to Registrars: This is again a very serious problem for co-
operatives. The registrar being a representative of the State Government has been
given a lot of powers. Due to rising corruption, these powers are misused to a large
extent, thus posing a problem.
3. Unemployment
4. Poverty
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
5. Lack of Infrastructure
8. Casteism
9. Religion fundamentalism
11. Regionalism
14. Corruption
2. Remedies
1. Strengthening of human resources: The deficiencies and limitation in the
recruitment and training should be removed. Competent persons and individuals with
a capacity and unquestioned integrity should be posted on the various responsible
positions.
3. Improved recovery: It is necessary that the loans and credit facilities should reach
the poor farmers and those who have taken the undue advantage should be made to
repay it, at the same time it should also be avoided to write-off loans unless
absolutely necessary and justified.
4. Developing a sense of solidarity: It is the most essential aspect necessary for the
growth of co-operatives. If there is no solidarity among the members it will definitely
affect the functioning and prosperity of the co-operatives but might also face
unforeseen adversities.
5. Public Contribution and participation: It is very much necessary that the co-
operatives should become self-funding rather than on government finances and
subsidies. It should have more of public contribution and participation.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
6. Effective leadership: The co-operatives being a people’s movement must ensure that
the officers and the leaders should have and must acquire necessary training to run the
co-op movement more effectively as these members will be the ones who will be able
to do justice towards the cause than any outsider.
9. Marketing and processing: After supplying credit and producing goods the co-
operative movement has often faced failure because of inadequate and improper
processing and marketing infrastructure and therefore this also needs to be developed.
10. Professionalism: The solution for lack of professionalism could be that the co-
operative organisation must adjust by adopting new management techniques to meet
the demands.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Chapter 10: Problems of Democratic
Control & Corrective Measures
Contents
5. National plan misses co-operatives: It has been a tragedy except the 9th 5 year plan
the Indian planning system has not given enough weightage to co-operatives. Co-
operation also does not find a place in the industrial and commercial policy of the
government.
6. No ministerial status: Co-operation has to be included in the state subject list and
therefore every state government has a ministry of co-operatives with a separate
minister incharge. But at the national level there is no independent ministry for co-
operation. It is just one part of the 24 divisions in the agriculture ministry. Thus it
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
appears that co-operation has been given a ‘step-motherly’ treatment by the union
government.
2. Corrective Measures
1. Co-operatives being commercial ventures must enforce financial discipline. The
Registrar must serve the co-operatives efficiently through the statutory obligations
such as auditing of accounts etc. There has to be improvement in audit procedures by
following a professional audit approach.
3. Co-operative should be given autonomy to carry out their day-to-day activities by the
government.
6. There has to be amendments carried out in the Indian Companies Act to make the co-
operatives for competitive in the liberalized era. E.g. Companies Act 1956 is being
amended to allow multi-state co-operatives like IFFCO, NDDB to voluntarily convert
themselves into co-operatives companies or producer companies (Economic Times
June26 2000)
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
7. Minimum state interference could help the co-operatives to function on professional
guidelines.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Chapter 11: Positive Points of Co-
operatives
1. Economic development
With a very vast section of the community taking out life at subsistence level, co-
operation has helped in expediting the process of economic development through
inducement of human resources available in nonofficial way.
Though they are economic in character, but they have moral, ethical, social, cultural and
political motivations as well.
2. Equality - democracy
Equal rights and opportunities for people to participate in a democratic way, which
improves the use of the society’s resources and foster mutuality, understanding and
solidarity.
3. Liberty - voluntaries
Activities in the society are voluntary, and this is the best way to promote people’s
participation, commitment and responsibility
People have the will and the capability to improve living conditions according to the
peaceful ‘step-by-step’ way, by means of consciousness-raising activities and of joint
action for co-operative power.
The economic organizations of the community are developed with the aim of serving the
needs of the people.
6. Social responsibility
Economic and other organizations are characterized by responsibility for the community
as a whole.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
7. Price Reduction
Relief to some extent could be provided to the customers by allowing price reduction.
8. Provide employment
9. Provide relief
Provides relief to some extent to certain weaker sections of the society such as orphan’s
etc.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Conclusion
Let us hope that co-operatives will be able to overcome their problems with these
positive points, and can thus be described as a tool, which can make available to the
society in which it operates economic and technical knowledge and can succeed in
evolving a progressive and egalitarian society.
To conclude, what can be better than the words of our very first Prime Minister,
Pandit Jawaharial Nehru, he once said:
"The idea of co-operation is something much more than merely an efficient economic
way of doing things. It is economic, it is fair, it equalizes and prevents the disparities
from growing. But it is something even deeper than that. It is really a way of life and a
way of life which is certainly not a capitalist way of life and which is not a hundred
percent socialist, though it is much nearer socialism than capitalism. Anyhow, it is a way
of life."
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Section II
1. Co-operative Marketing
2. India's White Revolution
3. Dr. Verghese Kurien
4. Amul Saga
5. Article I
1.Co-operative Marketing
The Co-operative Development Corporation
The National Co-operative Development Corporation has been promoting and financing a
wide range of economic activities in rural areas through co-operatives. The Co-operation
is a unique institution in the country catering to the development of the rural economy
and agriculture sector through co-operative. There is no other institution in the country,
which is exclusively for meeting the requirement of co-operatives.
NCDC has been playing special attention to weaker sections co-operatives in various part
of the country. The promotional and development role of NCDC had lead to continuous
diversification and expansion of co-operative programs under its preview.
When producers of agricultural commodities or any other product form a society with an
objective of carrying out marketing of their produce, such society is called as co-
operative marketing society. The need for co-operative marketing arose due to many
defects observed and experienced in the private and open marketing system. Those are
2. There exists a chain of intermediaries between the producer and the final consumer.
They include village merchant, itinerant trader, wholesaler, commission agent, pre-
harvest contractor and retailer. They take their own margins for the services, they
render. But these margins are generally ex-orbitant, making the commodities costly
for the consumers and reducing the producer's share in the consumer's price. A co-
operative marketing society can eliminate some or all of the intermediaries and can
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
reach to the consumers and establish direct trade relations with them. This will make
commodities cheaper to the consumers and also ensure good quality of produce to
them because much of the handling is avoided.
3. There are some services such as transport, storage, financing, grading, packing,
loading/unloading, which are carried out by some private functionaries who charge
high rates for these services. A co-operative marketing society performs these services
efficiently and at cheaper rates.
ORGANISATION:
Membership:
Resources:
1. Share capital
2. Deposits.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
5. Reserve funds.
Functions:
1. To arrange for the sale of members produce to the best possible advantage.
3. To provide storage facilitates to their members by renting or owning the godowns and
thereby facilitate to grant advances against pledge of produce.
4. To protect members from all types of malpractices eliminates the middleman in the
chain of marketing.
5. Co-operative marketing society ensures grading, etc. and supply of good quality
material to consumers.
6. It teaches business methods to farmers and serves them as agency for supply market
information.
7. The society is able to stabilize prices over a long period by adjusting the supply with
the demand.
8. Marketing societies are also encouraged to undertake export trade so that they can
give better prices to their members.
Although, many advantages are envisaged in the co-operative marketing the structure has
remained relatively weak as compared to credit co-operatives. There are only about 1000
marketing societies as against 20,000 credit societies in Maharashtra. The marketing is
more difficult involving many technical and commercial aspects. Marketing of perishable
is still more different. Arranging quick transport, arranging storage to avoid losses, to
keep watch on demand - supply position to ensure good prices to members are all matters
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
need for good marketing. For want of these managerial aspects, desired number of co-
operative marketing societies have not come up and those which were started could not
succeed. Several marketing surveys/studies at farmer's levels have revealed that among
several marketing channels, co-operative channel has offered greater share of consumer's
prices to the producers. Whichever, marketing is unorganized, farmer - producers have
expressed that marketing co-operative societies should be formed.This was particularly
reported in the cases of marketing of perishables.
Few Successes:
In the immediate future, the project aims at trebling Sri Lanka's milk production from
30,000 litres per day to 10,000 litres per day production capability. Besides setting up
milk co-operative societies throughout the island nation by adopting "Operation Flood"
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
strategy, the joint venture also aims at improving the genetic quality of the milk animals
as the milk yield in Sri Lanka is five litres per day per animal as compared with 30 litres
per day yield in India.
At present, there are 300,000 dairy formers in Sri Lanka and the aim is to increase the
number to one million in a phased manner. On another front, the project seeks to provide
an assured market to milk producers at remunerative prices which is expected to increase
milk production.
It is a tribute to the excellence India has achieved in all aspects of dairy production that
the European Dairy Association (EDA) has expressed its readiness to explore ways and
means to collaborate with NDDB to expand the dairy sector in Asia. It has not been lost
on the international dairy community that India, today, is the most energy and coal
efficient producer of high quality milk in the world. As the latest Annual Report of
NDDB notes, the most significant contribution of the Anand pattern is that India has
achieved a substantial advantage in most dairy commodities
Dr. Verghese Kurien is called the "father of the white revolution" in India. He is credited
with architecting Operation Flood -- the largest dairy development program in the world.
Verghese Kurien, set up the Anand model of co-operative dairy development, engineered
the White Revolution in India, and made India the largest milk producer in the world.
Born on 26th November 1921, Dr.Kurien graduated with Physics from Loyola College,
Madras in 1940 and then did B.E.(Mech) from the Madras University. After passing out
of the University, he joined the Tata Steel Technical Institute, Jamshedpur from where he
graduated in 1946.
Around the same time, the infant co-operative dairy, Kaira District Co-operative Milk
Producers' Union Limited (KDCMPUL), -- now famous as AMUL -- was fighting a battle
with the Polson Dairy, which was privately owned. Young Kurien, fed up with being at
the government creamery, which held no challenge, volunteered to help Shri
Tribhuvandas Patel, the Chairman of KDCMPUL, to set up a processing plant. This
marked the birth of AMUL and the rest is history.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Tribhuvandas Patel was assigned by Sardar Vallabhbhai Patel the task of "making the
Kaira farmers happy and organize them into a co-operative unit".
Dr. Kurien has since then built this organization into one of the largest and most
successful institutions in India. The Amul pattern of co-operatives had been so
successful that Dr. Kurien setup NDDB (National Dairy Development Board) to
replicate it across India.
Dr. Kurien wanted to leave Amul in 1949 but Shri Tribhuvandas Patel influenced him
to stay back.
For his contribution to the dairy industry Dr. Kurien has received top awards not only
in India but also overseas.
a. Padmashri (1965)
b. Padmabhushan (1966)
c. Krishi Ratna Award (1986) by the President of India.
d. Ramon Magsaysay Award for Community Leadership (1963)
e. Wateler Peace Prize Award of Carnegie Foundation (1986)
f. World Food Prize Award (1989)
g. International Person of the Year(1993) by the World Dairy Expo, Madison,
Wisconsin, USA.
h. Padma Vibhushan (1999)
Dairy in India
India has the largest cattle population in the world.
India has overtaken the US and is the largest producer of milk in the world.
The first Amul co-operative was the result of a farmers' meeting in Samarkha (Kaira
district, Gujarat) on 4th January 1946, called by Morarji Desai under the advice of Sardar
Vallabhbhai Patel, to fight rapacious milk contractors. It was Sardar's vision to organize
farmers, to have them gain control over production, procurement and marketing by
entrusting the task of managing these to qualified professionals, thereby eliminating the
middle men, the bane in farmers' prosperity
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
THE success of the Amul brand name has, no doubt, resulted in my being asked to
comment on its history and the reasons for its success. I have, therefore, reflected on the
long history of the brand to see if I could distil reasons why Amul is a name widely
recognized and respected, not just in our cities and towns, but in our villages as well.
Probably the easy, but nonetheless wrong, answer is that Amul has been advertised well.
Certainly it has helped that those responsible for keeping the Amul name in the public
eye have used considerable imagination and, if I do say so, ‘The taste of India’ is nothing
short of brilliant. However, there is much more to it.
If Amul has become a successful brand – if, in the trade lingo, it enjoys brand equity –
then it is because we have honoured our contract with consumers for close to fifty years.
If we had failed to do so, then Amul would have been consigned to the dustbin of history,
along with thousands of other brands.
The tough part of the use of a brand as a contract is that every day is a renewal; if, just
once, the brand fails to meet the customer’s expectations or, more exactly, if it fails to
delight the customer, then the contract loses its value. If Amul’s sales continue to rise, it
is because that contract has been honoured, again and again. I would like to think that the
granddaughters of some of our first customers are now ‘contracting’ with us to buy their
butter, cheese, baby food, chocolates and other fine Amul products. It is also a fact that
when we first thought of exporting to West Asia and even to the United States, it was
because of the loyalty of Amul customers who, even when far from home, still craved our
‘taste of India’.
What goes into the ‘contract’ that is a brand name? First is quality. No brand survives
long if its quality does not equal or exceed what the buyer expects. There simply can be
no compromise. That’s the essence of the contract. In the case of a food product, this
means that the brand must always represent the highest hygienic, bacteriological and
organoleptic standards. It must taste good, and it must be good.
Second, the contract requires value for money. If our customer buys an Amul product, she
gets what she pays for, and more. We have always taken pride in the fact that while we
earn a good income for our owners – the dairy farmers of Gujarat – we don’t do it at the
cost of exploiting the consumer. Even when adverse conditions have reduced supplies of
products like butter, we have resisted the common practice of raising prices, charging
what the market would bear. Rather, we have kept prices fair and done our best to ensure
that retailers do not gain at the consumers’ expense.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
The third element of the contract is availability. A brand should be available when and
where the customer wants it. There is no benefit achieved in creating a positive brand
image, and then being unable to supply the customer who wants to buy it. In our case,
over the years we have built what is probably the nation’s finest distribution network. We
reach hundreds of cities and towns through a cold chain that not only ensures that our
products are available, but they reach the customer at the farthest end of the country with
the same quality as you would find in Ahmedabad or Vadodara.
The fourth part of the contract is service. We have a commitment to total quality. But,
occasionally, we may make a mistake – or, our customer may think we’ve made a
mistake, and the customer, as they say, is always right. That is why, for Amul, every
customer complaint must be heard – not just listened to. And, every customer complaint
must be rectified to the extent humanly possible.
For close to fifty years now, Amul has honoured its contract with the consumer. The
contract that is symbolised by the Amul brand means quality. It means value for money. It
means availability. And it means service.
How did the Amul brand become what it is? To answer that, we must journey back in
time, to the history books, to the time of India’s independence because Amul’s birth is
indelibly linked to the freedom movement in India. It was Sardar Vallabhbhai Patel who
said that if the farmers of India are to get economic freedom then they must get out of the
clutches of the ‘middlemen’.
The first Amul co-operative was the result of a farmers’ meeting in Samarkha (Kaira
district, Gujarat) on 4 January 1946, called by Morarji Desai under the advice from
Sardar Vallabhbhai Patel, to fight rapacious milk contractors. It was Sardar’s vision to
organize farmers, to have them gain control over production, procurement and marketing
by entrusting the task of managing these to qualified professionals, thereby eliminating
the middle men, the bane in farmers’ prosperity.
The decision was taken that day in January 1946: Milk producers’ co-operatives in
villages, federated into a district union, should alone handle the sale of milk from Kaira
to the government-run Bombay Milk Scheme. This was the origin of the Anand pattern of
co-operatives. The colonial government refused to deal with the co-operative. The
farmers called a milk strike. After fifteen days the government capitulated. This was the
beginning of Kaira District Co-operative Milk Producers’ Union Ltd., Anand, registered
on 14 December 1946.
Originally the Anand pattern included dairy co-operative societies at the village level, and
a processing unit called a ‘union’ at the district level. Inspired by the Kaira Union, similar
milk unions came up in other districts too. In 1973, in order to market their products more
effectively and economically, they formed the Gujarat Co-operative Milk Marketing
Federation Limited (GCMMF Ltd.). GCMMF became the sole marketer of the original
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
range of Amul products including milk powder and butter. That range has since grown to
include ice cream, ghee, cheese, chocolates, shrikhand, paneer, and so on. These products
have made Amul a leading food brand in India.
The brand name AMUL, from the Sanskrit Amoolya, meaning priceless, was suggested
by a quality control expert in Anand. The first products with the Amul brand name were
launched in 1955. Since then, they have been in use in millions of homes in all parts of
India, and beyond. Today Amul is a symbol of many things: Of high quality products sold
at reasonable prices, of availability, of service.
There is something more, though, that makes the Amul brand special and that something
is the reason for our commitment to quality and value for money. Amul is the brand name
of 2 million farmers, members of 10,000 village dairy co-operative societies throughout
Gujarat. This is the heart of Amul, it is what gives strength to Amul, and it is what is so
special about the Amul saga.
In the early days of Kaira Union there was no dearth of cynics. Could ‘natives’ handle
sophisticated dairy equipment? Could western-style milk products be processed from
buffalo milk? Could a humble farmers’ co-operative market butter and cheese to
sophisticated urban consumers? The Amul team – farmers and professionals –
confounded the cynics by processing a variety of high-grade dairy products, several of
them for the first time from buffalo milk, and marketing them nationally against tough
competition.
What began way back in 1946 was really an effort to carve out a truly Indian company
that would have the involvement of millions of Indians and place direct control in the
hands of the farmers. It was a mandate for producing, owning and marketing and above
all, building your own truly Indian Brand. And successfully at that.
You will appreciate that when the lives of lakhs of farmers depend on a brand, and when
your history is grounded in the Independence movement, when not only competitors but
even your own government questions you, then your resolve to be the best is like the
finest steel.
Amul, therefore, is a brand with a difference. That difference manifests itself in a larger
than life purpose. The purpose – freedom to farmers by giving total control over
procurement, production and marketing. Amul and all other milk products produced by
co-operatives were born in struggle. It was the producers’ struggle for command over the
resources that they create, a struggle to obtain equitable returns and a struggle for
liberation from dependence on middlemen. It was a struggle against exploitation. A
refusal to be cowed down in the face of what others believed to be the impossible.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Amul’s birth was thus a harbinger of the economic independence of our farmer brethren.
Amul’s mission was the development of farmers, nutrition to the nation, and heart in
heart, the real development of India.
Given India’s vast geographical spread, the country had very few dairy plants at the time
of independence. As the then Prime Minister Lal Bahadur Shastri had said, ‘One Amul is
not sufficient. Many Amuls are the need of the hour.’ This led to replication of the Anand
pattern through the Operation Flood programme which has, amongst others, three major
achievements to its credit, namely: making dairying India’s largest self-sustainable rural
employment programme, bringing India close to self-sufficiency in milk production, and
trebling the nation’s milk production within a span of two and a half decades to make
India the world’s largest milk producer.
Today, 173 milk producers co-operative unions and 22 federations play a major role in
meeting the demand for packed milk and milk products. Quality packed milk is now
available in more than 1,000 cities throughout the length and breadth of India. And this is
milk with a difference – pasteurized, packaged, branded, owned by farmers – carrying the
milk drop logo, like Amul, a symbol of quality.
Over the course of Operation Flood, milk has been transformed from a commodity into a
brand, from insufficient production to self sufficient production, from rationing to
plentiful availability, from loose, unhygienic milk to milk that is pure and sure, from
subjugation to a symbol of farmer’s economic independence, to being the consumer’s
greatest insurance policy for good health.
What of the future? India’s population has risen from 350 million in 1950 to 1,000
million today. As cities draw people to new employment opportunities, the current urban-
rural ratio of 26:74 is likely to become 33:67 by the year 2010. As per available
projections, the population by the year 2010 would touch 1,190 million people. This
means that by the year 2010, rural India will be required to support some 800 million
people, an increase of 11% over 1999’s 720 million rural people.
Based on the current population demographics and projections, we estimate that there
will be 260 million women in the age-group of 15-59 years in India by the year 2010 and
this would further increase to 302 million by the year 2020, of which only 100 million
would be literate. This means that rural women will comprise 21% of India’s total
population. In our country, most rural women contribute to agricultural and dairying
activities – apart from the household work – and their activities are not included in
India’s GDP despite their significant contribution. Dairying is, therefore, very important
to our rural women. For many, it is their main source of employment and income,
incomes that they often manage themselves.
Population gives us one picture. The other is provided by the demand for household
commodities. By 2010, the national requirement for food grains will touch 266 million
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
metric ton, rising to 343 mmt by 2020. For milk, estimated consumption will be 153 mmt
by 2010 and 271 mmt by 2020. For edible oils, demand will soar to 9 mmt by 2010 and
13 mmt by 2020.
It should be clear that agriculture will remain the most important engine of our economy.
Amul and its co-operative sister brands are aware of this challenge. The future, they say,
is at best a mystery. But, it should be clear that the needs of a nation on the move must be
met. The country is young. There are more working women. The needs of an ever-
growing population have to be met with sustainable economic development. And the
demand for milk and milk products, therefore, is only going to grow further. Couple this
with the nutritional needs of the new and the old generations and it is equally clear that
there will be a need for more value added milk products. This calls for production to be
enhanced at even faster rate than it is at present.
There is also something very special about milk, something which requires that any brand
for milk and milk products to act not simply as a seller, but as a trustee. Milk is not a
white good or a brown good. It is not something people save their entire lives in order to
buy – like a car, or a house. Milk is not a status symbol; rather it is the symbol of
nutrition. Milk is a nearly complete food, providing protein, vitamins, minerals and other
nutrients so essential to maintaining good health.
We realise the value of milk on the day the milkman does not bring it to our doorstep,
when our children have to go to school without it, when we go without our daily cup of
coffee or tea. And what would our lives be like without ghee, butter, cheese, curd, lassi,
chaas and the like. Milk is not only an ingredient in our favourite recipes, it is an essential
ingredient of life itself. And, by its very indispensable nature, it has one of the biggest
markets – a whopping 82 mmt at a very conservative consumption of just 214 grams per
day per person in India alone.
Our commitment to the producer, and our contract with the consumer are the reasons we
are confident that co-operative brands, like Amul, will have an even bigger role to play in
the next fifty years. Resources need to be deployed with a purpose and a commitment to
deliver better results. There is no limit for a marketing exercise then. It must build India
and its culture a second time round. An India, that is the land of our dreams
5.Article I
Amul enters Delhi ice cream market -- In 'co-operative competition ' with
Mother Dairy
Our Bureau
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
THE Gujarat Co-operative Milk Marketing Federation (GCMMF or Amul) has launched
its ice cream in Delhi, setting the stage for a three-cornered tussle with Kwality Walls and
Mother Dairy for the country's largest market for ice creams.
Delhi currently accounts for around 18 per cent of the country's estimated Rs 525 crore
organised ice cream market of 80.8 million litres. It also boasts of a per capita annual ice
cream consumption of 1.45 litres, as against the national average of 0.25 litres.
The Delhi market is currently dominated by Hindustan Lever Ltd's (HLL) Kwality Walls
and Mother Dairy, which is a brand of Amul's sister co-operative concern, National Dairy
Development Board (NDDB). Both Kwality Walls and Mother Dairy now sell 6.5-7
million litres each of ice creams in Delhi.
"As a third entrant, we hope to capture 25 per cent of the market in two years' time. And
this will come not at the expense of Mother Dairy, but Kwality Walls," said Mr Vipul
Mittal, Manager (Sales), GCMMF.
Amul has priced its ice cream at Rs 65 for a 1,250 ml Vanilla brick, which is what
Kwality Walls and Mother Dairy are charging for a similar pack of 750 ml and 1,200 ml
respectively. Similarly, it is selling a 100 ml Vanilla cup for Rs 10, which is the same as
Mother Dairy, whereas Kwality Walls is charging the same for an 80 ml cup.
"By ensuring that our prices are more or less the same as that of Mother Dairy, but much
lower than that of Kwality Walls, we hope to increase the market share of the co-
operative sector in the Delhi market," Mr Mittal said. He ruled out the possibility that
Amul's `co-operative competition' with Mother Dairy would actually end up in the two
co-operatives eating into each other's rather than KwalityWalls' share.
Delhi is a market that is expanding by 20 per cent each year. On the other hand, Mother
Dairy's plant here has capacity constraints to cater to this expanding market. Our presence
would ensure that the incremental market will not accrue to Kwality Walls alone," he
added.
In fact, Amul, till recently, was using Mother Dairy's facility to manufacture its ice cream
for the neighbouring markets such as Faridabad, Gurgaon and Ghaziabad. But from now
on, Amul will source its entire ice cream requirement (including for Delhi) from its own
Gandhinagar plant.
Amul claims to have already deployed 1,000-odd deep freezers in the last 15 days in
Delhi under its `Hamara Apna Deep Freezer (HADF)' scheme. Under this, retailers are
encouraged to buy their own deep freezers for vending ice creams, with Amul negotiating
a discounted price on their behalf with refrigeration companies like Blue Star, Voltas and
Carrier.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
This is as against the practice of the ice cream company itself providing the freezer at the
retailer's end, subject to the latter depositing a refundable security amount. "In the HADF
scheme, the retailer not only saves on the security deposit, but also enjoys the flexibility
arising from owning the asset and availing a direct five-year guarantee from the
manufacturer. These, together with our negotiating a discounted price on their behalf,
entails cost savings of Rs 5,000-8,000 per freezer depending on capacity and make," Mr
Mittal said
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Section III
Vth Semester November 2001 – Management of Cooperatives
SECTION – I
(b) Briefly discuss the difference, if any, between the traditional and modern
approaches to cooperation.
(d) What are the important functions of the Registrar of Co-operative Societies?
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
The Adareha Co-operative Housing Society Ltd. (tie Society) was located in one of the
suburbs of Mumbai. The Society's premises housed a total of six buildings and had a
total of 72 flats.
Established over 25 years ago, the Society had a fairly respectable group of people as its
them were professionals, while the remaining few also lead rather hectic lives in their day
to day work.
Mr. Vishwas Joshi was the chairman of the Society. He had served the society in different
ways. Mr. Joshi had been a treasurer, the secretary and now he was the Chairman.
While the members of the Society were good-humoured and decent people, they were
somewhat indifferent, especially when it came to undertaking specific work for the
Society. As a rule, hardly anybody was interested in becoming a member of the
Managing Committee (MC) of the Society. Even those who were finally somewhat
persuaded to become MC members, took very little interest in actually running the
society effectively.
This state of affairs of the Society made Mr. Joshi, basically a public-spirited man,
somewhat sceptical about his involvement with the Society. While the members of the
Society did not prefer to actively shoulder the responsibility of running the Society, they
usually emerged as its staunchest critics. Such criticism was seldom constructive. Over a
period of time the true spirit of cooperation appeared to have been lost sight of. The net
result of all this was that nobody was really concerned with how the society was being
run.
Mr. Joshi was frankly tired of doing a thankless job. His patience also appeared to be
running out. One fine morning he abruptly decided to put in his pap3re and resigned
from the Chairmanship of the society.
(a) How would you account for the near lack of service motive amongst the members of
the Society?
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
(b) What steps would you suggest to inculcate the true spirit of cooperation among the
members?
(d) How far would it be correct to argue that the problem faced by the Society is
basically a reflection of a much larger problem of disinterested members who
constitute the first tier of cooperation?
SECTION – II
a. NABARD
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Prelims 2001 – Management of Cooperatives
(2 Hours) [Total marks 60]
N.B.
1. Section I is compulsory.
SECTION - I
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
Shri Narayan Dutt, the Chairman of the Grahak Sahakari Bhandar, was a very
conscientious and devoted worker. He was very keen to exercise proper control. He spent
at least two hours a day in the office of the Society and occasionally visited the shops too.
He looked into the papers and issued written instructions to the manager from time to
time. But Shri Ashok Sen, the manager on deputation, being a Deputy Registrar, acted on
his own with the added confidence that he was not a “mere employee” under the
Chairman, but was secure in his Government service. Instructions of the chairman
remained unattended and the Board was kept in the dark on many important matters.
While Shri Ashok Sen was thus taking liberties with the Board, he tried to enforce
discipline on his subordinates. But he came across strong resistance and lack of
cooperation on their part. This he suspected to be due to the instigation, of Shri Mukherji,
the assistant manager, who had hoped to be promoted as a manager on the retirement of
the ex-manager. Shop staffs were not amenable to any discipline. Unauthorised sales on
credit were being effected by shop managers and leakages in the shops were also
mounting up. Office staff also was non-cooperative. There were occasions when shop
managers were turned back by the cashiers without accepting the cash they had come to
pay on the ground that office hours were over. Liability registers were not written up do
date. Accounts were always in arrears. Annual accounts could not be completed and
statements of accounts would not be prepared for audit and presentation to the General
Body. The General Body meeting could not thus he held within the statutory period of
three mouths of the close of the cooperative year. Extension of further three months was
obtained from the Cooperative Department to held the meeting. But the accounts could
not he made even by that time
This situation was considered with great concern by the Department and the Board of
Directors was suspended.
Questions:
iii) Suggest some solutions to tackle conflict situations between the Board and the
manager.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students
For ManagementParadise.com
By ex-TYBMS students.
SECTION – II
4. In what way has the cooperative movement provided political leadership to the
country?
a. NCDC.
b. ICA.
More Notes and Projects and Resources for BMS and MBA students available at
http://www.ManagementParadise.com : The TRUE Voice of Management Students