Cooperatives

Research about Cooperative which will be presented as our Final Requirement

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 TABLE OF CONTENTS

I. COOPERATIVES
 Theory and Basis of Cooperatives . . . . . . . . . . . . . . . . . . . . . . . . 1
 Objective of Cooperatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
 Nature of Cooperatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2-5
 5 Basics Elements of Cooperatives . . . . . . . . . . . . . . . . . . . . . . . . .5-6
 Objectives of Cooperatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
 Limitations on the power of Cooperatives
 Characteristics of Cooperatives
 Classification of Cooperatives

II. COOPERATIVES
 Declared principles of Cooperativism
 Types of Cooperatives
 Republic Act 6939

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 I. COOPERATIVES
Firm owned, controlled, and operated by a group of users for their own benefit. Each
member contributes equity capital, and shares in the control of the firm on the basis of one-
member, one-vote principle (and not in proportion to his or her equity contribution).
Cooperative (also known as co-operative, co-op, or coop) is
"an autonomous association of persons united voluntarily to meet their common economic,
social, and cultural needs and aspirations through a jointly-owned and democratically-
controlled enterprise”. Cooperatives may include:

 Non-profit community organizations

 Businesses owned and managed by the people who use their services (a consumer
cooperative)
 Organizations managed by the people who work there (worker cooperatives)
 Organizations managed by the people to whom they provide accommodation (housing
cooperatives)
 Hybrids such as worker cooperatives that are also consumer cooperatives or credit unions
 Multi-stakeholder cooperatives such as those that bring together civil society and local
actors to deliver community needs

Second- and third-tier cooperatives whose members are other cooperatives

II. THEORY AND HISTORY OF COOPERATIVES

Cooperatives have evolved significantly over the last 200 years and are of increasing
importance to economies throughout the world. Yet, cooperatives are marginalized and treated
as inefficient and ineffective organizational types. This paper discusses the significance of
cooperatives over historical time and the extent to which they are both efficient and effective
economically and socially. Alternative theory is used to provide insight into the cooperative
advantage in different economic sectors, and shows that cooperative solutions can produce
higher socioeconomic welfare levels to members whilst also overcoming significant market
failures. Also, competitive market places and cooperatives are not incompatible as market
forces cannot force non-cooperative solutions to socioeconomic problems. Cooperatives show
that democratic governance within the firm can contribute significantly to socioeconomic well-
being.

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III. COOPERATIVE OBJECTIVES
The objectives of COOP are to meet the guidelines of Chapter 74 and are aligned with the
Massachusetts Work-Based Learning Program. There are ten competencies:

 Communication and Literacy: Student demonstrates the ability to speak, listen, and
write to function successfully at the work site.
 Organizing and Analyzing Information: The student gathers, organizes and evaluates
the meaning of documents and information.
 Problem Solving: The student identifies problems, understands their context and
develops solutions.
 Using Technology: The student identifies and applies appropriate technologies.
 Completing Entire Activities: The student participates fully in a task or project from
initiation to completion, using appropriate time-management skills.
 Acting Professionally: The student meets workplace standards on attendance,
punctuality, dress code, confidentiality, flexibility, and self-control.
 Interacting with Others: The student works professionally and respectfully with a
diversity of co-workers, supervisors and customers, resolving conflicts in a
constructive manner.
 Understanding Aspects of the Industry: The student understands the structure and
dynamics of the entire organization, health and safety issues in the industry and the
role of business with the larger community.
 Taking Responsibility for Career and Life Choices: The student balances demands of
work, school and personal life and takes responsibility for developing his or her own
personal and professional growth.
 Character: Displays loyalty, honesty, dependability, initiative, self-discipline, and
self-responsibility.

IV. NATURE AND CHARACTERISTICS OF COOPERATIVES

1. From bottom to top Service oriented Business enterprises ARD Jo B. Bitonio CDA
Dagupan Extension Office A PMES Lecture
2. Cooperatives are organized to serve their members by providing goods and service at
reasonable cost. Members contribute the capital of the cooperative so that goods and services
can be appropriately provided through its business activities and not to maximize the profit or
dividends their capital contributions will earn from the business. Cooperatives, in servicing
the members, do not act as charitable organizations. Members are aware that the benefits come
from their contributions, patronage refund, and mutual efforts to help one another. The motto
is “Cooperatives are not for profit and not for charity but for service.”
3. Cooperatives work for the welfare of their members by integrating themselves into the
life of the Cooperatives are community in particular and the community-oriented nation in
general. Cooperatives enhance the people’s welfare through increased productivity both the

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members and the communities where they are located. By the very nature of their concerns,
cooperatives strengthen the economic, social, cultural and ecological base of the communities
where they operate.
4. Cooperatives are not merely economic instruments concerned with dividends and People
related economic and financial returns. They are the oriented mechanisms of change of total
human development. This means the total development of man as a human being in all the
economic, political, cultural, and spiritual aspects.
5. Cooperatives are member-owned, member-controlled and member-used. Ownership is
a very important factor in the success of any cooperative. It is very important that have full
authority to manage and control their cooperative. If a cooperative starts and operates solely
owned, from borrowed capital, it violates the managed, principle of self-help and loses much
of it’s an autonomous character. Cooperatives most patronized depend on the patronage of
their own by members and not from non-members. However, in certain cases a limited
patronage by non-members may be allowed mainly for reasons of business viability and service
to the community.
6. Cooperatives engage in businesses with social responsibility. They play a meaningful
economic role in the community life by serving and performing as effective and responsively
as the other financial and business enterprises. Cooperative have to generate surplus to be able
continually improve and expand its businesses services. They have to be viable, creative, with
enterprising and efficient to continually social grow and serve the needs of their responsibility
members. Increasing patronage cannot be maintained without good quality service,
management and performance. The net surplus generated from business operations are
allocated to the members at the end of each year.
7. Robert Owen advocated the philosophy of self-help that inspired the “Rocha dale
Pioneers” to organize. He said “if you want something done, do it yourself”. This philosophy
has been responsible for the success of many cooperatives all over the developed best world –
and it is the best alternative for the through poor in any country to unite and help self-help
themselves out of their depressed and mutual help condition. This is not to say that they should
not be assisted. But assistance from outside, whether technical or financial, must not stifle but
stimulate initiative, self- help, and self- reliance. The principle of subsidiarity also applies –
that before asking or soliciting aid from the outside, self-determination and self-capability
should be considered.
8. It is important therefore that proper serve best approaches and techniques are employed
when they to ensure that the real needs of the answer members are identified and recognized
the real and before any cooperative is organized. The felt needs of assisting agency or agencies
should make the members the real need be felt by the members. The assistance should be begin
from the organization stage and sustained through the developmental stage up to the point
when the cooperative begins to operate on a self-sustaining basis.
9. Organizationally, their development should be from the primary level to the secondary,
tertiary and up to the apex. Geographically, they should developed develop from the barangays

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 to the best from municipal, provincial, city, regional and national. Bottom to top the primary
cooperatives foundation stones of the whole cooperative structure. Organizing the apex before
the base is like building the roof of the house before its foundation. Sooner or later, in such a
case, the roof topples down because the foundation is weak and unable to support its load.
10. Having in mind the specific roles of Development each sector – the government, non-
of cooperatives government, and cooperative sector – is enhanced must play, a multi-sectoral
approach through a can ensure that all aspects of the multi –sectoral development process are
considered. Approach this enhances the smooth and continuous development of the
cooperatives. This approach involves the participation of all sectors from the planning stage to
the implementation, evaluation and monitoring all activities. Such approach enhance true
people power – enlightened, democratic and participative – in all levels, both organization and
geographical.

V. 5 BASIC ELEMENTS OF COOPERATIVES

1. Positive Interdependence
Many hands touching. This means the group has a clear task or goal so everyone knows
they sink or swim together. The efforts of each person benefit not only the individual, but
also everyone else in the group. The key to positive interdependence is committing to
personal success as well as the success of every member of the group.

2. Individual and Group Accountability

Self and Team Evaluation. The group is accountable for achieving its goals, and each
member must be accountable for contributing a fair share of the work toward the group
goal. No one can "hitchhike" on the work of others. The performance of each individual
must be assessed and the results given back to the group.

3. Interpersonal and Small Group Skills

Interpersonal and small group skills are required to function as part of a group. These are
basic teamwork skills. Group members must know how to - and be motivated to - provide
effective leadership, make decisions, build trust, communicate, and manage conflict.
 Completing tasks
 Communicating
 Managing conflict
 Decision making
 Appreciating group members

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 4. Face-to-Face Promotive Interaction
Two faces looking at each other. This means that students promote each other's success by
sharing resources. They help, support, encourage, and praise each other's efforts to learn.
Both academic and personal support are part of this mutual goal.

5. Group Processing
Students working together. Group members need to feel free to communicate openly with
each other to express concerns as well as to celebrate accomplishments. They should
discuss how well they are achieving their goals and maintaining effective working
relationships.

VI. OBJECTIVES OF COOPERATIVES

 Communication and Literacy: Student demonstrates the ability to speak, listen,

and write to function successfully at the work site.
 Organizing and Analyzing Information: The student gathers, organizes and
evaluates the meaning of documents and information.
 Problem Solving: The student identifies problems, understands their context and
develops solutions.
 Using Technology: The student identifies and applies appropriate technologies.
 Completing Entire Activities: The student participates fully in a task or project
from initiation to completion, using appropriate time-management skills.
 Acting Professionally: The student meets workplace standards on attendance,
punctuality, dress code, confidentiality, flexibility, and self-control.
 Interacting with Others: The student works professionally and respectfully with
a diversity of co-workers, supervisors and customers, resolving conflicts in a
constructive manner.
 Understanding Aspects of the Industry: The student understands the structure
and dynamics of the entire organization, health and safety issues in the industry and
the role of business with the larger community.
 Taking Responsibility for Career and Life Choices: The student balances
demands of work, school and personal life and takes responsibility for developing
his or her own personal and professional growth.
 Character: Displays loyalty, honesty, dependability, initiative, self-discipline, and
self-responsibility.

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VII. LIMITATION ON THE POWER OF COOPERATIVES

 Production control
 Farming based on labor input
 Price fixing

VIII. CHARACTERISTICS OF COOPERATIVES

1. It is an association of persons
2. It is an undertaking;
3. It is a voluntary organization;
4. It is a democratic organization;
5. The keynote is service and not profit;
6. The basis is equality;
7. It is based on proportionality or equity;
8. It is a socio-economic movement
9. At the service of both of the members and of the community

IX. CLASSIFICATION OF COOPERATIVES

1. Credit cooperative – promotes thrift among its members and credit funds in order
to grant loans for production.
2. Consumer cooperative – the primary purpose is to procure and distribute
commodities to members and non – members.
3. Producer cooperative – undertakes joint production whether agricultural or
industrial.
4. Marketing cooperative – engages in the supply of production inputs to members,
and markets their products.
5. Service cooperative – engages in medical and dental care, hospitalization,
insurance, housing, labor, electric lights and power, communication and other
services.
6. Multi – purpose cooperative – combines two or more of the business activities of
these different types of cooperatives, e.g. credit lending and production,
production and provision of goods and services, etc.

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X. THE SEVEN COOPERATIVES PRINCIPLES
1. Voluntary and open membership. Because cooperatives are voluntary organizations,
membership is open to all persons able to use their services and willing to accept the
responsibilities of membership, without gender, social, racial, political or religious
discrimination.

2. Democratic member control. FMCS members have equal voting rights. It doesn't matter
how much electricity a member consumes. When it comes to electing directors, each
member has one vote.

3. Member economic participation. Members contribute equitably to the capital of their

cooperative. At least part of that capital is usually the common property of the
cooperative.

4. Autonomy and independence. Cooperatives are autonomous, self-help organizations,

controlled by their members. If they enter into agreements with other organizations,
including governments, or raise capital from external sources, they do so on terms that
ensure democratic control by their members and maintain their cooperative autonomy.

5. Education, training and information. New challenges and new technologies affect your
cooperative and the entire utility industry. Ensuring our continuing effectiveness can only
be accomplished by providing information and training to the members and public, our
employees, staff and directors.

6. Cooperation among cooperatives. We are "working together, working for you," on many
levels. Cooperatives serve their members most effectively and strengthen the co-op
movement by participating in local, state, regional, national and international cooperative
organizations.

7. Concern for community. This principle focuses on members' needs and prompts
cooperatives to work for the sustainable development of their communities through
policies accepted by their members.

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XI. TYPES OF COOPERATIVES

Producer cooperatives

This refers to groups of people engaged in the agricultural arena: farming, fishing,
and forestry. The co-op members may be farmers, landowners or owners of fishing
operations. There is a long menu of possible ways these groups may cooperate. They may
buy farm inputs, equipment, and insurance, hire managers and sales people, market and
advertise together, or operate storage or processing facilities or a distribution network.

Worker cooperatives

These businesses are owned by some or all of the workers. Depending on the
start-up capital needed, they can offer workers a chance to own their own company with
very little financial investment. This can make them an ideal structure for people of
modest or low incomes. They are also increasingly popular with small groups of
attorneys, designers and engineers, fundraisers, and other professionals.
Many worker co-ops are fairly small and have no separate boards of directors;
everyone takes a direct role in policy making and other governance functions. Typical
examples are print shops, copy centers and bookstores; small manufacturing, construction
and engineering firms; homecare and daycare professionals; restaurants and bakeries,
auto repair shops and groups of artists or artisans.
A few worker co-ops attain sizable memberships. Cooperative Home Care
Associates in New York City's Bronx has 800 owner-members, mostly women of color
(often immigrants) living on low incomes and tending homebound elderly, ill and
disabled folks.
Another group often included in this label are 'democratic' ESOPs (employee
stock ownership plan), where workplace democracy is a stated goal. It is not uncommon
for workers to buy out their company as a democratic ESOP (sharing the risks and
rewards of ownership with the former owner and/or other parties) and then begin the
transition to a full-fledged worker cooperative.

Consumer cooperatives

These businesses are owned and governed by people who want to buy from the
co-op. Consumers can create a cooperative to provide pretty much anything they want to
buy. Their purchases may include groceries, electricity or telephone service, housing,
healthcare, or—under the label of credit unions—financial services. The co-ops can be
tiny or immense: a single artists' dwelling or a high rise with hundreds of apartments. A
small food buying club in a rural village or a multi-million dollar supermarket in a
bustling city.
The national Rural Electric Cooperative network serves consumer-owners in 45
states. Some cooperatively owned insurance companies like Nationwide serve enormous
memberships with significant financial assets.

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 Most consumer co-ops, even if they are not as complex or heavily regulated as
credit unions (described below), elect boards of directors who hire managers to run the
daily operations. Both the grocery and the electric industries are tough businesses that
require constant professional development. Consumer member-owners may serve on
committees, run for a seat on the board, or take another active part in the co-op. But as
often as not, their primary involvement in their co-op is in the consumption of its goods
or services.

Credit unions

Credit unions are actually consumer-owned financial services cooperatives in

which every depositor becomes a member-owner. Members may attend the annual
meeting and help elect a board of directors that is typically made up of community
volunteers, most of them with considerable financial and other relevant areas of expertise.
This is quite a difference from big international banking conglomerates with their distant
investor-owner millionaires and highly paid directors who have no knowledge of or
loyalty to local residents.
Credit unions, as with all co-ops, come is all sizes--from a single facility with a
few score members to huge, multi-branch operations that cover lots of territory and
employ many local people. Community development credit unions are a special category
created by the industry to specifically serve lower income communities.

Retail or Purchasing co-ops

Still another type of consumer co-op sometimes given its own category is the
retail or purchasing cooperative, sometimes called a shared service cooperative. Many of
these co-ops are owned and governed by independent business owners.
Best Western motels, True Value and ACE hardware stores, and Carpet One/CCA
Global Partners are independently owned businesses that have formed national and
international cooperatives to purchase goods and services at rates that will keep their
bottom lines in the black. But there are also many successful smaller operations such as a
group of independent business consultants or attorneys who want to buy office supplies,
insurance, or other products and services together. Some municipalities and even state
governments have joined together to own their own electricity, water or
telecommunications utilities as well as to buy business services and so forth
cooperatively.
What unites all of these co-ops is that they seek to improve their efficiencies
and/or market competitiveness by "bulk buying" a broad range of goods and services.

Housing Cooperatives

Housing cooperatives are owned by the residents, which makes them a type of
consumer cooperative. This can range from a single house to apartment complexes with
thousands of units. It also includes co-housing projects, in which dozens of homes are

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cooperatively owned. Condominiums are a relative of co-ops, although with condos each
member owns their own unit; in a cooperative, each member owns a share of the co-op
that owns all of the property. A special type of housing co-op is a resident-owned
community of manufactured homes, in which residents own their homes and own a share
in the co-op that owns the land and runs the park.

Complex Cases and Multi-Stakeholder Cooperatives

In some cases, it may be desirable to create a hybrid among these types of co-ops.
These are called “multi-stakeholder” cooperatives, and often create specific roles and
rights for the various types of members. For example, this may take the form of a
producer/consumer or consumer/worker hybrid co-op. In these scenarios, the membership
fees might differ for the two groups. This recognizes that there will likely be fewer
producer members, and that they potentially have more to gain and therefore more
incentive to invest, and you might also have a certain number of board seats reserved for
each (i.e. on a board of seven, there are three “at large” members, two members elected
by the producers, and two elected by the consumers).
These types of co-ops are more complex, and may experience tension among the
various types of members. After all, one of the benefits of cooperation is that people can
work together to meet their shared interests. On the other hand, a cooperative may
experience tension between its producer members’ desire for high prices for their goods,
and their consumer members’ desire for low prices.

Hybrid Worker and Consumer Owned Cooperatives

An emerging model, primarily in grocer co-ops, are consumer and worker owned
cooperatives. In these cooperatives, both the workers and consumers equally own and
manage the co-op, elect individuals to the board of directors, and so on. Eroski is a
worker-consumer hybrid grocer co-op in Spain (part of the Mondragonsystem), and their
Board of Directors is divided up into two sections - the worker section and the consumer
section that oversee topics relevant to their constituency, but who also work together on
issues important to the overall cooperative. Worker and consumer owners elect an equal
amount of representatives to the co-op's board.
In the United States, the Weaver Street Market in North Carolina is a worker and
consumer owned cooperative with three grocery stores and one restaurant.

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XII. REPUBLIC ACT 6939

REPUBLIC ACT NO. 6939

AN ACT CREATING THE COOPERATIVE DEVELOPMENT AUTHORITY TO PROMOTE THE VIABILITY

AND GROWTH OF COOPERATIVES AS INSTRUMENTS OF EQUITY, SOCIAL JUSTICE AND ECONOMIC
DEVELOPMENT, DEFINING ITS POWERS, FUNCTIONS AND RESPONSIBILITIES, RATIONALIZING
GOVERNMENT POLICIES AND AGENCIES WITH COOPERATIVE FUNCTIONS, SUPPORTING
COOPERATIVE DEVELOPMENT, TRANSFERRING THE REGISTRATION AND REGULATION
FUNCTIONS OF EXISTING GOVERNMENT AGENCIES ON COOPERATIVES AS SUCH AND
CONSOLIDATING THE SAME WITH THE AUTHORITY, APPROPRIATING FUNDS THEREFOR, AND FOR
OTHER PURPOSES.

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