In this section, you will get to know “What are cooperative societies”, what are the cooperative principles and how cooperatives are different from companies.
Also Check: Cooperative movement, ICA and Coops Day
Also Check: Important Committees on cooperatives
What is a cooperative society?
Cooperatives are people-centered enterprises owned, controlled and run by it’s members for their own welfare and to realize their common economic, social, and cultural needs and aspirations.
Cooperatives bring people together in a democratic and equal way. Whether the members are the customers, employees, users or residents, cooperatives are democratically managed by the ‘one member, one vote’ rule. Members share equal voting rights regardless of the amount of capital they put into the enterprise.
( Note: Remember that cooperatives are not capital centered.)
Cooperative movement can be explained as a “Voluntary movement of the people, carried out democratically by pooling together their resources or carrying on the given activity, with the purpose of achieving or securing certain benefits or advantage which given to people cannot get individually and with the purpose of promoting certain virtue and values such as self help, mutual help, self reliance and general goods of all.”
According to the International Cooperative Congress: “A cooperative 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.” This definition has a universal acceptance.
ORIGIN OF WORD COOPERATION.
- The term cooperation is derived from the Latin word cooperari, where the word co means ‘with’ and operari means ‘to work’.
- Thus, cooperation means working together. So those who want to work together with some common economic objective can form a society which is termed as “cooperative society”.
- It works on the principle of self-help as well as mutual help.
Cooperatives allow people to take control of their economic future. Since, they are not owned by shareholders, the economic and social benefits of their activity stay in the communities where they are established. Profits generated are either reinvested in the enterprise or returned to the members.
Cooperative Principles
Coperatives are driven by various principles, called Rochdale Principles. which were set out in 1844 by the Rochdale Society of Equitable Pioneers in Rochdale, England.
The original Rochdale Principles were officially adopted by the International Co-operative Alliance (ICA) in 1937 as the Rochdale Principles of Co-operation.
The Updated versions of these principles were adopted by the ICA in 1966 as the Co-operative Principles.
These principles aim at infusing honesty, integrity, openness, transparency and democratic sense into the cooperatives and they are enumerated below:
- Voluntary and Open Membership; Co-operatives are voluntary organizations and are open to all.
- Democratic Member Control; here each member, irrespective of gender and amount of investment, has an equal say in the affairs of the cooperatives. They follow one member-one vote rule.
- Members’ Economic Participation; Members contribute equitably to, and democratically control, the capital of their co-operative.
- Autonomy and Independence; Co-operatives are autonomous, self-help organizations controlled by their members.
- Education, Training and Information; Co-operatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their co-operatives
- Co-operation among Co-operatives; Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.
- Concern for Community; Co-operatives work for the sustainable development of their communities through policies approved by their members.
Difference between a company and a cooperative
Many of the principles that cooperatives work upon, also act as the guiding principles of the companies. So what is the difference between a company and a cooperative. let’s look at the following table to know about the differences between a company and a cooperative.
| Feature | Cooperative society | company |
| Objective | Interest of members and community | Self interest of management and share holders |
| Management | Chairperson is elected by the Board of Directors from among themselves. The Managing Director / Chief executive is appointed by the Board of Directors | Usually, Chairperson / Managing Director are persons with maximum number of shares in the company |
| Voting power | Member of a cooperative society have right of only one vote, irrespective of the number of shares held of any denomination | Voting rights depend directly on the holding of shares |
| Workers participation | Provision for workers participation in the management through a representative exists | No such provision for workers |
Famous Quotations About Cooperative Societies
Some of the famous quotations about Cooperative Societies are tabulated below:
| Quotations/Statement | Given By |
|---|---|
| Acquiring knowledge is one of the first principles of cooperation. | William King |
| One man- one vote | Mc Lagen Committee |
| (found) Lack of training, both before and after registration. | Mc Lagen Committee |
| No competition, no money, no profit | Robert Owen |
| Man by birth is neither too good nor too bad. It is the circumstances that make him good or bad. | Robert Owen |
| By birth, men were neither too good nor too bad. | Robert Owen |
| All our enthusiasm in the world will not be enough unless we have trained cooperatives. | J. L. Nehru |
| As for me, I am a cooperator, but in the economic structure of India, cooperation is not even a choice. It is a necessity. | J. L. Nehru |
| The cooperative way is a civilised way of working. | J. L. Nehru |
| Better farming, better business and better living is the essence of a cooperation. | Horace Plunket |
| Cooperation is a universal instrument. | Horace Plunket |
| Cooperation is self help made effective by organisation. | Horace Plunket |
| Find Raiffeisen. | Frederick Nicholson |
| Create cooperators before creating cooperatives. | Frederick Nicholson |
| Cooperation is a crime, when there is no mutual respect and confidence. | Gandhi Ji |
| Cooperation has failed in India, but it must suceed. | Gorwala Committee |
| Cooperation is something more than a system. | M Darling |
| Cooperation is an educational programme employing economic activities. | Mirdha Committee |
| If cooperation fails, there will fail the best hope for rural India. | Royal Commission |
| In seeking the good of others, we find our own. | Plato |
| Cooperation can help the transformation from capitalism and finally to communalism. | Lenin |
| Self help and mutual help are the essence of cooperation. | Malcolm Darling |
| One village, one society | Malcolm Darling |
So, this was all about the cooperative societies and cooperative principles. We are sure that you have loved this article.