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Cooperative

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Jeanette Formentera
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37 views

Cooperative

Uploaded by

Jeanette Formentera
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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Co-operative organization is the form of organization where in persons voluntarily

associate together as business being a basis of equality for promotion of economic


interest of themselves. It is a voluntary association of persons with same interest. It
is guided by service motive. It is established for economical and social development
of weaker section of the society. It tries to solve similar problems. In all form of
business organizations, the objective of owner is to make profit. But its objective is
to provide services. Its motto is all for one and one for all. It helps through mental
support too. it can be defined as voluntary association of person usually of limited
means forming together in equal basis for promotion of certain economic or
business interest.

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The International Labour Organisation has defined cooperative
organisation as follows:
A cooperative organisation is an association of persons, usually of limited
means, who have voluntarily joined together to achieve a common economic
end through the formation of a democratically controlled organisation, making
equitable distributions to the capital required, and accepting a fair share of risk
and benefits of the undertaking.

The word ‘co-operation’ stands for the idea of living together and working
together. Cooperation is a form of business organisation the only system of
voluntary organisation suitable for poorer people. It is an organisation wherein
persons voluntarily associate together as human beings on a basis of equality,
for the promotion of economic interests of themselves.

The cooperative movement has three objectives—Better living, Better business


and Better farming.
A cooperative organisation always prefers
(1) Service instead of profit maximization,

(2) Survival of the weakest instead of survival of the fittest,

1. (3) Self-help and self-reliance instead of dependence on external bodies.

2. (4) Development of moral character of members instead of emphasis on pure


material development.

Characteristics of Cooperative Organisation:


3. The following are the characteristic features of a cooperative
organisation as a form of business organisation:
1. Voluntary Association:
4. A cooperative society is a voluntary association of persons and not of capital.
Any person can join a cooperative society of his free will and can leave it at any
time. When he leaves, he can withdraw his capital from the society. He cannot
transfer his share to another person.

5. The voluntary character of the cooperative association has two


implications:
6. (i) None will be denied the right to become a member and

7. (ii) The cooperative society will not compete anybody to become a member.

8. 2. Spirit of Cooperation:
9. The spirit of cooperation works under the motto, ‘each for all and all for each.’
This means that every member of a cooperative organisation shall work in the
general interest of the organisation as a whole and not for his self-interest.
Under cooperation, service is of supreme importance and self-interest is of
secondary importance.

10. 3. Democratic Management:


11. An individual member is considered not as a capitalist but as a human
being and under cooperation, economic equality is fully ensured by a general
rule—one man one vote. Whether one contributes 50 rupees or 100 rupees
as share capital, all enjoy equal rights and equal duties. A person having only
one share can even become the president of cooperative society.

12. 4. Capital:
13. Capital of a cooperative society is raised from members through share
capital. Cooperatives are formed by relatively poorer sections of society;
share capital is usually very limited. Since it is a part of govt. policy to
encourage cooperatives, a cooperative society can increase its capital by
taking loans from the State and Central Cooperative Banks.

14. 5. Fixed Return on Capital:


15. In a cooperative organisation, we do not have the dividend hunting
element. In a consumers’ cooperative store, return on capital is fixed and it is
usually not more than 12 p.c. per annum. The surplus profits are distributed in
the form of bonus but it is directly connected with the amount of purchases by
the member in one year.

16. 6. Cash Sale:


17. In a cooperative organisation “cash and carry system” is a universal
feature. In the absence of adequate capital, grant of credit is not possible.
Cash sales also avoided risk of loss due to bad debts and it could also
encourage the habit of thrift among the members.

18. 7. Moral Emphasis:


19. A cooperative organisation generally originates in the poorer section of
population; hence more emphasis is laid on the development of moral
character of the individual member. The absence of capital is compensated
by honesty, integrity and loyalty. Under cooperation, honesty is regarded as
the best security. Thus cooperation prepares a band of honest and selfless
workers for the good of humanity.

20. 8. Corporate Status:


21. A cooperative association has to be registered under the separate legisla-
tion—Cooperative Societies Act. Every society must have at least 10
members. Registration is desirable. It gives a separate legal status to all
cooperative organisations—just like a company. It also gives exemptions and
privileges under the Act.

22. Types of Cooperatives:


23. Cooperatives may be formed in all walks of life. Some of them are
concerned with the moral and social uplift of a weak section of the people,
while many of them combine some business activity with service to members.

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