The
Co-operative Continuation Process
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The
key to the formation and the subsequent ongoing
development and success of any co-operative is understanding,
accepting and practicing the co-operative difference and advantage.
This
has to be based on a recognition that there is a co-operative difference – that
the purpose and structure of a co-operative is unique and different
from private and public
business enterprises. In accepting
the co-operative difference, it logically follows that this difference creates
a co-operative advantage.
The
Co-operative Difference and
Advantage has six interdependent dimensions:
For
each of these dimensions, a co-operative in its formation must establish
the pre-conditions for ongoing
adaptation and renewal as a co-operative. Co-operatives will invariably change
over time due to internal and external processes, pressures and dynamics and critical to the capacity
of a co-operative to cope with and survive change as a co-operative
is its
willingness and capacity to maintain its
co-operative identity.
As
a co-operative moves from its formation period there are inevitable challenges
to its growth and success and new actors (e.g. new members, customers and
suppliers) become involved in the co-operative’s development – mixing co-operative
and private values and interests. Issues will increasingly arise about who
is managing the co-operative, who is making what decisions and what is the
nature of the co-operative’s entrepreneurship.
How,
then, do co-operatives maintain their co-operative identity? If co-operatives
do not build-in the ingredients of continuous co-operation, then, they will
in time not be readily distinguished by its own members and others from private
enterprises. When there is a point that this distinction is not apparent co-operatives
are ripe for de-mutualisation.
Once
they are formed, co-operatives have three development options:
None
of these developments are inevitable but it is at the point of formation that
a co-operative can choose to build-in the ingredients of strengthening co-operation
or weakening co-operation or demutualisation.
There are a number of indicators that can be used to indicate the developmental status of co-operatives:
The
following critical stakeholders impact on these variables:
The
co-operative’s board
The
co-operative’s management
The
co-operative’s staff
The
co-operative’s suppliers
The
co-operative’s purchasers
The
co-operative’s bankers
The
co-operative’s accountant
The
co-operative’s lawyer
The
co-operative’s advisers
A
clear philosophy of co-operation.
A
co-operative does not exist in a vacuum and without an explicit philosophy
of co-operation that provides a defining framework, then, there will be implicit and divergent interpretations
of the philosophical meaning and significance of the co-operative.
Unfortunately,
co-operatives can under-estimate the value of co-operative ideology and
mistake
its continuation as a business weakness. Yet,
this defies the rationale for and nature of co-operative enterprises.
A
governance practice that reflects and reinforces co-operation.
A
system of governance must reflect and reinforce co-operation. A co-operative
cannot assume its self-evident value to existing and new members and, therefore,
the automatic ongoing loyalty of members. Co-operatives must continuously
earn the loyalty of the member owners.
A management practice that reflects and reinforces co-operation.
Co-operative
boards appoint managers to manage co-operatives on behalf of the members.
The
board needs to be careful, however, that it does not assume that it’s
role is to manage the "co-operative" and that the managers role is to manage
the "business."
This
creates an unhealthy division between being a "co-operaqtive" and a
"business" that will not necessarily be noticeable in the
short-term but could have long-term unintended consequences.
There
should be no separation between “co-operative” and “business”. Instead, there
is a need to recognise that co-operative managers need to integrate co-operative values
within their management practice.
Without
this integration, there will invariably be conflicts between “co-operative”
and “business” success – potentially exacerbated by long-serving managers
whose duration could reinforce this separation.
An ongoing member education program.
A
co-operative is owned by its members and ongoing member education is critical
to ensuring member control. Member education is the continuous process by
which members see the connection between their individual interest and group
interest.
The
board is responsible for determining the direction and scope of member education
and management is responsible for its implementation.
Member
education should not be ad hoc. It should be planned, budgeted for and followed
through and include:
With
growth and age and increased complexity members find it increasingly difficult
to judge the continuing relevance and effectiveness of their co-operative
and the activities of managers. Co-operative education, therefore, increases
in importance.
An ongoing member participation program.
The
problem for a growing and long-established co-operative is the actual and/or
perceived loss of power by members and the need, therefore, to have:
Organisational
growth and change must be based on reinforcing the relationship between the
needs of members and the co-operative’s processes and activities. This is
not automatically achieved. It will have to be striven for to remain achievable.
There
are three key ingredients for ongoing member involvement – information, training
and consultation.
A
co-operative cannot force its members to be involved. What it can do, however,
is create the conditions for member involvement through involving structures,
processes and practices.
Members will become and remain involved if they have a sense of accomplishment, a sense of belonging, a feeling of control and the ability to satisfy personal ideas. The ongoing challenge for a co-operative, therefore, is to create and maintain these conditions.This depends, of course, on a commitment to co-operation.
In the Absence
In the absence
of an ongoing co-operative member education and involvement program,
by default the
directors and/or managers become increasingly influential in decision-making.
The less co-operative education and involvement, the greater the influence
of directors and managers on decisions - decisions that could predetermine
future choices.
The CFV's The Co-operative Start-Up Manual should also be consulted. The cost is $50 including postage for a printed version and $20 for an electronic version. You can download: