PURPOSE AND FUNCTION - Cooperative Principles PLUS

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The purpose of a cooperative enterprise will be established by its members, this ordinarily is to remedy specific deficiencies in a specific market or marketplace. The purpose needs to be set out in terms of the specific outcomes that the membership want their enterprise to achieve on their behalf.  These achievements will not only include socio-economic outcomes - ‘a better deal’ but also honest dealing, integrity, fairness, equivalence, autonomy - ‘a better organization’ and continuity/resilience - ‘a better future’.

The function of a cooperative enterprise is to intervene in a specific marketplace in the sustainable interest of its members. Co-op leaders need to be very clear as to those markets/marketplaces where they ought to be intervening on behalf of their members. In most countries there are a lot of markets crying out for cooperative intervention.

Ownership is not enough
Cooperative ownership per se can promise little or no benefit to members, such benefits only arise when collective power in the marketplace is exercised on the member's behalf. Simply setting-up and running a co-op as an enterprise that operates in a similar way to any commercial business within the same marketplace is never enough to sustain success as a cooperative.

Every coop needs a viable market intervention strategy
At the heart of every truly successful cooperative there will be a viable market intervention strategy, this provides the means of securing a better deal for its members. Such a strategy will involve finding better ways of doing things that result in providing members with benefits that are not available in the existing marketplace. This can be a better price but this alone is rarely enough to sustain a cooperative over the long-term. The best way of understanding the kinds of market intervention strategies used is to check out the examples provided by successful coops. However, part of the strategy will inevitably include providing goods or services that offer better value and other features demanded by members, and include the fact that a coop should be trusted at all times to act in the members' best interest and be committed to them over the long-term.

Renewal and resurgence within co-ops is an important process that must take place systematically, otherwise when changes take place within their markets and marketplaces they all too often become marginalised.

A view ahead
Leadership of Change

Executives often want to pursue growth to the detriment of the cooperative's long-term effectiveness, because such growth can mean a bigger empire, more status and higher pay for them. Cooperatives need to be both nimble and simple so that they can quickly change in response to new conditions in the marketplace. Executives often want to move beyond their existing marketplace because expanding into new areas adds to their empire. As a general rule a new marketplace requires a different cooperative led by people that understand the dynamics of that new marketplace.

July 2014 © Edgar Parnell 2014

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