CO-OPERATIVE MANAGEMENT- RESOURCES TO MANAGE

 

 CO-OPERATIVE MANAGEMENT

        RESOURCES TO MANAGE

 

Like any other business, three major types of resources must be managed in a cooperative -
people, capital, and facilities.

People

 The most important resource in a cooperative is people. The success of all phases of the
business depends on competent personnel working together smoothly and efficiently. In a 1994
study conducted by Janice Dresbach, Ohio State University, cooperative mangers said training was
highly important in the areas of improving customer relations, educating members about the
cooperative way of doing business, working effectively with a board of directors, identifying
member needs. In an earlier study, managers cited the ability to deal effectively with people was
the qualification most important to the success of the best manager they had ever known. Ability to
size up a situation and act accordingly was ranked next in importance. Qualifications considered
least important were ability to keep pressure on until the job is done and technical knowledge of
supplies handled. Personnel management thus is a critical phase of business management. It begins
with the selection of personnel, followed by training and evaluation. Much depends on personnel supervisors who must plan the work, delegate responsibilities and authority, analyze jobs, and set
performance standards, as well as train workers, review performance, set up grievance procedures,
and provide leadership. And proper compensation, including fringe benefits and incentives, is
important in personnel management. Management should also motivate and reward employees.
This coaching function involves seeking suggestions from staff, creating an environment where
employees can be innovative, establishing goals, inspiring and recognizing good performance, and
developing teamwork and an esprit de corps among employees.

a cooperative, management also must strongly emphasize member relations because
ownership, control, and patronage all are member functions. This involves adequate two-way
communication and information from management to members and from members to management.
Continuous efforts are also needed to obtain new members to maintain the organization and an
adequate volume of products or services. Maintaining or improving good member-patron relations
involves providing good, honest service and helpful information about the cooperative and the
products it handles. It means keeping members informed about policies, operating practices, and
financial requirements; and pointing out their responsibilities for making the cooperative
successful.
Financial management involves: (1) considering funds available and source for additional
capital; (2) allocating funds among assets to be financed; and (3) ensuring that all aspects of
Financing are dealt with in a manner consistent with sound business practices and cooperative
principles.

Facilities

Building and equipment can represent a large proportion of a cooperative’s assets.
Therefore, important management considerations include scheduled maintenance; rearrangement,
remodeling, and replacement to improve operating efficiency; daily operating cost records;
preventive maintenance programs for rolling stock such as delivery trucks; grounds maintenance
and pest control; adequate insurance; disposal of unproductive assets; and observance of safety,
health, and other environmental regulations

DEMOCRACY

Democracy is a form of government in which all eligible citizens participate equally—
either directly or through elected representatives—in the proposal, development, and creation of
laws. It encompasses social, economic and cultural conditions that enable the free and equal
practice of political self-determination

Direct Democracy:

Direct Democracy is that form of government in which people directly participate in the
affairs of the State. In this system, public opinion is expressed directly in Assemblies meetings. All
the adult citizens have the right to participate in the meetings of the Assembly where all the laws
are passed, taxes are assessed, and appointments to execute, the decisions taken in the Assembly
are made.
Since this system is possible only in those states where the population is small and it is
possible for all the citizens to participate directly in the affairs of the state, nowadays this system
exists only in a few cantons of Switzerland and some states in U.S.A.

Indirect Democracy:

Since the modern states are much larger in size and population, it is not possible for all the
citizens to participate directly in the affairs of the state; indirect democracy has been established in
almost all the modern states. Under this system, people elect their representatives for a period who
run the administration.
If they do not work according to the wishes of the people and for their welfare, they are
changed at the time of next elections. People do not directly take part in the affairs of the state.
They elect their representatives who conduct the affairs of the state.
Indirect democracy exists in India, England, U.S.A. and France etc.

Democracy in Cooperatives
 

Aside from the public sphere, similar democratic principles and mechanisms of voting and
representation have been used to govern other kinds of groups. Many non-governmental
organisations decide policy and leadership by voting. Most trade unions and cooperatives are
governed by democratic elections. Corporations are controlled by shareholders on the principle of
one share, one vote.
Cooperatives are democratic enterprises where both ownership and decision-making power
are democratically shared. As a result, they keep money and power in the hands of the community.
Each member has a share of the organization, which makes them co-owners of the cooperative.
When decisions need to be made that affect the group, each member has one vote to say how the
cooperative is run — a mix of direct democracy and representational structures

Decision Making
 

A co-operatives’ future will be determined by the goals the members of the cooperatives set
and how effectively they make decisions and solve problems as a group. Establishing common
personal, business and social goals right from the start, and sticking to them, can help this process
immensely. This not only keeps their decisions focused, but also helps to avoid misunderstandings
that can lead to conflict. Then the decision making process is one of identifying the specific goal or
problem to be addressed, gathering the best available information on the options and their outcomes
and risks and making the choice with the best chance of providing an effective solution. Easily said,
but challenging to do!
Within the worker cooperative society, specific decisions are in the hands of the general
assembly. The Cooperative society Acts provide the foundation for this authority by law, however
the cooperative society’s bylaws may also provide that specific policy decisions, such as wage
rates, may require approval by the members’ meeting. Importantly the bylaws of the cooperative
society, which regulate the life of the cooperative society, must be approved by the members and
can only be changed by a meeting of the members.
One of the key legal responsibilities of the members is to elect the board of directors of the
cooperative society. The bylaws will specify the number of directors, their qualification and length
of terms. Directors, by law, are responsible for the affairs of the co-operative. Their duty is always
to make decisions in the best interests of the cooperative society as a whole. The directors, once
elected, in turn elect officers like president, vice-president, secretary and treasurer. These officers
of the cooperative society will have specific duties outlined in the bylaws. In small cooperative

Good collective decisions require well-researched information and good communications
between the board of directors, manager and membership. Cooperative societies may operate
democratically, but you can’t stop in the middle of the workday to discuss every decision which
must be made. The directors are responsible to ensure that an effective operational structure is in
place that it is supported by the members. This may take many forms, depending upon the desires
of the members and on the type of enterprise that the cooperative society operates.
Within most cooperative societies the following structures are usually in place and are the
forum for the following types of decisions.

ANNUAL GENERAL MEETING (AGM).

1. The board of directors reports to membership, reviewing the past business year and the
year’s financial statements.
2. The board seeks approval of its recommendations for surplus allocation.
3. The Business plan and budgets for the coming year are presented for discussion and
approval.
4. An auditor is appointed.
5. Membership elects a new board.
6. Other membership decisions specified in the bylaws are made.

BOARD OF DIRECTORS MEETING

1. The manager(s) reports to the board, which in turn provides direction to the manager(s).
2. The key function here is for the board to hold those in charge of making decisions on behalf
of the cooperative society accountable for the outcomes of those decisions. This would also
include evaluating the organizational structure used to make these decisions.
The board evaluates the cooperative society’s financial position to determine whether or not
the budgeted objectives are being met and what actions should be taken to improve the
situation.
3. The board makes or changes policies as required, or recommends a policy to the
membership if only the membership has the authority in a particular area.
4. Board members discuss long-term goals and strategy and ensure that a good planning
process is in place to guide the cooperative society in the coming year(s).
5. The board approves new members or terminates a person’s membership.

OPERATIONAL MEETINGS 

Consultation and decision-making about daily activities takes place between members and
management. These meetings, and who participates, will vary from co-operative to co-operative
depending upon the organizational structures that have been approved by the membership and/or
the board of directors.

COMMITTEES
 

Sometimes committees are appointed to research issues and make recommendations to help
the board, membership or management make decisions. These committees may be standing
committees such as a finance committee or may be ad hoc committees set up to simply address one
specific issue.