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CHAPTER 8 Practice of Management in Cooperatives

CHAPTER 8 Practice of Management in Cooperatives

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Published by: alex266 on Nov 08, 2009
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Practice of management in cooperative is classified on the basis of functions of management like planning, organizing, staffing, directing and controlling. The features of each function are discussion as follows:-
Planning involves the advance determination of things to be done. Thefuture course of action is decided at present. Planning consists of formulation of objectives, policies, programmes, procedures and other names of achieving theseobjectives.
The organizing function means the determination and enumerationof the necessary component activities which are required to achieve the enterpriseobjectives. It means the grouping of these activities, and assigning of theseactivities to groups, departments, and so on. Accordingly activities are dividedand each worker is assigned the job. Necessary authority is also delegated.Coordination is also ensured by the manager for the smooth functioning of works.
Staffing connotes the recruitment of right and competent personnel toman the organization at all levels. Staffing includes section, training, promotion,appraisal, compensation, communication etc. The success of an organizationdepends mainly on this function of management.
In directing the activities of the organization guidance is given to thesubordinates. Directing warrants efficient leadership qualities. Directing functionincludes decision-making guiding, supervising, motivation etc.
Controlling ensures whether the activities are proceeding as per theoriginal plan. Deviations are located and corrected. Controlling includes performance appraisal, corrective actions, etc. Control is undertaken throughinstruments like budget, costing etc.
8.1. Planning in Co-operatives
Co-operatives as business and economic organizations have to plan their future activities,like any other economic organizations. The planning advantages accruing to anyorganization could be bestowed on co-operatives also. ‘If co-operative management is to become more effective, and the sense of mission of co-operative members is to bereinforced, then the function of planning must be pursued with consummate skill andsensitivity. Planning which grows out of the hopes of the people it serves, and istempered by an understanding of what is attainable, brought to a sharp focus by aninformed, pragmatic manager’.1.Planning in co-operatives is needed for the vertical and horizontal growth of individual co-operatives. Lack of proper planning led to the stagnation of manyco-operatives. The primary agricultural credit societies which are expected toundertake multi-purpose activities are confining only to credit disbursal in manystates. Only by proper planning additional activities can be undertaken and thevolume of business should be increased.1
2.Planning in co-operatives can be framed and steps will be taken to move towardsset goals. Objectives can be framed and steps will be taken to achieve them withina stipulated period.3.Co-operatives need planning to increase their competitive power. As similaactivities are undertaken by other organizations the co-operatives have to competethem and must provide efficient service to their member customers.4.The operational efficiency of the co-operatives must be increased to make them asviable units and to grow and sustain forever. Planning is very much essential toguarantee this. Through proper planning responsibilities are fixed for the staff anthey are delegated powers to execute them. If the operational efficiency is lost,co-operatives cannot attract customers. This warrants planning for each set of activities. If proper planning is not arranged for recovering and its operationalsuch maladies.5.Co-operatives are not only undertaking economic functions but have a mission toteach the social values of co-operation, namely self help through mutual help eachfor all and all for each unity in diversity etc. Their motto and benefits must beextended to the people who are exploited by evil forces. Proper planning at eachsociety’s level can make them to spread the above messages to those who are yetto be embraced by the co-operatives.
Objectives in co-operatives
Co-operatives have two important objectives namely immediate objectives and ultimateobjectives.
Immediate Objectives:
Immediate objectives are the objectives which form part of theobjectives that are discussed in management planning. Again, the objectives focooperative organizations differ form each other. Co-operative processing units like co-operative sugar factories, fertilizer units, rice mills, etc are run applying all modernmanagement techniques. They naturally undertake all the functions of management. Onthe other hand small cooperatives like village credit societies, weaver’s societies, etc. donot follow such management principles. For them planning has no significance in their working as they undertake the same function in a routine manner.Immediate objectives of co-operatives are laid down in their by-laws. These objectives inmajority of the cases are uniform to a particular type of co-operative societies. As thesocieties follow the model by laws during their registration, number of societies of a particular type follow uniform objectives. Though provision is there to amend the by-laws, very few co-operatives attempt to amend their by-laws. For examples, a villagecredit cooperative society has the objective of disbursing credit and undertaking non-credit services. These objectives are uniform for all credit societies in a state. Some of theobjectives laid down in the by-laws are not implemented at all. Though encouragement of thrift and self-help is considered as an important objective of a credit society, societiesrarely encourage or attempt to achieve this objective.2
Co-operatives which undertake processing activities with heavy investment and co-operative super markets, to frame objectives as part of their planning process. In additionto the objectives laid down in their by-laws, they frame practical objectives to face thechanging environment. They involve their managers and sectional heads for suchactivities. The Board of Directors takes the initiative for working out the plans.
Ultimate Objectives:
Ultimate objectives of co-operatives are long term objectives andthey are not decided like immediate objectives. Achieving the immediate objectives maylead to the achieving of ultimate objectives. Ultimate objectives are a social process andthey are intended to form part of social reform. These objectives are not confined to a particular co-operative. The ultimate objectives are to be implemented by all co-operatives. These objectives are elimination of poverty and backwardness, avoidingexploitation in the society, ensuring social and economic justice bridging the gap betweenthe rich and the poor. To achieve these ultimate objectives co-operatives follow the principles of co-operation laid down by the International co-operative Alliance asguidelines. These goals are to be achieved by joint effort undertaken by all types of co-operatives and by embracing the principle of co-operation among co-operatives.
Decision Making in Cooperatives
Decision making stage is an important aspect of the process of planning. After decidingthe alternative courses, the management has to choose a right course of action to achievethe goals. There are two aspects of decision making in the co-operatives.1.The role of the Board of Directors2.The role of the external agencies
1.The Role of the Board:
In a co-operative organization the Board takes thedecision on behalf of its members. The chief executive representing the professional management is also taking part in the process of decision making.The chief executive must give alternatives to a plan and must place neededinformation before the Board. The Board takes the responsibility for the successor otherwise of a decision. It assigns necessary power to the chief executive anddirects him towards the achievement of goal.
2.Role of External Agencies:
In a state sponsored and state aided movement thegovernment’s control over the co-operatives is very prominent.The Registrar of co-operative societies, who implements the co-operatives societies’ Acthas enormous control over the co-operatives. Another feature of co-operative institutionsis that the federal structures for various co-operatives have been organized. The lower units of the federal structure are supervised by the apex societies and thereby they controlthe lower units. The above said agencies greatly influence the policies of co-operatives.Hence planning in an individual society is decided by weighing the controls, suggestionsand policies given by the external agencies. In other words any internal plan of a co-operative society is influenced by external factors and the total plan must be basedweighing these factors. It is the same case with the decision making which is animportant process of planning.3

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