COOPERATIVES

By - Alina & Vaibhav

What is a Cooperative?
The purpose to start a cooperative is to understand the economic, cultural and
social demands or the needs of the organisation’s members and its
surrounding community. Cooperative are usually very committed to their
surrounding community and mostly focuses on strengthening the community
they exist in or serve. “When a co-operative does well financially or
economically, the community served by the co-op benefits, not just a small
group of shareholders.”
How does a Cooperative work?
A cooperative looks very similar to a corporation but the difference lies in how they
both function. For example, if we look at a grocery store cooperative, it looks very
similar to any other grocery shop to consumer. But we don’t know what’s
happening in the background. Some cooperative limit who can shop from them. In
some cases, only members are open to buy from cooperative and in some cases,
the shop is open to all but the special deals and discounts are given to the
members only. If we see closely, we can see that people who are owners of
cooperative are most likely to work as an employee there.
What is the purpose of a Cooperative?
The purpose to start a cooperative is to understand the economic, cultural and
social demands or the needs of the organisation’s members and its surrounding
community. Cooperative are usually very committed to their surrounding
community and mostly focuses on strengthening the community they exist in or
serve. “When a co-operative does well financially or economically, the community
served by the co-op benefits, not just a small group of shareholders.”
Different types of Cooperatives
Worker Cooperative:
A cooperative that is governed and managed by the members themselves-
individuals combine their abilities and interests to accomplish common objectives
like creating job opportunities for themselves, providing local area administration
and making an overall democratic environment.
Ex: bakeries, retail stores.

Consumer Cooperative:
A firm that is controlled by the consumers and it focuses on catering to their
individual needs. It generally aims at services rather than monetary purposes.
Ex: Health-care co-ops, food co-ops, electric co-ops.
Types of Cooperatives- Continued:

Producer Cooperative:
A firm that is made, possessed and worked on by producers. They can choose to
cooperate or work as individual entities to assist with expansive showcasing of
conceivable outcomes and creation proficiency. They are coordinated to measure,
market, and circulate their own items. This decreases expenses and strains in
every area with a common advantage to every producer.
Ex: Carpentry, farming/agricultural co-ops. Amul is a well known example of
producer co-op.
Advantages and Disadvantages of Co-ops
● Decision making power ● Slower decision making

● Social benefits ● Limited sources of finance

● Public support ● Limited promotional opportunities

● Motives/incentives to work ● Disincentive effects

Case Study - Amul
● Amul is an Indian dairy co-operative firm,
based at Anand in the state of Gujarat.

● It was formed in 1946 by a group of dairy

farmers who decided to bring an end to the
exploitation of the marginal milk producers
by traders or agents of the only existing

dairy, thereby gaining access to markets and maximizing returns for their
efforts.
Case Study - Amul
● Amul impelled the white revolution which made it the country’s largest
producer of milk and milk products.

● White revolution was one of the biggest dairy development

movements in 1970. Which helped dairy industry with economically
and sustain itself. While providing employment to the poor farmers.
Growth
Amul is a brand managed by a co-operative body, the Gujarat Co-operative
Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned By 3.6
million milk producers in Gujarat.
“The Gujarat Cooperative Milk Marketing Federation Ltd., which markets Amul
milk and dairy items, detailed a 13% expansion in turnover to Rs 33,150 crore
on March 31, 2019.”

Amul is the biggest exporter of dairy

items in more than 40 nations. For
example - West indies, Singapore,
Thailand, Japan, etc.
How it works?
Amul is successful because of the
attention towards the hygiene, the
quality standards and effective use of
marketing.
Why Coops matter
Co-ops offer multiple benefits to their members and the community around them.
In a cooperative firm all the members would be equally liable/responsible for every
profit, loss and failure.
Cooperatives matter today because they help rebalance power and dilute the
concentration of wealth. The cooperative model is one that creates shared
prosperity, allowing more people to participate in the economy.
Citations
Ijser.org. 2021. [online] Available at:
<https://www.ijser.org/researchpaper/A-CASE-STUDY-OF-AMUL-COOPERATIVE-IN-INDIA-IN-RELATION-TO-ORGANIZATIONAL-D
ESIGN-AND-OPERATIONAL-EFFICIENCY.pdf> [Accessed 19 August 2021].

https://canadianworker.coop/about/what-is-a-worker-co-op/ [Accessed 20th August 2021]

https://ncdc.unl.edu/typescooperatives.shtml [Accessed 20th August 2021]

https://qsstudy.com/business-studies/objectives-consumers-cooperative-society [Accessed 20th August 2021]