Introduction to Cooperatives

A Type of Enterprise Dependent On

 Who owns the enterprise?

 Who controls the enterprise?
 Who uses the enterprise?
 Who gets the profits?
Individually Owned Business

One Person
 Owns

 Controls

 Operates

 Benefits/Profits
 Private Company
 Investors as owners
 Profits shared among
investors
 Voting weighted
according to the
number of share
investment
 What is a Cooperative?

A cooperative is an autonomous
association of persons united
voluntarily to meet their common
economic, social and cultural
.
needs and aspirations through a
jointly owned and democratically
controlled enterprise.
 Co-operative Principles
1. voluntary and open membership;
2. democratic member control;
3. member economic participation;
4. autonomy and independence;
5. education, training and information;
6. cooperation among cooperatives;
7. concern for community.
 Democratic member control

The people who own and control and finance

the co-operative are those who use it.
Democratic member control is
exercised by:

 Voting at annual and

membership meetings
 Electing Board of Directors
 Making decisions on major
co-operative issues
 Co-ops Principles and Practices
Co-operative Principles and Practices
Principles
Voluntary and open membership
Democratic member control
Member economic participation
Autonomy and independence
Education, training and information
Co-operation among members
Concern for community
Practices
Member recruitment policy, rules of
admission, equal opportunities,
Constitution, voting rights, role of
the board, members and
management
Economic performance, rewards to
members, capitalization and how
surplus is used
Relations with government, other
organisations and institutions and
market position,
Member, board and management
training and public relations
Federation, networks, joint
enterprises, movement building
Policy on community development,
environment and networking
 Co-operative Values

 self-help;
 self-responsibility;
 democracy;
 equality;
 equity;
 solidarity.
 Types of Co-operatives
 Co-operatives can be distinguished by:
 degree of formality
 ownership
 type of activity
 level in the « cooperative hierarchy »
 These types can be combined
 Degree of formality
 Informal groups build on cooperative
principles;
 Pre-cooperatives or common initiative
groups
 Fully pledged, registered cooperatives
 Ownership and Purpose
 The worker-owned co-operative: the
individual members are both workers and
employers of the jointly owned co-
operative enterprise. Its purpose is to
provide employment to its members
 The user-owned co-operative: members
have their own enterprise or household
and use the cooperative for joint supply,
marketing, finance, housing etc. Its
purpose is to provide services to its
members.
 Type of activity (1)
 Economic activities
 agricultural marketing & supply;
 savings & credit
 consumer good supply
 transport
 shared services (business)
 handicrafts and small industries
 Other cooperative services
 Type of activity (2)
 Social services
 Housing
 Social reintegration
 HIV-AIDS care
 Medical services
Individuals and Enterprises

Member
SME Member
SME

Purchasing
Consumer
Member
SME Member
SME
cooperative

Member
SME Member
SME
 Structure of co-operation (1)
Co-ops can co-operative by membership form
 Primary Co-op Structure - Individuals are
direct members
 Secondary Co-op Structure- Primary co-ops
are direct members
 Tertiary Co-op Structure – Secondary and/or
primary are both are direct members
Structure of co-operation (2)
Co-ops can economically co-operation by
geography.
 Local – organized on a municipality level Regional –

organised at district or metro levels

 Provincial – organised by numbers districts and metros

 National – organised by provinces

 International – organised by national co-op

movements
Primary Co-op Structure

Co-operative

Member Member Member

 Secondary Co-op Structure
Co-operative

Local Primary
Co-op Co-op

Member Member Member Member

Organizational Make-Up

Members

Board of Directors

Manager

Employees
 Tertiary Co-op Structure
Co-operative

Primary Secondary Secondary

Co-op Co-op Co-op

Primary Primary
Member Member Co-op Co-op

Member Member
 Participation Roles
Co-operatives operate through
the roles of principal parties
 Members
 Directors
 Manager
 Employees
 A national Movement (1)
 There are currently 4,000 primary co-ops in SA
 Worker co-ops
 Housing co-ops
 Consumer co-ops
 Agricultural co-ops
 Financial co-ops
 A National Movement
 There are 3 national cooperative federations
 Savings and Credit Cooperative
 Federation of Burial Societies)
 Housing Coop Association
 There is 1 Tertiary coop – national cooperative
apex organization:
 National Co-operative Association of South Africa
 3 co-operative federations – representing 80,000 members
 600 primary co-ops representing 167,000 members
 A Global Movement
 750 000 cooperatives
 800 million individual members – many of them
women
 100 million jobs created
 Over 50% of global agricultural output is marketed
through cooperatives
 470 billion $ of savings mobilized by credit unions
 Cooperatives are world’s biggest health insurer