Co-ops

1. Introduction to Co-operativesIntroduction to Co-operatives
September 2005September 2005

2.  WhoWho owns the enterprise?owns the enterprise?
 Who controlsWho controls the enterprise?the enterprise?
 Who uses the enterprise?Who uses the enterprise?
 Who gets the profits?Who gets the profits?
A Type of Enterprise Dependent OnA Type of Enterprise Dependent On

3. Individually Owned BusinessIndividually Owned Business
One PersonOne Person
 OwnsOwns
 ControlsControls
 OperatesOperates
 Benefits/ProfitsBenefits/Profits

4. Private CompanyPrivate Company
 Investors as ownersInvestors as owners
 Profits shared amongProfits shared among
investorsinvestors
 Voting weightedVoting weighted
according to theaccording to the
number of sharenumber of share
investmentinvestment

5. What is a Cooperative?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.

6. Co-operative PrinciplesCo-operative Principles
1.1. voluntary and open membershipvoluntary and open membership;;
2.2. democratic member controldemocratic member control;;
3.3. member economic participationmember economic participation;;
4.4. autonomy and independenceautonomy and independence;;
5.5. education, training and informationeducation, training and information;;
6.6. cooperation among cooperativescooperation among cooperatives;;
7.7. concern for communityconcern for community..

7. Democratic member controlDemocratic member control
The people who own and control and finance
the co-operative are those who use it.

8. Democratic member control isDemocratic member control is
exercised by:exercised by:
 Voting at annual andVoting at annual and
membership meetingsmembership meetings
 Electing Board ofElecting Board of
DirectorsDirectors
 Making decisions onMaking decisions on
major co-operative issuesmajor co-operative issues

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

10. Co-operative ValuesCo-operative Values
 self-helpself-help;;
 self-responsibilityself-responsibility;;
 democracydemocracy;;
 equalityequality;;
 equityequity;;
 solidaritysolidarity..

11. Types of Co-operativesTypes of Co-operatives
 Co-operatives can be distinguished by:Co-operatives can be distinguished by:
 degree of formalitydegree of formality
 ownershipownership
 type of activitytype of activity
 level in the « cooperative hierarchy »level in the « cooperative hierarchy »
 These types can be combinedThese types can be combined

12. Degree of formalityDegree of formality
 Informal groups build on co-operativeInformal groups build on co-operative
principles; example: stokvelsprinciples; example: stokvels
 Pre-co-operatives or common initiativePre-co-operatives or common initiative
groupsgroups
 Fully fledged, registered co-operativesFully fledged, registered co-operatives

13. Ownership and PurposeOwnership and Purpose
 The worker-owned co-operativeThe worker-owned co-operative: the: the
individual members are both workers andindividual members are both workers and
employers of the jointly owned co-employers of the jointly owned co-
operative enterprise. Its purpose is tooperative enterprise. Its purpose is to
provide employment to its membersprovide employment to its members
 The user-owned co-operativeThe user-owned co-operative: members: members
have their own enterprise or householdhave their own enterprise or household
and use the cooperative for joint supply,and use the cooperative for joint supply,
marketing, finance, housing etc. Itsmarketing, finance, housing etc. Its
purpose is to provide services to itspurpose is to provide services to its
membersmembers..

14. Type of activity (1)Type of activity (1)
 Economic activitiesEconomic activities
 agricultural marketing & supply;agricultural marketing & supply;
 savings & creditsavings & credit
 consumer good supplyconsumer good supply
 transporttransport
 shared services (business)shared services (business)
 handicrafts and small industrieshandicrafts and small industries
 servicesservices

15. Type of activity (2)Type of activity (2)
 Social servicesSocial services
 HousingHousing
 Social reintegrationSocial reintegration
 HIV-AIDS careHIV-AIDS care
 Medical servicesMedical services
 OthersOthers
 Musician co-operativesMusician co-operatives
 Soccer fans co-operativesSoccer fans co-operatives

16. ConsumerConsumer
cooperativecooperative
Individuals and EnterprisesIndividuals and Enterprises
MemberMember
MemberMember
MemberMember MemberMember
MemberMember
MemberMember
PurchasingPurchasing
cooperativecooperative
SMESME
SMESME
SMESME SMESME
SMESME
SMESME

17. Structure of co-operation (1)Structure of co-operation (1)
Co-ops can co-operative by membership formCo-ops can co-operative by membership form
 Primary Co-op StructurePrimary Co-op Structure - Individuals are- Individuals are
direct membersdirect members
 Secondary Co-op StructureSecondary Co-op Structure- Primary co-ops- Primary co-ops
are direct membersare direct members
 Tertiary Co-op StructureTertiary Co-op Structure – Secondary and/or– Secondary and/or
primary are both are direct membersprimary are both are direct members

18. Structure of co-operation (2)Structure of co-operation (2)
Co-ops can economically co-operation byCo-ops can economically co-operation by
geographygeography..
 LocalLocal – organized on a municipality level– organized on a municipality level
RegionalRegional – organised at district or metro– organised at district or metro
levelslevels
 ProvincialProvincial – organised by numbers districts– organised by numbers districts
and metrosand metros
 National – organised by provincesNational – organised by provinces
 InternationalInternational – organised by national co-op– organised by national co-op
movementsmovements

19. Primary Co-op StructurePrimary Co-op Structure
Co-operative
Member MemberMember

20. Secondary Co-op StructureSecondary Co-op Structure
Co-operative
Primary
Co-op
MemberMember
Local
Co-op
Member Member

21. Organizational Make-UpOrganizational Make-Up
Members
Board of Directors
Manager
Employees

22. Tertiary Co-op StructureTertiary Co-op Structure
Co-operative
MemberMember
Primary
Co-op
Secondary
Co-op
Secondary
Co-op
Primary
Co-op
Primary
Co-op
MemberMember

23. Participation RolesParticipation Roles
Co-operatives operate throughCo-operatives operate through
the roles of principal partiesthe roles of principal parties
 MembersMembers
 DirectorsDirectors
 ManagerManager
 EmployeesEmployees

24. A national Movement (1)A national Movement (1)
 There are currently 4,000 primary co-ops inThere are currently 4,000 primary co-ops in
SASA
 Worker co-opsWorker co-ops
 Housing co-opsHousing co-ops
 Consumer co-opsConsumer co-ops
 Agricultural co-opsAgricultural co-ops
 Financial co-opsFinancial co-ops

25. A National MovementA National Movement
 There are 3 national co-operative federationsThere are 3 national co-operative federations
 Savings and Credit Co-operative Leaque of SASavings and Credit Co-operative Leaque of SA
(SACCOL)(SACCOL)
 South African Federation of Burial SocietiesSouth African Federation of Burial Societies
(SAFOBS)(SAFOBS)
 South African Housing Co-op Association (SAHCA)South African Housing Co-op Association (SAHCA)
 There is 1 Tertiary co-op – national co-operativeThere is 1 Tertiary co-op – national co-operative
apex organization:apex organization:
 National Co-operative Association of South AfricaNational Co-operative Association of South Africa
 3 co-operative federations – representing 80,000 members3 co-operative federations – representing 80,000 members
 600 primary co-ops representing 167,000 members600 primary co-ops representing 167,000 members

26. A Global MovementA Global Movement
 750 000 cooperatives750 000 cooperatives
 800 million individual members – many of800 million individual members – many of
them womenthem women
 100 million jobs created100 million jobs created
 Over 50% of global agricultural output isOver 50% of global agricultural output is
marketed through cooperativesmarketed through cooperatives
 470 billion $ of savings mobilized by credit470 billion $ of savings mobilized by credit
unionsunions
 Cooperatives are world’s biggest healthCooperatives are world’s biggest health
insurerinsurer