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Nature and Character of Cooperatives


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PMES Lecture
Cooperative Development Authority
Dagupan Extension Office

Published in: Business, Economy & Finance
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Nature and Character of Cooperatives

  1. 1. From bottom to top Service oriented Business enterprisesARD Jo B. BitonioCDA Dagupan Extension OfficeA PMES Lecture
  2. 2.  Cooperatives are organized to serve their members by providing goods and service at reasonable cost. Members contribute the capital of the cooperative so that goods and services can be appropriately provided through its business activities and not to maximize the profit or dividends their capital contributions will earn from the business. Cooperatives, in servicing the members, do not act as charitable organizations. Members are aware that the benefits come from their contributions, patronage refund, and mutual efforts to help one another. The motto is ”Cooperatives are not for profit and not for charity but for service. ”
  3. 3.  Cooperatives work for the welfare of their members by integrating themselves into the life of the Cooperatives are community in particular and the community-oriented nation in general. Cooperatives enhance the people’s welfare through increased productivity both the members and the communities where they are located. By the very nature of their concerns, cooperatives strengthen the economic, social, cultural and ecological base of the communities where they operate.
  4. 4.  Cooperatives are not merely economic instruments concerned with dividends and People related economic and financial returns. They are the oriented mechanisms of change of total human development. This means the total development of man as a human being in all the economic, political, cultural, and spiritual aspects.
  5. 5.  Cooperatives are member-owned, member-controlled and member-used. Ownership is a very important factor in the success of any cooperative. It is very important that have full authority to manage and control their cooperative. If a cooperative starts and operates solelyowned, from borrowed capital, it violates themanaged, principle of self-help and loses much of itsand autonomous character. Cooperatives mostpatronized depend on the patronage of their ownby members members and not from non-members. However, in certain cases a limited patronage by non-members may be allowed mainly for reasons of business viability and service to the community.
  6. 6.  Cooperatives engage in businesses with social responsibility. They play a meaningful economic role in the community life by serving and performing as effective and responsively as the other financial and business enterprises. Cooperative have to generate surplus to be able continually improve and expand itsbusinesses services. They have to be viable, creative,With enterprising and efficient to continuallysocial grow and serve the needs of theirresponsibility members. Increasing patronage cannot be maintained without good quality service, management and performance. The net surplus generated from business operations are allocated to the members at the end of each year.
  7. 7.  Robert Owen advocated the philosophy of self-help that inspired the “Rochadale Pioneers” to organize. He said “if you want something done, do it yourself”. This philosophy has been responsible for the success of many cooperatives all over thedeveloped best world – and it is the best alternative for thethrough poor in any country to unite and helpself-help themselves out of their depressedand mutual help condition. This is not to say that they should not be assisted. But assistance from outside, whether technical or financial, must not stifle but stimulate initiative, self- help, and self- reliance. The principle of subsidiarity also applies – that before asking or soliciting aid from the outside, self-determination and self-capability should be considered.
  8. 8.  It is important therefore that proper serve best approaches and techniques are employed when they to ensure that the real needs of the answer members are identified and recognized the real and before any cooperative is organized. The felt needs of assisting agency or agencies should make the members the real need be felt by the members. The assistance should be begin from the organization stage and sustained through the developmental stage up to the point when the cooperative begins to operate on a self sustaining basis.
  9. 9.  Organizationally, their development should be from the primary level to the secondary, tertiary and up to the apex. Geographically, they should developed develop from the barangays to the best from municipal, provincial, city, regional and national. bottom to top The primary cooperatives foundation stones of the whole cooperative structure. Organizing the apex before the base is like building the roof of the house before its foundation. Sooner or later, in such a case, the roof topples down because the foundation is weak and unable to support its load.
  10. 10.  Having in mind the specific roles of Development each sector – the government, non- of cooperatives government, and cooperative sector – is enhanced must play, a multi-sectoral approach through a can ensure that all aspects of the multi –sectoral development process are considered. approach This enhances the smooth and continuous development of the cooperatives. This approach involves the participation of all sectors from the planning stage to the implementation, evaluation and monitoring all activities. Such approach enhance true people power – enlightened, democratic and participative – in all levels, both organization and geographical.