cooperative society features, advantages disadvantages
The members' meeting is called to decide the main policies and the responsibility of implementing them is on the management committee. In this purpose cooperative united the weaker and guide them to go ahead with mutual cooperation which helps to endure social relationship.. Co-operate society helps to awake a new working spirit in the mind of those people who are defeated and spiritless in the struggle of life. Government also extends many type of subsidies to cooperative societies strengthening their financial stability and sustainable growth in future. For example, a cooperative society is not suitable for organizing big industrial enterprises. It is possible to take more amounts in the form of a loan from the government. Many business enterprises established to earn a profit, but cooperative society has a motive of service to the members of the society for common welfare not to earn a profit. 2. This profit is utilised for meeting the day-to-day administration cost of the society. But this organization is based on help each other through available resources and also provide goods to society members without profit or at a lower price. All the members of the society are jointly known as the general body, whereas, the members who manage the cooperative organizations are jointly known as the managing committee. Our cooperative hasn’t possessed the mentality to obey the principles of this organization. Cooperation work with the feeling of helping others. The agricultural produce of the small farmers is just sufficient to fulfill the needs of their family. As it is a voluntary association the old members may go, new members may come, but the life of society is not affected. It has a continuous existence because it is not affected by the death of any member of society. Cooperative buildings, or “co-ops,” are a unique housing option, typically found in a limited number of U.S. urban markets. In addition to these economic, social, and moral benefits, it is also capable of educating the masses in citizenship and political life. Surplus of the society, if any, are distributed among the members in the ratio of their wages.
Therefore the benefit of the co-operatives has still not reached many poorer sections.
Those hurdles create some problems as follows:-. Generally, his liability is limited up to the face value of shares.
A cooperative society is a self-governing institution.
The formation of a company is more formal and complex. That is, they set up multi-purposes mini-supermarket and render a variety of services like those mentioned above.
It first begins in 1844 in Britain by 28 weavers. This organization is very small in size. The membership fee is limited for which they are unable to raise large amount of resources as their members belong to the lower and middle class.
It sells goods based on cash only. The cooperatives, being a special form of business ownership, enjoy certain advantages which are no availed of by other forms of organizations. Weaknesses in its Lending System. The committee can also get its registration done. The trading operation of the cooperative society is done based on cash.
Disadvantages Of Co-operative Societies. Generally, people do not have faith and confidence in the cooperative society. This society produces or collects goods from the manufacturer and supplies these goods to the members at a cheap rate. In appointing employees and sanctioning a loan, a decision is to be made regarding their experience. There are no entry or exit barriers. Voluntarily Organisation: Co-operative Organisation is a voluntarily association of individuals seeking to improve their economic conditions through joint efforts. The funding and the amount of funds that would be released by the government are uncertain.
Credit cooperative societies are two types: agriculture credit cooperatives and non-agriculture credit cooperatives. 5 Steps to Make a Business Plan Example - Tooprofit.com, Increase Sales With Low Cost Marketing Strategy, Profit vs Revenue | All of the Definition - Tooprofit.com. Since the management is taken care of by the managing committee, no individual can be made accountable for in efficient performance. Housing Cooperative Society: This committee is formed to help the members who need lands and houses. Thus, both the members, as well as the societies, are benefited by that.
A cooperative society is established just for bringing the economic and social welfare for its members. Profit is not at all on the agenda of the cooperative society. 7. This decision is taken in a directors’ meeting. Inefficiency of management may not bring success to the societies. Hence, the cooperative society hardly comes across financial hardship because of the noncollection of sales dues. Another reason for a low price at a cooperative society is that it eliminates the middleman from a chain of distribution i.e., goods are directly purchased from the manufacturers or producers and sold to the customers. 5.
It is based on the principles of collective effort, mutual self – help, equality, democracy, distributive justice and freedom.
Members decide what to do with the money and when.
Therefore, it has stable life are continues to exist for a longer period. The reason many co-operative societies … Government put their nominee in the Board of management of cooperative society.
“Unity is strength” is the guiding principle of a cooperative society. Moreover, it promotes moral, social, and educational values. To overcome the hindrance of cooperative society, there must be needed amendments of law and remarks on the law with easy description. Every member has got equal rights over the function management of that society.
If we motivate them positively by giving incentives, they must devote themselves to the org. Some of the members realizing this principle may offer their services on an honorary basis.
As a result of this, there are no bad debts, and they can enjoy the benefit of various discounts and concessions.
Farmers get higher output by utilizing the same. Members can remain in the membership for as long as they want and can withdraw their membership whenever they want. Cooperative is only one aspect of a vast movement that promotes the voluntary association of individuals having common needs who combine towards the achievement of common economic ends.
6. 3.
These are generally formed by poor people or weaker sections of people in society. They sell their products or goods to retailers, especially retail co-operative society at moderates prices.
The members are allowed to spare their labor in consideration of wages for doing work on the land.
Based on that the main types of a cooperative society are; These societies are formed by the members to provide goods and services at a cheaper rate by eliminating middlemen’s commission by establishing a direct relationship with the manufacturers or wholesalers. The capital of the society is raised from its members by way of share capital. The rich people elect themselves to the managing committee and manage the affairs of the co-operatives for their own benefit.
It also uses its surplus profit for social advantages by way of establishing charitable hospitals, schools, etc. A consumer’s co – operative store purchase the consumers good either from the manufacturers or the wholesalers and then sells them to its members at reasonable prices. For the development of a cooperative society, a great number of people must be acquainted with the curse of illiteracy. So it should be removed immediately. Co-operative societies have played an important role in changing social customs and curbing unnecessary expenditure. The societies help members to market price and thus reduce loss due to surplus production. This form of organization removes certain basic defects of capitalism. The liability of the members in a cooperative society is limited to the extent of their capital contribution. They also help to prevent concentration of economic power in few hands. Feature # 1.
Capitalism creates inequality of wealth, and cooperative society helps to reduce this as well as helps the equal distribution of wealth.
Tags: Advantages And Disadvantages Of Cooperative Societies, ARTICLES ON BUSINESS IDEAS AND OPPORTUNITIES, 30 Best Art & Craft Business Ideas And Opportunities, 20 Best Automotive Business Ideas & Opportunities, 20 Best Business Ideas In The Entertainment Industry, 20 Best Fashion Business Ideas & Opportunities, 25 Best Importation And Exportation Business Ideas, 30 Best Internet & Online Business Ideas And Opportunities, 20 Best Media Business Ideas And Opportunities, 10 Best Oil And Gas Business Ideas And Opportunities, 10 Best Real Estate Business Ideas & Opportunities, 25 Best Service Business Ideas & Opportunities, 20 Travel, Hospitality And Tourism Business Ideas. Co-operative societies are subject to excessive government regulation which affects their autonomy and flexibility. Better working relationships naturally lead to higher productivity levels, so a better service is given to customers. He is not personally liable to pay the liability of a cooperative society. The officers of cooperative societies are generally so much exposed to the members that it becomes difficult for them to maintain proper secrecy, and it is compulsory to advertise the annual account and annual reports in newspapers. Since many cooperatives have failed, the people are reluctant to become members of cooperative organizations.
Therefore members contribute their efforts to promote their common welfare.
Co-operatives have benefited the rural rich and not the rural poor.
It is very much important to remove corruption and nepotism from that org. It assists in setting up production units and marketing of produces c small business houses so also small farmers for their agricultural products.
Hence , members are not inclined to put their best efforts . The UK also has a number of autonomous consumers' cooperative societies, such as the East of England Co-operative Society and Midcounties Co-operative. READ ALSO: Production In Business Studies.
At the same time, any member who wants to leave the society is free to do so.
This also leads to the corruption of power and money in society and may result in quarrels and disputes amongst the members.
Through the process of integration, it removes middlemen. A cooperative society is a special type of society, which is established by an economically weak person for the betterment and upliftment of their economic condition through mutual help. Advantages of Cooperative Society.
Co-operative societies give loans to their members at a low interest rate. There is no limit to membership. Earlier, money lenders used to charge high rates of interest and the earnings of the villagers were spent on payment on interest alone. The cooperative societies in Bangladesh are operating under several hurdles. no shortage of capital to meet day-to-day expenses, etc. They influence the decision of the Board which may or may not be favourable for the interest of the society.
A co-operative society is managed in a democratic manner. It aims at encouraging self-help on the part of economically weaker sections of the society by looking after a truly cooperative society is the elimination of profit and provision of goods and services to members at cost. Further, the economies of scale-ma production or purchase, automatically reduces the procurement price of the goods, thereby minimises the selling price.
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