GENERAL CONCEPTS AND PRINCIPLES OF COOPERATIVES Coop 002 – Cooperative Management MARILYN P. GAOAT Instructor

Review: Definition of Cooperative R.A 9520, Article 3 “An autonomous and duly registered association of persons, with a common bond of interest, who have voluntarily joined together to achieve their social, economic, and cultural needs and aspirations by making equitable contributions to the capital required, patronizing their products and services and accepting a fair share of the risk and benefits of the undertaking in accordance with universally accepted principles.”

Characteristics of Cooperatives Cooperatives are service oriented Cooperatives are community oriented Cooperatives are people oriented Cooperatives are owned, managed, and patronized by their members Cooperatives are business enterprises with social responsibility Cooperatives develop best through the principles of subsidiarity Cooperatives serve best when they satisfy the real felt needs of the members and teach members to become self-reliant Cooperatives develop best from bottom to top The development of cooperatives is enhanced through multi-sectoral approach

Characteristics of Cooperatives Cooperatives are service oriented Cooperatives are not for profit and charity but for service Service to others is expected to be given primary importance, while self-interest should be given only a secondary priority.

Characteristics of Cooperatives Cooperatives are community oriented It helps improve the quality of members’ life as well as the community in which they operate

Characteristics of Cooperatives Cooperatives are people oriented serve as tools of change for total human development, for total quality of life of the members, economic, social, political, cultural and spiritual

Characteristics of Cooperatives Cooperatives are owned, managed, and patronized by their members Sense of ownership is one of the keys to the success of cooperatives

Characteristics of Cooperatives Cooperatives are business enterprises with social responsibility Net Surplus is distributed to members as capital contributors and as consumers

Characteristics of Cooperatives Cooperatives develop best through the principles of subsidiarity Mutual-help (joint and united action) “If you want something done, do it yourself” “Maximum Strength Through Perfect Unity”

Characteristics of Cooperatives Cooperatives serve best when they satisfy the real felt needs of the members and teach members to become self-reliant It is a basis for patronage

Characteristics of Cooperatives Cooperatives develop best from bottom to top Primary level Secondary level Tertiary Level Federations (same business) or Union

Characteristics of Cooperatives The development of cooperatives is enhanced through multi-sectoral approach Networking and linkages with government and non-government sectors

Core Values of Cooperation Democracy Solidarity Self Help & Self Responsibility Equality & Equity Source: ICA Core Values of Cooperation

DEMOCRACY we give our members a say in the way we run our businesses

EQUITY we carry out our business in a way that is fair and unbiased Equity is a never ending challenge since this refers to how members are treated within the cooperative. Members should be treated equitably in how they are rewarded, normally through their patronage dividends, allocations to capital reserve in their name or reductions in charges.

EQUALITY no matter how much money a member invests in their share account, they still have one vote means that the basic unit of the cooperative is the member who is either a human being or grouping of human beings. Members have rights of participation, a right to be informed, a right to be heard, and a right to be involved in making decisions. Members should associate in a way that is as equal as possible, one that is a continuing challenge for all cooperatives.

SELF-RESPONSIBILITY we take responsibility for, and answer to our actions Self-responsibility means that members assume responsibility for their cooperative, for its establishment and its continuing vitality. Members are responsible for ensuring that their cooperative remains independent from other public and private organizations.

SELF-HELP we help people to help themselves is based on the belief that all people can and should strive to control their own destiny. Full individual development can take place only in association with others. Through joint action and mutual responsibility, one can achieve more, by increasing one’s collective influence in the market and before governments.

“United we stand; Divided we fall” SOLIDARITY we share interests and common purposes with our members and other co-operatives. Solidarity ensures that cooperative action is not just a disguised form of limited self interest, that cooperative is more than just an association of members, but affirmation of collective strength and mutual responsibility. “United we stand; Divided we fall”

COOPERATIVE PRINCIPLES

Open and Voluntary Membership membership is open to everyone Filipino citizen 18 years of age Meets the common bond of membership

Democratic Member Control all members have an equal voice in making policies and electing representatives One man, one vote

Member Economic Participation all profits are controlled democratically by members and for their benefit Proportionate based on capital contribution and patronage

Autonomy and Independence cooperatives are always independent, even when they enter into agreements with the Government and other organizations

Education, Training and Information cooperatives educate and develop their members as well as their staff

Cooperation Among Cooperatives cooperatives work together with other cooperatives to strengthen the cooperative movement as a whole Primary cooperative needs to be affiliated to a secondary cooperative; and secondary to tertiary cooperative

Concern for Community cooperatives also work to improve and develop the community, both locally and internationally.