COOPERATIVE MANAGEMENT 1

Definition The word cooperation (Cooperatives) is derived from latin words ‘’operate’’ (to work) and the prefix ‘’Co’’ (Together). Cooperatives has also been for people working together in any form of social or economic ventures….. 2

A simple, workable definition: ‘’A cooperative is a user owner and democratically controlled business in which benefits are received in proportion to use’’. 3

COOPERATIVE PRINCIPLES A cooperative principle is an underlying doctrine or tenet that defines or identifies its distinctive characteristics. Historically, the Rochdale Equitable Pioneers’ Society was the first known formally organized cooperative in England. The society prepared a written list of pratices and policies that seemed consistent with success of such efforts. This list became one of the first sets of cooperative principles, characteristics that distinguish cooperatives from non-cooperative business.

Open membership, one member, one vote (Democratic management) cash trading, membership education, political & religious neutrality, no unsual risk assumption, limitation on the number of shares owned, good sold at regular retails prices, net margins distributed according to patronage. 5

ICA COOPERATIVE PRINCIPLES Voluntary and Open Membership Democratic Member control Member economic participation Autonomy and Independence Education, Training and Information Cooperation among cooperatives Concern for community 6

The 3 Contemporary cooperative principles are: User-Owned User-Controlled & User-Benefits 7

HOW A COOPERATIVE SOCIETY IS FORMED Any group of people or prospective organisation wishing to club together under the umbrella of the Co-operative philosophy must contact the cooperative area office nearest to it for details on the proposed Cooperative Society.

INTERNAL STRUCTURE OF A COOPERATIVE SOCIETY The Cooperative society is managed by the agency of members elected from among themselves to over-see the operations of the society for the benefits of members. The structure of this relationship could be represented by the diagram below GENERAL MEMBER SUPERVISORY COMMITTEE MANAGEMENT COMMITTEE/BOARD OF DIRECTORS VARIOUS SUB-COMMITTEES ALL MEMBERS

SOURCES OF FUND Grant/Donation Received Entrance Fee Shares Capital Ordinary Savings/Special Savings Loan Interest/Loan Refund Sales Proceed/Investment Income Other sources as approved by the Director

LIMIT SHARE HOLDING No Member shall hold more than one fifth of the number of shares actually paid up by all members. If any members by inheritance or otherwise, possesses more than the maximum holding permitted the management committee may sell the excess or buy them for disposal by the society

LOAN No loan shall be made to a member earlier than six months of becoming a member except in case of transfer of an existing loan of a past member to his nominee. MAXIMUM CREDIT LIMIT: Shall be determined as twice the applicant as at of the application. Subject availability of funds, the principle of making credit available, and the securities offered. INTEREST ON LOAN: To be charged at the rate determined by General member but not exceed 15% per annum nor shall it be below 5% per annum. In case of defaulter, interest shall be charged at twice the nominal rate

0ne of the most important human activities is managing 0ne of the most important human activities is managing. Ever since people began forming groups to accomplish aims they could not achieve as individual, managing has been essential to ensure the coordination of individual effects. As society has come to rely increasingly on group effect, and as many organized group have become large, the task of managers has been rising in importance. 13

Management is the process of designing and maintaining an environment in which individual, working together in group, efficiently accomplishes selected aims. 14

Management has greatly improved as cooperatives have become larger, more diversified, and integrated to match similar advances in the market place and on the farm. 15

16 Common management responsibilities: Manage or direct daily business activities Set goals and develop short-term strategic plans Organise and coordinate internal activities and subordinates Control daily operations Maintain an accurate book keeping system Prepare and present accurate financial and operational reports Attend board meetings Employ, appraise, and terminate employees as necessary 16