• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Education
  • Career
  • Investment & Money
  • Accounting & Taxation
  • Transportation & Logistics
  • Industries

Business Finance Articles

Your First Financial Choice....

  • Business
  • Commerce
  • Management
  • Insurance
  • Banking Finance
  • Marketing & Advertising
  • Tech

Principles of Cooperative Organization

Last Updated on August 29, 2020 By Lisa C. Townes Leave a Comment

A cooperative undertaking or organization is a voluntary association of individuals for the common interest of its members. It is formed for conducting some business activities. It is a protective device used by the economically weak persons of the society to safeguard their common interest against the exploitation of economically strong.

The cooperative may thus be organized not for earning a profit as the main motive but with the basic object of organizing to render services to its members. It is a democratic form in which the consumers are the owners and managers. Mr James says that cooperation is self-help made effective by an organization.

Table of Contents

  • Principles of Cooperative Organization
    • Voluntary Association
    • Equality
    • Honesty
    • Cash Terms
    • Self Services
    • Distribution of Surplus
    • Democracy
    • Economy
    • Spirit of Sacrifice
    • Service Motto
    • Solidarity

Principles of Cooperative Organization

The following are the fundamental principles of the cooperative organization (cooperative societies).

Voluntary Association

It is a voluntary association of persons where there is no restriction for its membership. Any person can become a member of society and can leave it at any time after due notice to the society.

Equality

The capital of the society is generally divided into a number of shares of equal value. In this form of organization, all members enjoy equal rights of ownership and consider equal voice in the management of the cooperative enterprise.

Honesty

Its members must not be dishonest and selfish. All the activities must be carried on honestly and fairly.

Cash Terms

Generally, the goods are supplied to its members on a cash basis. To deal on credit term is strictly prohibited. This tendency creates the habit of thrift among the members and saves the cooperative society from bad debts and keeps members out of unnecessary losses.

Self Services

All the administrative and business activities are conducted by the members themselves. Salaried persons are also employed but they have no voice in the management.

Distribution of Surplus

In principle, the cooperatives do not distribute their profit according to the capital held by the shareholders.

But the surplus earned by a cooperative is contributed to the following sectors.

  • At first, a moderate rate of interest on capital is provided to individual members.
  • Some portion of the surplus is spent on social and welfare activities of the members.
  • Some amount is transferred to reserve fund for strengthening the institution.
  • Another portion of the surplus is utilized for the payment of bonus to the employees.
  • In the case of consumers cooperative society, the surplus may be distributed among the members on the basis, of the purchases made by them.

Democracy

It is a democratic form of organization where every member is allowed to participate in the management of the business. “One member, one vote” is the basic principle of a cooperative organization and therefore managing committee cannot over look any section of members.

Economy

All the activities of the society must be carried on economically and unnecessary expenditure and wastage are to be avoided.

Spirit of Sacrifice

The cooperative society must be based on the principle of all for each and each for all. There must be spirit of self help and mutual help amongst the members.

Service Motto

It is a form of business house not with the profit as the guiding motive but with the primary object of rendering maximum services to its members.

Solidarity

There must be trust and confidence among members for the successful operation of the society. The members must be united, associated while taking any decision regarding certain matters.

lisa
Lisa C. Townes

Lisa is a passionate travelers. She spends 3 months every year visiting different places worldwide. She has visited almost every famous place in the world. She herself is an affiliate blogger

Filed Under: Business Tagged With: Basics, Cooperative, Organization

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I accept the Terms and Conditions and the Privacy Policy

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Primary Sidebar

How Can You Save More on Merchant Processing Overcharges

Merchant servicing is one of the branches of financial … [Read More...] about How Can You Save More on Merchant Processing Overcharges

The Importance of SEO Rankings for eCommerce

Appearing in the top few search results is the most … [Read More...] about The Importance of SEO Rankings for eCommerce

How Can You Save More on Merchant Processing Overcharges

Merchant servicing is one of the branches of financial … [Read More...] about How Can You Save More on Merchant Processing Overcharges

3 Ways Business Intelligence Helps Telecommunications

To say telecom enterprises generate massive data on a … [Read More...] about 3 Ways Business Intelligence Helps Telecommunications

Importance of LOGO in Business

Every minute in this globe, business revolutionists are … [Read More...] about Importance of LOGO in Business

Risk vs. Reward: The Wise Way to Invest

Every good investor has a strategy. You wouldn't apply … [Read More...] about Risk vs. Reward: The Wise Way to Invest

Benefits and Drawbacks of HughesNet

It’s so difficult these days to find a stable internet … [Read More...] about Benefits and Drawbacks of HughesNet

Minimum Wage in Virginia

Most companies and corporations are confined to meet … [Read More...] about Minimum Wage in Virginia

Expert Tips in Marketing Your Business

Are you thinking of starting your own Limited Liability … [Read More...] about Expert Tips in Marketing Your Business

ELSS VS PPF: Which Investment Option is Better For You

As both ELSS and PPF schemes help an investor to save … [Read More...] about ELSS VS PPF: Which Investment Option is Better For You

8 Intriguing Education Fields for Creative People

Most people grow up and have a good idea of what they … [Read More...] about 8 Intriguing Education Fields for Creative People

Top Promotional Items You Can Choose to Advertise Your Small Business

Promotional products bring instant brand recognition … [Read More...] about Top Promotional Items You Can Choose to Advertise Your Small Business

How to Choose the Top-Performing Account-Based Marketing Firm

Account-based marketing (ABM) is a business growth … [Read More...] about How to Choose the Top-Performing Account-Based Marketing Firm

How to Prepare General Knowledge (GK) for Competitive Exams?

Preparing the General Knowledge (GK) portion has been a … [Read More...] about How to Prepare General Knowledge (GK) for Competitive Exams?

How Does the CRM Software Help Financial Services Providers?

The financial services business model is quite diverse … [Read More...] about How Does the CRM Software Help Financial Services Providers?

What Is the Minimum Wage in Texas?

Meeting the federal requirements and acquiescence with … [Read More...] about What Is the Minimum Wage in Texas?

Fortiva Credit Card Reviews

Wanting a credit card without paying security deposits? … [Read More...] about Fortiva Credit Card Reviews

The Best Tools for Financial Analysts to Use in 2021

Predicting financial trends isn’t easy, regardless of … [Read More...] about The Best Tools for Financial Analysts to Use in 2021

Types of Life Insurance – Which one is right for you

Are you considering taking out life insurance to … [Read More...] about Types of Life Insurance – Which one is right for you

Which are the Quality Improvement Techniques widely used by the organization?

Quality improvement is a systematic approach assessing … [Read More...] about Which are the Quality Improvement Techniques widely used by the organization?

Most Viewed

Advertising Business Growth Business Ideas Business Needs Business Tips Career Advice Career Development Career Guide Career Options COVID-19 Credit Card credit card reviews Debt Management Differences Employee Entrepreneurship HRM Import-Export Importance Investment Loan Provider Loans MCQs Online Marketing Organization Pakistan Partnership Past Papers Payday Loan Payday Loans PPSC Production Pros Cons Quick Money Tips Roles and Duties Startups Strategies Students Help Tips Top10 Types UK UK Banks University USA

Recent Comments

  • Muhammad Shan on PPSC MCQs: Pakistani Education Policies MCQs
  • IRSHAD AHMED on PPSC MCQs: Curriculum Development
  • Anpan Bismark on PPSC MCQs: Curriculum Development
  • Anpan Bismark on PPSC MCQs: Curriculum Development
  • Aisha on PPSC MCQs: Curriculum Development
  • Hat on Successful Small Business Ideas 2021
  • Nikki on PPSC MCQs: Curriculum Development
  • SAAMI JAWAID - on What are trade meaning, nature, and different types of trade?
  • Sahar jabeen on PPSC MCQs: Curriculum Development
  • samia azhar on PPSC MCQs: Curriculum Development

Footer

  • About US
  • Contact Us
  • Blog
  • Comment Policy
  • Terms & Conditions
  • Privacy Rights
  • Privacy Policy
  • Follow on Google News
  • Follow on Facebook
  • Follow on Twitter
  • Follow on Medium
  • Entrepreneur Skills
  • Business Cycle
  • Business Ideas
  • Speculator
  • Be Wealthy
  • Psychology in HRM
  • HRM in Business
  • Businessman Qualities
  • Salespeople Types
  • Health & Business
  • Business Success Rules
  • Stress At Work
Copyright © 2018 BFA - DMCA.com Protection Status .