This economic mode has been growing for some decades now and has remained relatively healthy even as our economy rocked back and forth with the times. We visited Wiki.answers.com/Q and downloaded the following and added our commentaries. Advantages
- Act as 'schools of democracy' due to their democratic member control.
- Inclusive and open membership.
- Facilitate upskilling and capacity building due to their principle of 'education, training and information'.
- Lower economic vulnerability due to risk pooling. And being non-profit, there is less vulnerability to downturns.
- Greater generation of ideas and debate due to existence of multiple owners. Follow-through must be there.
- Allow for greater input into policy dialogues due to their tendency to federate into larger bodies at national and international levels. And enhance international good will among nations.
- Collective action can open up national and international markets, as seen with many examples in the Fairtrade market. Ditto.
- Lower input and distribution costs due to greater economies of scale. Efficiency and greenness in other words.
- Low vulnerability to legal problems
- Provides participants at once with feelings of control and competence along with security and cooperation needed for favorable results.
- Possibility of conflict between members; since all corporations have this problem, this is not a distinctive difference. In fact it is rather the opposite. Coops are less attractive to the psychopathic who feast on wreaking lives and organizations created by others. So this one is actually an advantage.
- Longer decision-making process; This one is often true in practice, but proper organizational procedures can not only eliminate the distinction but turn it to advantage—if smart and cooperative people make up the coop.
- Participation of members required for success; This is as true at the coop level as it is at the national level. Is this a real distinctive disadvantage? We think not.
- Extensive record keeping necessary; Keeping track of who is who and who gets what among member does require extensive record keeping. But is this much of an issue in our day of bar-coding into computerized data bases and report writer?
- Less incentive to invest additional capital. For the selfish-minded dictators? Perhaps, but creative individuals at the floor level can get their ideas heard in a cooperative. It then becomes a group decision via democratic means. In fact, budding entrepreneurs can get valuable training by actively playing roles in their cooperative(s).
- Meeting both co-operative aims and business needs requires complex management. This is true. However, since when do corporations shy away from complexity? With every merger they ask for it. It is inherent in every bank derivative. In fact, the more complex it is, the more they love it. And think about this one: The biggest winners of the 2008 melt-down were those who melted down. They are still too complex to be understood. This one may be a bigger problem for “for profits” than it is for the “not-for profits.”
- They can limit your choice of external finance. This is indeed a distinctive feature. It may or may not ever matter.
- Employment benefits often can't match those offered by other business types. Yes, indeed—for the TOP DOGS.
- Workers' co-operatives can enjoy tax incentives, such as employee share schemes, but most small co-operatives find these too costly to run. Don’t small corporations have this identical problem?
Enough said about the compiler of this list. S/he is obviously biased (On Line, each disadvantage type and the items in each was listed twice!!) So we provide how an opposite bias might look.
Whatever your view, would it not be better and more efficient if we all embraced the cooperative concepts?
Find a Cooperative near you:
Ncb.com (National Cooperative Bank)
Ncba.coop (National Cooperative Business Association)
Posted by RoadToPeace on Sunday, January 22, 2012.