Cooperative is the organization formed by the economical vulnerable including a consumer, small trader, and small producer et cetera. It is managed democratically and aims to contribute to the protection and enhancement its users’ lives.
Unlike a limited company which aims to create as much profits as possible through granting an unspecified number of people the right to become a shareholder, Cooperation is a humane organization consisted of members of union each live in his or her own area. It also gives back the remnants of surplus profits to its members and pursues the elevation of services.
The main difference between a limited company and Cooperative is that whereas the former is a conjunction of capital, the latter is cohesion of human resources. In a limited company, the one shareholder, one vote system applies to its members. Contrastingly, the amount of money invested does not change the one person, one vote system. For a limited company, the more surplus profit means the more allotment to its shareholders. In opposition, Cooperative limits such system to a certain degree.
International Co-operative Alliance (ICA) adopted ‘The International Cooperative Statement on the Cooperative Identity’ in a commemorative meeting celebrating its 100th anniversary in Manchester and presented the value and definition of Cooperation. According to the definition, Cooperation is ‘owned publicly and run democratically so as to provide a business platform through which people desiring to satisfy economical and social needs gather together freely’.
Principles of Cooperative
The principles in this context mean the basic steps to be taken before Cooperative starts living up to its distinctive characteristics. These were firstly enacted in 1937 and have been altered due to the changes in generations (1st amendment – 1966, 2nd amendment – 1995).
Current principles of ICA
Freedom of Entry
Democratic Management
Economical Participation by Members
Autonomy and Independence
Education and Marketing
Cooperation between Cooperation
Contribution to a local community