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Source: (consider it)
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Thread: the death of co-operation
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OddJob
Shipmate
# 17591
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Posted
I can understand and respect the purpose of Co-ops in immature markets where traditional owners could be unreasonable and greedy in pricing their goods and/or in their treatment of staff. But as markets mature, more competition brings prices down. There's also more legislation to protect staff now than two or three generations ago.
In today's highly competitive World - in retailing at least - co-ops can seldom match the efficiency and customer pulling power of more traditional structures.
Posts: 97 | From: West Midlands | Registered: Mar 2013
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Enoch
Shipmate
# 14322
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Posted
I don't know whether this brief summary will help, but most co-operatives in the UK are either workers' co-operatives or consumers' co-operatives. Producers' co-operativeslook as though they are different but most are a variety of consumers' co-operative.
In a workers' co-operative, the business belongs to the workers, the people who in an ordinary business would be the employees. The co-operation is going on inside the organisation. It has no bearing or relevance for the public that buys their goods or services.
Usually, they pay themselves wages at the going rate in the sector, and then if there'a any surplus at the end of the year, that's also distributed among them. There are three areas where they often have problems. One is raising capital, because it's normally a principal that those that invest get paid interest on their contribution, but have no opportunity to receive a share of any surplus. The second is that they can end up wasting a dreadful amount of time in management meetings. The third is that they can't always see that if they aren't making a profit, there's nothing to pay themselves their wages from.
Many workers' co-operatives are fairly small. There are quite a lot round here. But John Lewis is one, and is big.
A consumers' co-operative belongs to the people who buy its goods or use its services. It is there to benefit the users. Typically, it's a club for buying things. That doesn't necessarily have any benefits for the position of the staff, who are employed by the users, in the same way as employees in any other business. The Co-op is a consumers' co-operative. Traditionally, the members pay normal prices for things and get a divi on what they buy from it. There are other wholesale ones though that claim that in addition to using market power to get good deals, because they don't have to distribute a profit to shareholders, they can supply goods cheaper to their members than the typical market rate.
Historically, groups of Local Education Authorities used to set up co-operatives to enable their schools to buy educational supplies.
Agricultural co-operatives operate as a club for farmers to buy agricultural stores etc, but often also as a club for selling produce, e.g. milk. That's the bit that makes them look a bit like a workers' co-operative, but they aren't. The benefits are for the members, and they employ ordinary employees to do the work, the same way as any other marketing organisation.
The more usual weakness of consumer co-operatives is that the consumers/producers are primarily interested in some version of 'the rest of their lives' and the staff haven't got a direct interest in the success of the operation. So in a competitive market place, the organisation ends up with less cutting edge than the other players, the sort of thing that has been commented on earlier in this thread.
There's a sort of view in the UK that co-operatives are a more socialist way of doing things, but there's no fundamental reason why that should be so.
The previous government provided a structure for a new sort of entity called a community interest company but there has been almost no take up of this as it's difficult to see what the model can offer that isn't better provided by things that already existed.
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Brexit wrexit - Sir Graham Watson
Posts: 7610 | From: Bristol UK(was European Green Capital 2015, now Ljubljana) | Registered: Nov 2008
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Clint Boggis
Shipmate
# 633
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Posted
quote:
Originally posted by OddJob:
I can understand and respect the purpose of Co-ops in immature markets where traditional owners could be unreasonable and greedy in pricing their goods and/or in their treatment of staff. But as markets mature, more competition brings prices down. There's also more legislation to protect staff now than two or three generations ago.
In today's highly competitive World - in retailing at least - co-ops can seldom match the efficiency and customer pulling power of more traditional structures.
To the extent this is/might be true, isn't it likely to be a result of choosing to deal fairly with staff, customers and suppliers, rather than any ineptitude? A business which puts profit above all else may be able to deal decently and fairly with people but it's not their priority.
Posts: 1505 | From: south coast | Registered: Jun 2001
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