THE IMPORTANCE OF STUDYING PRINCIPLES AND ECONOMICS OF CO-OPERATIVE AS A QUALIFYING SUBJECT FOR THE AWARD OF OND IN BUSINESS STUDIES
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THE IMPORTANCE OF
STUDYING PRINCIPLES AND ECONOMICS OF CO-OPERATIVE AS A QUALIFYING SUBJECT FOR
THE AWARD OF OND IN BUSINESS STUDIES (BUS 123)
PREFACE
The problems faced by co-operatives and
students studying co-operative Economics stems from their lack of understanding
of the co-operative principles and the uniqueness of the co-operative Business
Enterprise.
In this project the principles of
co-operative were reviewed to enable readers understand the basic concept
underlying the co-operative principles. It analyzed the basic steps to be
taken in the organization of a viable co-operative society, since it
possess a major problem in the co-operative movement.
I hope that co-operators who read
this project will be able to at least be able to organize a successful
co-operative society.
TABLE
OF CONTENTS
Chapter One
Meaning of Co-operative
Co-operative Value
Chapter Two
Principles of Co-operative Business
I.C.A Principles of 1937
Voluntary and Open Membership
Democratic Member Control
Member economic participation
Autonomy and Independence
Education, Training and Information
Co-operation among Co-operatives
Concern for Community
Chapter Three
The Rochdale Pioneers I.C.A
Aim of the I.C.A
I.C.A Membership
Types of membership
1. Collective
membership
2. Individual
membership
3. Ordinary
membership
Rights of members.
Duties of members
Past I.C. A
Congresses
Chapter Four
Introduction
Reasons for joining co-operatives
i.
Economic motive
ii.
Sociological motive
iii.
External pressure
Classification and
Types of co-operatives
Producer
co-operative society/movement.
Chapter Five
i.
Findings
ii.
Recommendations
iii.
Conclusion.
CHAPTER
ONE
MEANING
OF CO-OPERATIVE
The co-operative institution will tell
us that the co-operative institution is about people. It’s about a
business. It is in line with these assertion that various definitions of
this subject have been postulated by some school of thoughts. Whereas
some scholars see co-operative or define co-operative as an association of
person usually of limited means who have voluntarily joined together to achieve
a common Economic goals through the formation of a democratically
controlled business organization, making equitable contribution to the capital
required and accepting a fair share of the risk and benefits of the undertaking
in which the members actively participate.
Other International Co-operative
Alliance (I.C.A) compliments with the view that co-operative is an autonomous
association of persons united voluntarily to meet their common economic, social
and cultural needs and aspirations through a jointly owned and democratically
controlled enterprise.
Furthermore, a co-operative society can
be defined as an enterprise formed and directed by association of users
applying within itself the rules of democracy and directly intended to save
both its own members and the community as a whole.
Finally, according to (Bob-Igwe,
1993:15), he defined Co-operative as a voluntary, evolutionary democratic
process resulting from initiative and enterprise at the “grassroots” by
individuals motivated by the principle of self -help and mutual aid.
From the above definition we can infer
that the co-operative society is basically:-
a)
An association of persons
b)
A union of capital
c)
A common need to solve a mutual problem (self help.)
Co-operative Value.
Values are basic conceptions of what is
good or bad, a standard for behaviour and quicker for action when properly inculcated.
The I.C.A in 1995 amended the 1966 principles of co-operatives, the principles
were derived from co-operative values which clearly states the co-operative
attitude to social and economic life which distinguishes them from other forms
of business.
When we understand the co-operative
values, then we can understand the nature of co-operatives. Co-operative
values are stated by the I.C.A in 1995.
a)
Self-help
b)
Democracy
c)
Equality
d)
Equity
e)
Solidarity
f)
Honesty
g)
Openness
h)
Social responsibility
i)
Caring for others.
These values can be divided into two
parts namely:
A)
Organization related values.
B)
Moral behaviour related values.
The first set of values deal with the
happenings inside the co-operative complex, which relates to the effectivity
and efficiency in the co-operative society. While the second group of
values are concerned with what is good and what is bad.
Self-Help:- Basically
a co-operative is an association of persons who come together to solve a common
problem which they cannot solve on their own. The idea of self-help
springs to mind immediately, the need for them to assist one another in solving
an immediate problem and not rallying on the government or other external
bodies to come to their aid. These doesn’t take out the possibility of it
getting external assistance. They can of course enjoy that through their
joint effort – a self-help.
Democracy:- In
the co-operative society each member has only one vote irrespective of his
contribution to the organization in capital and effort. This originated
from the Rochdale Pioneers and was an attempt at safeguarding the organization
from their multiple share holders who may tend to dictate the tune for running
the co-operative business enterprise.
Equality:- Without
any discrimination of sex, race, religion, politics, creed, social status and
economic class, men are equal. In the conduct of the affairs of a
society, members are regarded as equals and treated as such. In simple
analysis, equality entails same right to participation, right to be informed,
right to be heard, right to be involved in decision making and executive
work. The value of equality recognizes the importance of all members not
minding their social status or economic contribution to the society.
Equity:-
While the society tends to recognize all their members as being equal, it would
also be unfair not to acknowledge the fact that some members may have played
very active role for the success of the co-operative business through high
patronage, higher capital contribution. According to Onuoha, equity means
proportional equality. This is usually represented in percentages for
instance, 10 percent of shareholding of patronage, etc.. what is being
emphasized here is that all will not benefit equally but one should benefit to
the extent of his/her involvement in the society.
Furthermore, equity also relates to how
their parties are treated. By this I mean how employees, suppliers,
creditors and other non-member customers are handled by the society. The
rule of equity means that each of these receives a fair share of their
industry. Co-operative wealth or earnings must be distributed on the
basis of one’s contribution.
Solidarity:- The
most important co-operative value is self help while the second most important
is solidarity. Solidarity simply stated means unity, interdependency and
mutual support. They need to stand together to be able to carry out
decisions which have been jointly taken by the members of co-operative.
Alone members would be unable to stand but united they stand strong.
Honesty:- Honesty
has always been applied in the running of the co-operative enterprise.
The Rochdale Pioneers made it one of the rules when they insisted on sales of
pure and unadulterated goods. The value states that members of the
co-operative and their officers should be honest in their transactions with the
co-operative business enterprise clearly stating all their transactions for
members accordingly.
Openness:- Co-operative
society is a social group, not a secret society or a cult. It is also a
public organization. Therefore openness states that the members of the
co-operative should give clear statement of their transaction, which should be recorded
and made it available to all members on demand to inspect, commend or
criticize.
For many co-operatives in Nigeria, one
major problem has always been mismanagement characterized by abuse of
office by officers, embezzlement of funds, fraudulent conversion of
associations property to personal use, etc. if the co-operative books are
recorded accurately and kept open for inspection, the likelihood of these sharp
practices occurring will not emerge, for fear of being found out immediately
the books are inspected on demand by any member.
Social
Responsibility:- For hundreds of years age,
co-operatives being people oriented have learnt to be socially responsible and
environmentally friendly. Today, in Nigeria, many multi-national
corporations still refuse to comply with corporate social responsibility
stipulations. For instance, we are all aware of the persistence youth
restlessness in the Niger-Delta area of Nigeria as a result of environmental
recklessness on the part of these multi-nationals. We can also say social
responsibility, the co-operative has over the years been used by members,
government and non-governmental agencies to address the issues of social
development. This is because of the social nature of the
co-operative-society. They have a social obligation in solving the social
problem of their members and non-members as well.
Caring for
others:- Both within the co-operative enterprise
and outside co-operative provide for the needy.
The value encourages the co-operative
to reach out to people other than the members of their co-operative according
to their financial ability.
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