A cooperative (also co-operative or coöperative; often referred to as a co-op or coop) is defined by the International Co-operative Alliance's Statement on the Co-operative Identity as 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[1]. The International Co-operative Alliance (ICA is a non-governmental Co-operative Federation or more precisely a Co-operative union representing Co-operatives The Statement on the Co-operative Identity, promulgated by the International Co-operative Alliance (ICA defines and guides co-operatives worldwide A business (also called firm or an enterprise) is a legally recognized organizational entity designed to provide goods and/or services to A cooperative may also be defined as a business owned and controlled equally by the people who use its services or who work at it. Cooperative enterprises are the focus of study in the field of cooperative economics. Co-operative economics is a field of Economics, Socialist economics, Co-operative studies, and Political economy, which is concerned with Cooperatives have a sponsored top-level internet domain .coop, which identifies legally registered or recognized co-operatives.
Although co-operation as a form of individual and societal behaviour is intrinsic to human organisation, the history of modern co-operative forms of organising dates back to the Agricultural and Industrial Revolutions of the 18th and 19th centuries. A consumers' cooperative is a Cooperative business owned by its customers for their mutual benefit. The history of the cooperative movement concerns the origins and history of Cooperatives Although cooperative arrangements such as Mutual insurance, and principles The Industrial Revolution was a period in the late 18th and early 19th centuries when major changes in agriculture manufacturing and transportation had a profound effect on the The 'first co-operative' is under some dispute, but there were various milestones.
In 1761, the Fenwick Weavers' Society was formed in Fenwick, East Ayrshire, Scotland to sell discounted oatmeal to local workers. The Fenwick Weavers' Society was a professional association created in the town of Fenwick East Ayrshire, Scotland in 1761 East Ayrshire ( Siorrachd Inbhir Àir an Ear in Gaelic) is one of 32 Council areas of Scotland. Scotland ( Gaelic: Alba) is a Country in northwest Europethat occupies the northern third of the island of Great Britain. Its services expanded to include assistance with savings and loans, emigration and education. In 1810, social reformer Robert Owen and his partners purchased New Lanark mill from Owen's father-in-law and proceeded to introduce better labour standards including discounted retail shops where profits were passed on to his employees. Robert Owen (14 May 1771 – 17 Nov 1858 born in Newtown, Montgomeryshire, Wales was a social reformer and one of the founders of Socialism New Lanark is a village on the River Clyde, approximately 14 miles (or 2 Owen left New Lanark to pursue other forms of co-operative organisation and develop co-op ideas through writing and lecture. Co-operative communities were set up in Glasgow, Indiana and Hampshire, although ultimately unsuccessful. Glasgow (ˈglæzgoʊ is the largest city in Scotland and third most populous in the United Kingdom The State of Indiana ( was the 19th US state admitted into the union Wildlife Hampshire has wildlife typical of the island of Great Britain In 1828, William King set up a newspaper, The Cooperator, to promote Owen's thinking, having already set up a co-operative store in Brighton. Dr William King ( 17 April 1786 - 19 October 1865) was a British physician and Philanthropist from Brighton. Brighton ( is a town on the south coast of England and with its neighbour Hove, forms the city of Brighton and Hove.
The Rochdale Society of Equitable Pioneers, founded in 1844, is usually considered the first successful co-operative enterprise, used as a model for modern co-ops, following the 'Rochdale Principles'. The Rochdale Society of Equitable Pioneers, founded in 1844 was an early Consumer co-operative, and the first to pay a patronage Dividend, forming the basis for the The Rochdale Principles are a set of ideals for the operation of Cooperatives. A group of 28 weavers and other artisans in Rochdale, England set up the society to open their own store selling food items they could not otherwise afford. Rochdale is a large Market town in Greater Manchester, England England is a Country which is part of the United Kingdom. Its inhabitants account for more than 83% of the total UK population whilst its mainland Within ten years there were over 1,000 co-operative societies in the United Kingdom.
Other events such as the founding of a friendly society by the Tolpuddle Martyrs in 1832 were key occasions in the creation of organised labour and consumer movements. A friendly society (sometimes called a mutual society, benevolent society or fraternal organization) is a mutual association for insurance-like The Tolpuddle Martyrs were a group of 19th century British labourers who were arrested for and convicted of swearing a secret oath as members of the Friendly Society
Although the term may be used loosely to describe a way of working, a cooperative properly so-called is a legal entity owned and democratically controlled equally by its members. Note This Wikipedia entry deals with the legal concept legal person. A defining point of a cooperative is that the members have a close association with the enterprise as producers or consumers of its products or services, or as its employees.
In some countries, there are specific forms of incorporation for co-operatives. Cooperatives may take the form of companies limited by shares or by guarantee, partnerships or unincorporated associations. In the USA, cooperatives are often organized as non-capital stock corporations under state-specific cooperative laws. However, they may also be unincorporated associations or business corporations such as limited liability companies or partnerships; such forms are useful when the members want to allow:
neither of which may be allowed under local laws for cooperatives. Cooperatives often share their earnings with the membership as dividends, which are divided among the members according to their participation in the enterprise, such as patronage, instead of according to the value of their capital shareholdings (as is done by a joint stock company. Dividends are payments made by a Corporation to its Shareholder members A joint stock company (JSC is a type of business entity it is a type of Corporation or Partnership. )
Cooperatives are based on the values of self-help, self-responsibility, democracy and equality. In the tradition of their founders, cooperative members believe in the ethical values of honesty, openness, social responsibility and caring for others. Such legal entities have a range of unique social characteristics. Membership is open, meaning that anyone who satisfies certain non-discriminatory conditions may join. Economic benefits are distributed proportionally according to each member's level of participation in the cooperative, for instance by a dividend on sales or purchases, rather than divided according to capital invested. In Economics, capital or capital Goods or real capital refers to items of extensive value Cooperatives may be generally classified as either consumer cooperatives or producer cooperatives.
A housing cooperative is a legal mechanism for ownership of housing where residents either own shares (share capital co-op) reflecting their equity in the co-operative's real estate, or have membership and occupancy rights in a not-for-profit co-operative (non-share capital co-op), and they underwrite their housing through paying subscriptions or rent. A housing cooperative is a legal entity—usually a Corporation —that owns Real estate, consisting of one or more residential buildings A housing cooperative is a legal entity—usually a Corporation —that owns Real estate, consisting of one or more residential buildings In financial markets, a share is a Unit of account for various financial instruments including Stocks Mutual funds Limited partnerships A non-profit organization ( abbreviated "NPO" also "not-for-profit" is a legally constituted Organization whose objective is to support or engage
Housing cooperatives come in two basic equity structures:
Members of a building cooperative (in Britain known as a self-build housing co-operative) pool resources to build housing, normally using a high proportion of their own labour. Building co-operatives are Co-operative Housing corporations where Individuals or Families work together to directly Construct their When the building is finished, each member is the sole owner of a homestead, and the cooperative may be dissolved.
This collective effort was at the origin of many of Britain's building societies, which however developed into "permanent" mutual savings and loan organisations, a term which persisted in some of their names (such as the former Leeds Permanent). A building society is a financial institution owned by its members, that offers banking and other Financial services, especially mortgage lending A mutual, mutual organization, or mutual society is an Organization (which is often but not always a company or Business) based A savings and loan association, also known as a thrift, is a Financial institution that specializes in accepting Savings deposits and making Mortgage Nowadays such self-building may be financed using a step-by-step mortgage which is released in stages as the building is completed. A mortgage is the pledging of a property to a Lender as a security for a Mortgage loan.
The term may also refer to worker co-operatives in the building trade.
A retailers' cooperative (known as a secondary or marketing co-operative in some countries) is an organization which employs economies of scale on behalf of its members to get discounts from manufacturers and to pool marketing. Marketing cooperative links here see also Agricultural marketing cooperative A retailers' cooperative is a type of Cooperative Marketing cooperative links here see also Agricultural marketing cooperative A retailers' cooperative is a type of Cooperative It is common for locally-owned grocery stores, hardware stores and pharmacies. Customer divider barjpg|thumb|In supermarkets sellers periodically change prices for classes of goods in response to market conditions rather than negotiating the price of each good Hardware stores sell Hardware: for instance Fasteners keys, locks, Hinges Wire, chains Plumbing Pharmacy (from the Greek φάρμακον 'pharmakon' = drug is the Health profession that links the Health sciences with the chemical sciences In this case the members of the cooperative are businesses rather than individuals.
The Best Western international hotel chain is actually a retailers' cooperative, whose members are hotel operators, although it now prefers to call itself a "nonprofit membership association. Best Western International Inc claims to be the world's largest Hotel chain with over 4000 hotels in " It gave up on the "cooperative" label after some courts insisted on enforcing regulatory requirements for franchisors despite its member-controlled status. Franchising refers to the methods of practicing and using another person's Philosophy of business.
A utility cooperative is a public utility that is owned by its customers. A utility cooperative is a type of Cooperative that is tasked with the delivery of a Public utility such as Electricity, Water or Telecommunications A public utility (usually just utility) is an organization that maintains the Infrastructure for a public service (often also providing a service using It is a type of consumers' cooperative. In the US, many such cooperatives were formed to provide rural electrical and telephone service as part of the New Deal. The New Deal was the name that United States President Franklin D See Rural Utilities Service. The Rural Electrification Administration ( REA) was an agency of the United States federal government created on May 11, 1935 through
A worker cooperative or producer cooperative is a cooperative that is owned and democratically controlled by its "worker-owners". A worker coperative is a Cooperative owned and democratically controlled by its employees A worker coperative is a Cooperative owned and democratically controlled by its employees There are no outside owners in a "pure" workers' cooperative, only the workers own shares of the business, though hybrid forms in which consumers, community members or capitalist investors also own some shares are not uncommon. Membership is not compulsory for employees, but generally only employees can become members. However, in India there is a form of workers' cooperative which insists on compulsory membership for all employees and compulsory employment for all members. That is the form of the Indian Coffee Houses. The Indian Coffee House is a Restaurant chain in India, run by a series of Worker co-operative societies This system was advocated by the Indian communist leader A. K. Gopalan. Ayillyath Kuttiari Gopalan Nambiar, popularly known as A K Gopalan or AKG, was an Indian communist leader
Business and employment co-operatives (BECs) are a subset of worker co-operatives that represent a new approach to providing support to the creation of new businesses. Business and Employment Co-operatives (BECs represent a new approach to providing support to the creation of new businesses Like other business creation support schemes, BECs enable budding entrepreneurs to experiment with their business idea while benefiting from a secure income. The innovation BECs introduce is that once the business is established the entrepreneur is not forced to leave and set up independently, but can stay and become a full member of the co-operative. The micro-enterprises thus combine to form one multi-activity enterprise whose members provide a mutually supportive environment for each other.
BECs thus provides budding business people with an easy transition from inactivity to self-employment, but in a collective framework. They open up new horizons for people who have ambition but who lack the skills or confidence needed to set off entirely on their own – or who simply want to carry on an independent economic activity but within a supportive group context.
A particularly successful form of multi-stakeholder cooperative is the Italian "social cooperative", of which some 7,000 exist. An Italian social cooperative is a particularly successful form of multi-stakeholder Cooperative, of which some 7000 exist "Type A" social cooperatives bring together providers and beneficiaries of a social service as members. "Type B" social cooperatives bring together permanent workers and previously unemployed people who wish to integrate into the labour market.
Social cooperatives are legally defined as follows:
A good estimate of the current size of the social cooperative sector in Italy is given by updating the official ISTAT figures from the end of 2001 by an annual growth rate of 10% (assumed by the Direzione Generale per gli Ente Cooperativi). This gives totals of 7,100 social cooperatives, with 267,000 members, 223,000 paid employees, 31,000 volunteers and 24,000 disadvantaged people undergoing integration. Combined turnover is around 5 billion euro. The cooperatives break into three types: 59% type A (social and health services), 33% type B (work integration) and 8% mixed. The average size is 30 workers.
A consumers' cooperative is a business owned by its customers. A consumers' cooperative is a Cooperative business owned by its customers for their mutual benefit. The Midcounties Co-operative is the fourth-largest co-operative in the United Kingdom. A consumers' cooperative is a Cooperative business owned by its customers for their mutual benefit. Employees can also generally become members. Members vote on major decisions, and elect the board of directors from amongst their own number. A well known example in the United States is the REI (Recreational Equipment Incorporated) co-op, and in Canada: Mountain Equipment Co-op. Mountain Equipment Co-op ( MEC) is a Canadian Consumers' cooperative, which sells outdoor gear and clothing and has over 2
The world's largest consumers' cooperative is the Co-operative Group in the United Kingdom, which offers a variety of retail and financial services. Co-operative Group Limited, trading as The Co-operative Group, is a United Kingdom Consumers' co-operative, and one of the world's largest consumer-owned The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom, the UK or Britain,is a Sovereign state located The UK also has a number of autonomous consumers' cooperative societies, such as the East of England Co-operative Society and Midcounties Co-operative. The East of England Co-operative Society Limited is the third largest Consumer co-operative in the United Kingdom. The Midcounties Co-operative is the fourth-largest co-operative in the United Kingdom. In fact the Co-operative Group is something of a hybrid, having both corporate members (most other consumers' cooperatives, as a result of its origins as a wholesale society), and individual retail consumer members. A Co-operative Wholesale Society, or CWS is a form of Co-operative Federation (that is a Co-operative in which all the members are Co-operatives in this case
Japan has a very large and well developed consumer cooperative movement with over 14 million members; retail co-ops alone had a combined turnover of 2. 519 trillion Yen (21. 184 billion US dollars [market exchange rates as of 11/15/2005]) in 2003/4. (Japanese Consumers' Co-operative Union. , 2003).
Migros is the largest supermarket chain in Switzerland and keeps the cooperative society as its form of organization. Migros (ˈmiɡro is one of Switzerland 's largest enterprises its largest Supermarket chain and largest employer Nowadays, a large part of the Swiss population are members of the Migros cooperative – around 2 million of Switzerland's total population of 7,2 million[1] [2], thus making Migros a supermarket chain that is owned by its customers.
Coop is another Swiss cooperative which operates the second largest supermarket chain in Switzerland after Migros. Coop (pronounced 'kohp' is a Swiss Cooperative which operates the second largest Supermarket chain in Switzerland after Migros. In 2001, Coop merged with 11 cooperative federations which had been its main suppliers for over 100 years. As of 2005, Coop operates 1437 shops and employs almost 45,000 people. According to Bio Suisse, the Swiss organic producers' association, Coop accounts for half of all the organic food sold in Switzerland.
EURO COOP is the European Community of Consumer Cooperatives. [2]
Agricultural cooperatives are widespread in rural areas. An agicultural cooperative, also known as a farmers' co-op, is a Cooperative where Farmers pool their resources in certain areas of activity An agicultural cooperative, also known as a farmers' co-op, is a Cooperative where Farmers pool their resources in certain areas of activity
In the United States, there are both marketing and supply cooperatives. Agricultural marketing cooperatives, some of which are government-sponsored, promote and may actually distribute specific commodities. An agicultural cooperative, also known as a farmers' co-op, is a Cooperative where Farmers pool their resources in certain areas of activity There are also agricultural supply cooperatives, which provide inputs into the agricultural process. An agicultural cooperative, also known as a farmers' co-op, is a Cooperative where Farmers pool their resources in certain areas of activity
In Europe, there are strong agricultural / agribusiness cooperatives, and agricultural cooperative banks. A mutual savings bank is a Financial institution chartered through a state or federal government to provide a safe place for individuals to save and to Invest Most emerging countries are developing agricultural cooperatives. Where it is legal, medical marijuana is generally produced by cooperatives. Medical cannabis refers to the use of the Cannabis plant as a physician-recommended Herbal therapy as well as synthetic THC and Cannabinoids
Credit Unions provide a form of cooperative banking. A credit union is a Cooperative Financial institution that is owned and controlled by its members and operated for the purpose of promoting thrift providing credit
In North America, the caisse populaire movement started by Alphonse Desjardins in Quebec, Canada pioneered credit unions. For the 19th-century former mayor of Montreal see Alphonse Desjardins (politician Gabriel-Alphonse Desjardins ( November 5 Quebec (kwɨˈbɛk Country to "Dominion of Canada" or "Canadian Federation" or anything else please read the Talk Page Desjardins wanted to bring desperately needed financial protection to working people. In 1900, from his home in Lévis, Quebec, he opened North America's first credit union, marking the beginning of the Mouvement Desjardins. Lévis (officially Ville de Lévis (City of Lévis) is a city in eastern Quebec, Canada. The Desjardins Group (or Mouvement des caisses Desjardins in French is the largest association of Credit unions in North America.
While they have not taken root so deeply as in Ireland or the USA, credit unions are also established in the UK. Ireland (pronounced /ˈaɾlənd/ Éire) is the third largest island in Europe, and the twentieth-largest island in the world The United States of America —commonly referred to as the The largest are work-based, but many are now offering services in the wider community. The Association of British Credit Unions Ltd (ABCUL) represents the majority of British Credit Unions. British Building Societies developed into general-purpose savings & banking institutions with "one member, one vote" ownership and can be seen as a form of financial cooperative (although many 'de-mutualised' into conventionally-owned banks in the 1980s & 1990s). A building society is a financial institution owned by its members, that offers banking and other Financial services, especially mortgage lending Demutualization, also commonly referred to as demutualisation, is the process by which a customer-owned Mutual organization ( mutual) or Co-operative The UK Co-operative Group includes both an insurance provider CIS and the Co-operative Bank, both noted for promoting ethical investment. Insurance, in Law and Economics, is a form of Risk management primarily used to hedge against the Risk of a contingent loss The Co-operative Insurance, formally Co-operative Insurance Society Ltd is a large insurance company based in Manchester in the United Kingdom. Socially responsible investing, also known as sustainable investing or ethical investing describes an Investment Strategy which seeks to maximize both Financial
Other important European banking cooperatives include the Crédit Agricole in France, Migros and Coop Bank in Switzerland and the Raiffeisen system in many Central and Eastern European countries. Crédit Agricole SA (CASA ( is the largest retail banking group in France, second largest in Europe and the eighth largest in the world by Tier Migros (ˈmiɡro is one of Switzerland 's largest enterprises its largest Supermarket chain and largest employer Friedrich Wilhelm Raiffeisen ( May 3, 1818, Hamm (Sieg - March 11, 1888, Heddesdorf currently known as Neuwied, The Netherlands, Spain, Italy and various European countries also have strong cooperative banks. They play an important part in mortgage credit and professional (i. e. farming) credit.
Cooperative banking networks, which were nationalized in Eastern Europe, work now as real cooperative institutions. A remarkable development has taken place in Poland, where the SKOK (Spółdzielcze Kasy Oszczędnościowo-Kredytowe) network has grown to serve over 1 million members via 13,000 branches, and is larger than the country’s largest conventional bank.
In Scandinavia, there is a clear distinction between mutual savings banks (Sparbank) and true credit unions (Andelsbank). The Nordic countries make up a region in Northern Europe called the Nordic region, consisting of Denmark, Finland, Iceland, A mutual savings bank is a Financial institution chartered through a state or federal government to provide a safe place for individuals to save and to Invest A credit union is a Cooperative Financial institution that is owned and controlled by its members and operated for the purpose of promoting thrift providing credit
In some cases, cooperative societies find it advantageous to form co-operative federations in which all of the members are themselves cooperatives. A co-operative federation or secondary co-operative is a Co-operative in which all members are in turn co-operatives. A co-operative federation or secondary co-operative is a Co-operative in which all members are in turn co-operatives. Historically, these have predominantly come in the form of cooperative wholesale societies, and cooperative unions. [3] Cooperative federations are a means through which cooperative societies can fulfill the sixth Rochdale Principle, cooperation among cooperatives, with the ICA noting that "Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures. The Rochdale Principles are a set of ideals for the operation of Cooperatives. The International Co-operative Alliance (ICA is a non-governmental Co-operative Federation or more precisely a Co-operative union representing Co-operatives "[4]
See Also: List of Co-operative Federations
According to cooperative economist Charles Gide, the aim of a cooperative wholesale society is to arrange “bulk purchases, and, if possible, organise production. This is a list of Co-operative Federations For a list of individual Co-operative Enterprises please see List of cooperatives. A Co-operative Wholesale Society, or CWS is a form of Co-operative Federation (that is a Co-operative in which all the members are Co-operatives in this case Charles Gide (1847–1932 was a leading French economist and historian of economic thought. ”[3] The best historical example of this were the English CWS and the Scottish CWS, which were the forerunners to the modern Co-operative Group. Co-operative Group Limited, trading as The Co-operative Group, is a United Kingdom Consumers' co-operative, and one of the world's largest consumer-owned
A second common form of co-operative federation is a co-operative union, whose objective (according to Gide) is “to develop the spirit of solidarity among societies and. For the British co-operative apex organization formerly known as the "Co-operative Union" see Co-operatives UK. . . in a word, to exercise the functions of a government whose authority , it is needless to say, is purely moral. ”[3] Co-operatives UK and the International Co-operative Alliance are examples of such arrangements. Co-operativesUK is "the central membership organisation for co-operative enterprise throughout the UK " a co-operative federation The International Co-operative Alliance (ICA is a non-governmental Co-operative Federation or more precisely a Co-operative union representing Co-operatives
In some countries with a strong cooperative sector, such as the UK, cooperatives may find it advantageous to form a parliamentary political party to represent their interests. A political party is a Political organization that seeks to attain and maintain political power within Government, usually by participating in electoral The British Co-operative Party and the Canadian Co-operative Commonwealth Federation are prime examples of such arrangements. The Co-operative Party is a democratic socialist Political party in the United Kingdom committed to supporting and representing co-operative The Co-operative Commonwealth Federation (CCF (French Fédération du commonwealth coopératif, then Parti social démocratique du Canada) was a Canadian
The British cooperative movement formed the Co-operative Party in the early 20th century to represent members of consumers' cooperatives in Parliament. The United Kingdom is home to a widespread and diverse co-operative movement with over 3 million individual members A consumers' cooperative is a Cooperative business owned by its customers for their mutual benefit. The Co-operative Party now has a permanent electoral pact with the Labour Party, and has 29 members of parliament who were elected at the 2005 general election as Labour Co-operative MPs. The Labour Party is a Political party in the United Kingdom. Founded at the start of the 20th century it has been since the 1920s the principal party of the Results Overview For events leading up to the date of the election see article Pre-election day events of the United Kingdom general Labour Co-operative describes those candidates in British elections standing on behalf of both the Labour Party and the Co-operative Party, based on a national A Member of Parliament, or MP, is a representative elected by the voters to a Parliament. UK cooperatives retain a significant market share in food retail, insurance, banking, funeral services, and the travel industry in many parts of the country. A consumers' cooperative is a Cooperative business owned by its customers for their mutual benefit.