cooperatives

For management learners globally

Co-operatives

In 1844 28 weavers from Rochdale set up a society to buy food and sell to its members at the same price that the food would be sold to shops. This is known as selling wholesale and enabled the weavers to combat the high food prices that had prompted them to set up their society. This type of society is known as a co-operative and allowed the members to buy food cheaper than that sold in the shops.

Co-operatives are governed by the Industrial and Provident Societies Acts. Profit made by the co-operative is distributed amongst the members (owners) of the co-operative. It is estimated that by 1990 there were 80 co-operatives in existence. A well known example of a co-operative is Co-Op (Co-Operative Wholesale Society) which now trades as the supermarket chain Co-Operative Pioneer or as Leo’s.

If a Co-Operative is not registered as a Co-Operative society under the Industrial and Provident Societies Acts it will be known as a Co-Operative venture. Co-Operative ventures can take many forms including the Trading Co-Operative and the Workers Co-Operative. The former allows groups of individuals to pool their resources to store and distribute their produce in a manner that they would not be able to do by themselves. A Workers Co-Operative is created when the workers of a business (usually a struggling business) take over the ownership and management of the business. By undertaking the management and ownership the workers hope to save the business and their jobs.