Gert van Dijk - The Cooperative Enterprise: Practical Evidence for a Theory of Cooperative Entrepreneurship

The Book Series on Cooperative Management provides an invaluable forum for creative and scholarship work on cooperative economics, organizational, financial and marketing aspects of business cooperatives and development of cooperative communities throughout the Mediterranean region and worldwide. The main objectives of this book series are to advance knowledge related to cooperative entrepreneurship as well as to generate theoretical knowledge aiming to promoting research within various sectors wherein cooperatives operate (agriculture, banking, real estate, insurance, and other forms). Scholarly edited volumes and monographs should relate to one of these areas, should have a theoretical and/or empirical problem orientation, and should demonstrate innovation in theoretical and empirical analyses, methodologies, and applications. Analyses of cooperative economic problems and phenomena pertinent to managerial research, extension, and teaching (e.g., case studies) regarding cooperative entrepreneurship are equally encouraged.

More information about this series at http://www.springer.com/series/11891

This Springer imprint is published by the registered company Springer Nature Switzerland AG

The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

The authors of The Cooperative Enterprise have succeeded in collecting and developing the most relevant and modern knowledge of the sector to the interested reader. The text provides a good academic analysis of the relevant theories, but importantly it celebrates the rich practical experiences of the cooperative world. We are well treated with a wide range of illustrations of the recent cooperative business evolutions with a professional insight and analysis of the decision-making. A virgin mind would enjoy a rare view of the cooperative business management, while more experienced individuals could be shown the cooperative logic behind the scene.

The authors celebrate cooperative market orientation, individual commitment and responsibility as well as a dynamic approach to the future development of the sector. Hopefully, this would enable us to bring in those young, talented and professional people that we so much need in the farming sector. Furthermore, developing a training simulation game for farming businesses underlines the importance of this new approach in communicating our cooperative ideas. Involving the African farming community gives us Europeans a new perspective to issues where we have been too complacent.

A word of warning: The Cooperative Enterprise will make you think in a cooperative way. And it is fun to read!

On the one hand, a cooperative is an enterprise that has a strong position in the market and can compete in the market on its own terms. On the other hand, a cooperative is an association of entrepreneurs, each one wanting to have a strong position in the market.

At the core, the cooperative has two goals: the entrepreneurial success of both the group business (the cooperative enterprise) and the member business, whereby the business goals of the member are the prime consideration. This is actually exactly the same as in a democracy, where the interests of the citizen prevail above those of the country. Therefore, cooperatives are similar to both society and business at the same time.

In entrepreneurial terms, a distinctive feature of cooperatives is that they have dual or even multiple goals. This is not simply the goal of the cooperative firm itself, but specifically the goal of the entrepreneurs who brought the cooperative enterprise into being. This creates a two-layered enterprise that has to perform an additional function. It is a corporate vehicle that serves the interests of its members, whether they are suppliers or buyers. To put it more simply, it is all about profitprofit for the members, irrespective of how those members define such profit.

From the perspective of behavioral theory, the firm is postulated as a coalition of participants. The members of the cooperative are both investors/owners and suppliers or buyers. Cooperative management theory is based on how inducements and contributions between the members and the cooperative firm in the different roles are aligned, and on answering the question of what this means for managing the cooperative as a firm as well as a group. Collective decision-making by the group means the development of democratic policy geared to instrumental interests, both monetary and non-monetary. Therefore, the cooperative development is very important for the democratic well-being of a society as a whole.

In this book, we start from the position that under certain circumstances cooperation creates value. Cooperation by businessmen, for instance farmers, however, is not an easy option. Certain conditions must be fulfilled. The first condition is that from the very start cooperators calculate immediate economic advantages. The most common advantage is lowering costs, from economies of scale for example. The second condition is that the members of a cooperative experience a sense of ownership of the cooperative business. As regards the feeling that a members opinion matters, it is important that a member experiences himself or herself to be at an equal distance to where decisions for the cooperative enterprise are made, compared to other colleagues. This is not only a requirement for the general meeting, but also for the eligibility in representative bodies of the cooperative such as the member council. Thirdly, a cooperative is based on solidarity and loyalty. However, there should be room for choice and exit. Free association and cooperative membership definitely should not in any respect be felt as obligatory. Fourthly, the business cooperatives as dealt with in this book generally imply integration of two or more sectors in the supply or value chain. Therefore, cooperatives and their members can only survive if both are eager to be market-oriented. Cooperatives intensify competition, and they should be at the frontiers of efficiency and should stick to soberness in management.