What tasks do Business Co-operative Societies perform?
“These societies spare no effort to remove middlemen from the channel of distribution. The consumer cooperatives supply essential goods and services to the members at a time when there is a dearth of goods in the market.”
The main business aim of cooperative societies is to watch the interests of their members. These societies in this way contribute their bit towards the establishment of an egalitarian society.
The members are provided goods and services at cheaper rates and financial help is also given to them at very low interest rates. A feeling of cooperation is created among members. The societies purchase goods directly from the producers and sell them to the members.
You may question as to what effect would they make when sometimes they are able to provide things at rates that are not significantly lesser than the rates prevailing in the market. Yes, you are right.
But the answer is that in such cases this act of the cooperative societies is more of philosophical nature than being an economic one. You may wonder as to the amount of pressure these societies have to face from other business groups, cartels and politicians for the small bit that they are able to do.
These societies spare no effort to remove middlemen from the channel of distribution. The consumer cooperatives supply essential goods and services to the members at a time when there is a dearth of goods in the market. Even capital goods are procured directly from producers and are supplied to the concerned members.
The members from among themselves elect the management of a cooperative. All members are given equal voting rights irrespective of the number of shares held by them. Every member has equal say in policy formulation.
These associations are based on democratic values. The management of cooperative societies is in the hands of persons elected by shareholders. Some persons are employed to look after the everyday working of the society.
Members take active interest in the working of the societies. So the societies need not spend much on management staff. These societies sell goods and services at nominal process to the members to make up for administrative costs.
Non-members are charged at market rates. The surplus earned by the society is distributed among members on the basis of their purchase. Some part of this surplus is used for welfare of the members.
Author - DeeKay
Tags - Finance, Economy
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