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The Cooperative Business Movement, 1950 to the Present
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Book description

The United Nations declared 2012 the year of cooperatives, emphasizing that there is an alternative to privately owned firms. While greed and mismanagement have caused world financial and economic crises, co-ops offer another type of business for economic activities that is less exposed to aggressive capitalism. This book provides a problem-oriented overview of the development of cooperatives over the last fifty years. The global study addresses the major challenges cooperatives face, such as the organizational innovations introduced to acquire necessary risk-capital and implement growth-related strategies, the wave of demutualization in developed nations and their ability to construct an original consumer politics. The contributors to this volume discuss the successes and failures of the cooperatives and ask whether they are an outdated model of enterprise. They document a wave of foundations of new co-ops, new forms of collaboration between them and a growing trend toward globalization.

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Contents

  • Chapter 7 - Legal Frameworks and Property Rights in U.S. Agricultural Cooperatives: The Hybridization of Cooperative Structures
    pp 175-194
  • View abstract

    Summary

    This chapter deals with a caveat of sorts regarding the quality, availability, and consistency of basic data on the international cooperative movement. Although cooperatives are active in all economic sectors throughout Europe, national cooperative development has varied by country. In England consumer cooperatives are strong; in Germany credit cooperatives dominate. The chapter focuses on the cooperative experience in the United States, Canada, and Japan, and highlights the remarkable story of cooperative business that not only survived, but actually thrived within these economic behemoths. A discussion of the world's cooperative movement would not be complete without mention of cooperatives in China, India, and Brazil. Cooperatives have played a unique role in transitional economies, that is, those that are evolving from central planning to a free market. African cooperatives have been tremendously influenced by cooperative development aid from several northern European and North American cooperative movements.
  • Chapter 8 - The Performance of Workers’ Cooperatives1
    pp 195-221
  • View abstract

    Summary

    This chapter offers a historical survey of the four main co-op sectors such as agro-industry, retail trade, banking and insurance, discussing the comparative advantage of the cooperative form of enterprise in each sector and the different organizational forms developed. Cooperatives in agro-industry are by far the most numerous in the world, from the most advanced economies to the developing ones. When cooperative enterprises started to become better organized by the middle of the nineteenth century, only rural credit banks were developed in the agricultural sector, while cooperatives for land cultivation and, above all, food processing started to spread toward the end of the century. The chapter considers the missing sector and includes a few examples of successful industrial cooperatives which suggest that the conditions for success of cooperation in industry have been indeed quite exceptional during the second Industrial Revolution.
  • Chapter 9 - Organization: Top Down or Bottom Up? The Organizational Development of Consumer Cooperatives, 1950–2000
    pp 222-242
  • View abstract

    Summary

    This chapter explores the historical development of cooperativism in Korea which has cultural characteristics different from those of the Western world. Financial cooperatives began operation in rural areas in 1907, three years prior to Chosun being completely integrated into the Japanese economy, and were extended to urban areas in 1918. No autonomous and civil cooperatives appeared in Chosun until 1920 when a few consumer cooperatives were established in Kyungsung and in Mokpo by some grassroots pioneers pursuing political independence through economic independence. In Korea, state influence on the cooperative sector was to become a permanent characteristic. In the sector of savings and credit cooperatives, there is a strong separation between the agricultural cooperatives of the national agricultural cooperative federation (NACF), CUs, and credit cooperatives (CCs), although they share similar goals and guiding principles, have overlapping membership, and are facing the same stiff competition from commercial banks.
  • Chapter 10 - The Politics of Commercial Dynamics: Cooperative Adaptations to Postwar Consumerism in the United Kingdom and Sweden, 1950–2010
    pp 243-262
  • View abstract

    Summary

    This chapter examines the way in which the international organized cooperative movement tried during the 1990s to make the connection between values and principles. The last revision of the principles, in the 1990s, differed from the earlier approaches because the International Co-operative Alliance (ICA) tried to situate the principles within the context of basic values. The origins of this effort can be traced back to 1978, when delegates to the ICA's Copenhagen Congress wondered if their movement was speaking effectively to modern circumstances. The sources for the cooperative values are very complex, derived from history, many community situations, cultural understandings, bodies of thought, and economic circumstances. The initial work of the 1990s demonstrated that there are commonalities in the values accepted throughout the international movement. Values emerge from reflections about lived experiences, and people and groups with similar convictions can naturally develop different degrees of emphasis on what they believe.
  • Conclusion: The Decisive Factors of Cooperatives’ Future – Their Nature, Longevity, Role, and Environment
    pp 263-276
  • View abstract

    Summary

    This chapter determines why cooperatives failed in the period between 1950 and 2010 and analyzes these failures with a view to establishing whether there are rules to which they were subjected. It compares three corresponding cases: the decline of Western European consumer cooperatives between 1960 and 1985; the failure of Japanese credit cooperatives in the 1990s; and the restructuring of American agricultural cooperatives between 1990 and 2010. In the case of Western Europe, the findings suggest that the decline of consumer cooperatives followed closely the hypotheses that have been put forward by the demand school of thought. The cases suggest that there are some common elements. All of the failures were connected to changing economic conditions that may be described as transitions from situations of market failure to competitive environments, often as a consequence of technological and organizational change, but sometimes as a corollary of shrinking markets and deregulation.
  • Appendix I - Statement on the Cooperative Identity
    pp 277-278
  • View abstract

    Summary

    This chapter addresses the demutualization process in a historical perspective and provides some explanations for its acceleration during the last two decades, as well as its slowdown after the 2008 financial crisis. It lists five clusters of reasons for demutualization: organizational isomorphism; cultural reasons; expropriation by managers; political preferences; and inefficiency or lack of growth perspectives. Connecting the cultural transformation that accompanied and supported privatization with the institutional isomorphism analysis, one could conclude that demutualization occurred where the new ideas of increased competition spread both quickly and deeply. During the seventies and the eighties, many of the cross-sectional studies of mutual and stock financial institutions pointed out the inefficiency of the mutual enterprises. The legal framework played a crucial role not only in allowing or interdicting demutualization, but also in creating an environment that makes demutualization appealing.

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