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Success of rural cooperatives.

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Executive Summary

This report looks at co-operatives as a whole. To gain experienced insight into the rural sector co-operatives a number of high level management and directors involved with co-ops have been interviewed. Essentially looking to define the mechanisms operating within co-operatives to ensure their long term success in the rural community.

The Co-operatives section covers what they are, differences between a co-operative and a traditional privately owned company, types of co-ops and why belong to a co-op. Then we discuss the success of co-ops and look at definitions from references and also individual co-ops. The ratios of shareholder vs cash buyer/suppliers of co-ops that were interviewed are shown in a graph. Asking them to define success firstly and then to express ways they measure success and how often these measurements are consulted. Innovation, markets and technology are forever changing and to keep business sustainable co-ops need to embrace these changes.

Co-ops don’t exist without the loyalty of their shareholders and it is one thing to join a co-op initially but what keeps a shareholder loyal and what measures do co-ops take when that loyalty is waivering? Also covered is the two way mechanism of co-op loyalty to the shareholder as that is often questioned by shareholders of producer co-ops when concerned about receiving income for their stock. The power of the individual versus the power of the co-op can be a very powerful factor and has been expressed time and again and can come from any section of the company. Some co-ops have said they place emphasis on it while others have less regard for this factor.

The decisions made by co-ops can be a turning point for them so it is important to understand how they are made, the process used and then also the accountability of those making the decisions. Finally the warning signs of co-op failure are covered. The interviewees have experience with co-ops both as shareholders and as management or directors so know the warning signs to watch for if their co-op is starting to struggle.

Success of Rural Cooperatives – Sarah Heddell