It Is Your Business: A Fresh Look at the Cooperative Business Model


by Amy K. Curits, Contributing Writer

Amy Curtis

Before this summer, I didn’t think much about the specifics of the cooperative business model — or any other type of business model, for that matter. Then, as a part of my summer internship, I was asked to do a Perspective piece for the October issue of Cooperative Living, since October is Cooperative Month.

While I still don’t pretend to be an expert on the subject, I do have a much better understanding of business models than I did before.

Companies strive to succeed financially. The traditional business model is made up of shareholders and customers. Companies will ultimately make decisions based on what is deemed “best” for the company. This means that in all likelihood, the desires of shareholders will likely take precedence over the customers’ desires.

However, the cooperative business model has a distinct advantage over others. As a member of a cooperative, you are truly a part of the company. With a cooperative’s community-centric structure, the potential for active involvement is there. You are not just another customer.

In a cooperative, the customer and the shareholder are one and the same. Therefore, no balance of power between shareholder and customer need exist. Customers are much more able to have a say in what they expect, need, and want from their cooperative. In turn, their cooperative is able to make decisions that truly have the customers’ best interests in mind, without the ulterior motives that separate shareholders would induce.

The seven core principles of the coopera­tive business model are:

1.  Voluntary and Open Membership;

2.  Democratic Member Control;

3.  Members’ Economic Participation;

4.  Autonomy and Independence;

5.  Education, Training, and Information;

6.  Cooperation Among Cooperatives; and

7.  Concern for Community.

These ideas set cooperatives apart from other business models, with an emphasis on member participation at every level.

Cooperatives are founded on these principles promoting membership involvement and community. The principles date to 1844 and Britain’s Rochdale Society, the first modern cooperative business. These same basic principles continue to guide utility cooperatives today.

Discrepancies are bound to arise no matter what the business model; a utopian system in which everyone is fully content all of the time is simply not realistic, or even possible.

In reality, not everyone can be satisfied 100 percent of the time. That statement is true on many different levels.

But as a hybrid customer AND shareholder in a cooperative, you have the power to assert your opinion and to raise your concerns and needs.

As a member-consumer, in the cooperative business model your opinions carry more weight than they would in a traditional business model; you have the potential to be an influential and active shareholder.

If you are passionate about an issue, then you can voice your opinions and concerns, and they should be seriously taken into consideration. Within the cooperative business model, I think that that is much more likely to happen, and is certainly achievable. In a co-op, the potential for genuine, positive change is there.

Apathy, among other factors, can flaw any system. It’s important to be responsible for your own actions.

We all share the planet and we should uphold a level of environmental stewardship, strive to preserve resources, limit waste, and be environmentally responsible about our energy production and use.

Not everyone can serve on a co-op’s board of directors. But everyone can turn off the light when they leave a room. Everyone can take shorter showers. Everyone can adjust their thermostat settings a few degrees warmer in the summer and cooler in the winter.

Small personal changes CAN make a difference. The amount of energy conserved on a personal level may seem insignificant. However, if everyone participates, and that small individual amount of energy conserved is multiplied by the millions of cooperative members and their households, then the amount of energy conserved would prove to be quite significant.

Participation, after all, is the very fabric of the cooperative business model.

Amy Curtis is a senior at James Madison University. She is currently studying in London.

What's Your View?

This column is meant to provoke thought, so we welcome reader comments. Send e-mail to: (please enter “Perspective” in subject line), or send written responses to Cooperative Living, Perspective, Attn. Bill Sherrod, P.O. Box 2340, Glen Allen, VA 23058-2340. 




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