Book Reviews

BOOK REVIEWS

The World of Co-operative Enterprise 1995
reviewed by Keith Brading, President, UKCC and former Chief Registrar of
Friendly Societies, UK.

For the 1995 edition of The World of Co-operative Enterprise the Plunkett
Foundation has identified three areas in which social, economic and
political changes have fundamentally affected co-operatives - namely (1)
the vast growth in the size of membership of many important societies, (2)
the emergence of effective governance as a vital factor in all
co-operatives and (3) the need for examination and, if necessary, the
up-dating of co-operative legislation.

These three themes are topical, world-wide in their impact and raise issues
which are inter-linked. The Plunkett Foundation has performed for us all
the valuable service which it is so well-placed to provide. With its
world-wide experience it has been able to commission and bring together 33
separate articles by experts and practitioners in which facts and issues
are presented and analysed, and possible solutions are suggested and
examined. The Plunkett Foundation rightly emphasises that these solutions
must be explored and perfected if the merits of co-operation are to be
carried successfully into the 21st century.


Importance of Member Involvement Emphasised

In the part of the World Book concerned with the issues raised by the
vastly increased numbers of members in many societies, some of the articles
reflect the experience gained in a current project sponsored by the
International Co-operative Alliance. This project is designed mainly to
examine techniques for obtaining increased participation by the membership.
The project draws on the experience of successful co-operatives in Canada,
Italy, Japan, Sweden and Scotland. The method of development of the
democratic theme not surprisingly varies from country to country, but on
analysis of the techniques used seems to indicate two main avenues of
development. In some instances the emphasis lies upon the provision of a
suitable structure whereby members are brought into a scheme which enables
and encourages, in effect, participation through discussion and voting. In
other cases more importance is attached to the provision of activities,
both traditional and innovative, whereby members' democratic participation
can be stimulated. Within these schemes there is also an emphasis on the
need to secure the interest of new, younger members. On balance and on the
evidence contained in the articles on these subjects the "activities and
dialogue" approach seems to be generally preferred to the "structure and
voting" approach as a means of securing democratic participation.

In this short review it is difficult to examine all the possibilities or to
mention specifically more than a few articles. But J.G. Craig's article
"Making Membership Meaningful in Large Co-operatives" contains a valuable
account of the methods and systems found in the countries participating in
the ICA Project (which will be considered at the Centennial Congress of the
ICA later this year in Manchester.)

An article by Iain Macdonald on the Scottish Co-op experience shows that
here the emphasis by the CWS was more upon membership structures. This
undoubtedly gives more accountability to members and, possibly, a firmer
indication of their powers. Mr. Macdonald also explains convincingly the
vital necessity of training schemes to accompany the setting-up of such
structures.

A stimulating and informative contribution on the American experience comes
from the pen of Professor Ann Hoyt of the University of Winsconsin Center
for Co-operatives. It contains a brief account of the various US
co-operative sectors and raises the possibility of extending co-operative
enterprise into other fields. Professor Hoyt quotes, in support of her plea
for the supremacy of the member/customer, the operating policy of Stu
Leonard, "owner of the self-proclaimed world's largest dairy store" in
Norwalk, Connecticut, and for many years the US guru of effective food
retailing:

"Rule 1: The customer is always right.
 Rule 2: If the customer is ever wrong re-read Rule 1"!

All the contributions in this section of the World Book should be studied
if only to sample the vast range of suggestions, not all of which,
admittedly, are readily adaptable to UK co-operatives. Clearly, tea
ceremonies, calligraphy and language learning are activities with a limited
appeal; but a whole host of other possible activities will provide examples
of what may be universally suitable. There are however two common themes
which the managements of all co-operatives cannot ignore. First is the
need, which almost all contributors emphasise, for properly organised
co-operative training for members and staff. Secondly is the need to bear
in mind that the ultimate purpose of member-participation and
member-democracy is, in the case of consumer co-operatives, to ensure a
loyal member-customer relationship.


Effective Governance Critical for Healthy Co-operatives

Part I of the book contains articles which can all be seen to be addressing
a common and well-understood theme. In Part II which contains the articles
on Effective Governance in Co-operatives it is less easy to discern a
common purpose at work. This may well be because, to use the words of the
preface, "In the international context of this book 'effective governance'
is a term fresh to many". But Moira Lees's article on "Corporate Governance
in European Co-operatives" is a good introduction to the relevance of the
subject. She reflects upon the fact that, as discussed in Part I, active
and participative membership is a pre-requisite for the healthy governance
of a co-operative; but lack of participation by the wider membership
adversely affects the workings of the board of directors and its effect
gradually becomes cumulative.

Several of the articles in Part II take the opportunity to explain the
problems which face co-operatives after removal of state control in various
forms. In Malaysia, for example, co-operatives have been set free by recent
legislation from the almost complete control and supervision of their
policies by government to which they were previously subjected, so that in
theory at least members may now be able to exercise better controls on
management etc. The article by Susan Tho Lai Mooi and Sushila Devi will be
of considerable interest to those 'former colonial' states in which the
legislation put the co-operatives firmly under the direction of government.
It is interesting to find that Malaysia was induced to lessen that power as
a result of failures and fraud which the lack of proper member-control had
allowed to develop.

Not surprisingly perhaps, because of the recent interest shown in the
subject in this country the best articles on Effective Governance are those
contributed by UK authors. Professor Brian Harvey sets out lucidly and with
precision the position as it affects co-operatives. His article should be
studied by all co-operators here and in other countries who may still be
uncertain what good governance involves and what results may flow from it,
or from its absence. In "The Power Dimension in Corporate Governance" Ted
Stephenson contributes an article which reflects his great practical
knowledge and understanding of the subject and the problems to which
directors must pay special attention particularly in their interaction with
management.

The article by David Thirkell ("People: the Key to Good Governance")
performs an equally useful function particularly for agricultural
co-operatives.

Perhaps the most depressing account in this section is that entitled
"Co-operatives in the Transformation of Czech Agriculture". Co-operatives
which until 1948 had traditionally occupied a dominant place in
Czechoslovakia now face virtual extinction, partly because of the effect of
40 years subjection to communist rule and partly because of the failure of
post-communist governments to encourage or even countenance the revival of
co-operative philosophy. It is to be hoped that the international
co-operative community may help find a way of overcoming this failure.


Trends in Co-operative Legislation

The first three articles in Part III of the World Book (Trends in
Co-operative Legislation)  in fact deal with problems posed from the
transition from the command economy approach to the more participating
approach of the true co-operative. The introductory article by Ashish Shah
provides a perceptive approach to a member-orientated scheme of legislation
from one which has grown up under state control. It is in my view one of
the best articles in the book and should be seized upon and read by all
co-operators in developing countries.

Of the other seven contributions to Part III nearly all review the position
and prospects of legislation in each of the countries of their respective
authors. All will repay study, but there are two which have a particular
interest for UK co-operators. One is the article on "Co-operative Law
Reform in the United Kingdom" by Ian Snaith; the other is "Trends in
Australian Co-operative Legislation" by Garry Cronan of the New South Wales
Registry of Co-operatives. Ian Snaith outlines some of the major issues
which emerge from the deliberations of the Legal Working Group of the
United Kingdom Co-operative Council. The significance of the N.S.W.
position is that recent legislation in that State (N.S.W. Co-operatives Act
1992) deals with some of the main issues addressed by the UKCC Legal
Working Group. The N.S.W. Act came into force in May 1993 and it will be of
interest to follow the progress of its practical application.


Review of UK Co-operative Sectors

The World of Co-operative Enterprise 1995 concludes (in Part IV) with a
Review of Co-operation in the United Kingdom. Each of the main co-operative
sectors is reviewed. The fortunes of the Worker Co-operatives are described
in some detail with useful accompanying tables of statistics by Chris
Cornforth and Alan Thomas of the Open University Centre for Co-operative
Management. Although the number of co-operatives has fallen, the number of
jobs in working co-operatives has continued to rise, largely due to the
addition of a few large co-operatives, mainly in the transport industries.

In a thoughtful and interesting article on the "UK Retail Co-operative
Labyrinth", Desmond Hopwood of the Management School, Lancaster University,
provides a revealing overview of the retail co-operative scene.

David Rodgers' article on "Developments in UK Housing Co-operatives"
provides a reminder of the urgent need for the provision of co-operative
housing, which becomes more and more relevant as a part of the solution to
the nation's housing problems. It also records, as it is bound to, the
difficulties and problems placed in the way of housing co-operatives. It is
to be hoped that at the right time (and sooner rather than later) the
support of the whole co-operative movement can be mustered to plead the
cause of this most important and most neglected sector.

"Credit Unions in Great Britain 1993-94" by Peter Bussy chronicles the
growth and operational improvements in credit unions, with an interesting
analysis of where the strengths and weaknesses lie. The continued growth is
beginning to bring in sight the time when the credit union sector is
self-sufficient in the provision of its administration and operational
requirements. Here again, this growth could undoubtedly be advanced by the
support and co-operation of the co-operative organisations.

In fact the principle of "Co-operation Among Co-operatives" becomes
increasingly important. Throughout the 1995 World of Co-operative
Enterprise readers will find plenty of instances to support the
implementation of that principle.

It is appropriate therefore that the whole work should conclude with an
article by Peter Walker, Executive Director of the UK Co-operative Council.
One of the main reasons for the formation of the UKCC, and for its
continued operation, is to promote co-operation among co-operatives and to
provide a forum for the discussion of all those many matters which
co-operatives have to face, and which are more effectively faced together
and in common. The article provides a useful reminder of the matters on
which the UKCC will, with the assistance of all sectors be focusing
attention and seeking action in the near future.

The Plunkett Foundation plays, and has long played, a very significant role
in that field on the wider international scene. It not only stimulates
thought, it provides the facts and rehearses the arguments which are
relevant to the whole wide spectrum of co-operative endeavour. The World of
Co-operative Enterprise is, in my opinion, one of the best ways in which
all those interested, whether as practitioners, advisers or academics, are
able to keep abreast of all that is relevant to the great cause of
co-operation.

The World of Co-operative Enterprise 1995 is available from:

The Plunkett Foundation
23 Hanborough Business Park
Long Hanborough
Oxford OX8 8LH
Tel: 01993 883636       Fax: 01993 883576                        Price stlg16.95.


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The Co-Operative Opportunity

"An idea whose time has come again" - new book takes fresh look at the
co-operative way of business

Co-operative businesses in the UK have a turnover in excess of stlg10 billion
and range from giant retailing, banking and insurance organisations to
farming, healthcare and craft co-operatives that collectively employ more
than 140,000 people.

Worldwide there are more than 200 organisations belonging to the
International Co-operative Alliance with an estimated membership of 700
million individuals in more than 100 countries.

Yet although it has been around for at least 150 years, the co-operative
form of enterprise is still not generally well understood - not only by
consumers but chartered accountants, bankers, solicitors and other
professionals, such as economic development officers and teachers,
according to a new book published by the United Kingdom Co-operative
Council.

A representative body and "think tank" embracing all types of co-operative
business in the UK, the UKCC is headed by the prominent West Country farmer
and Labour peer, Lord Carter, who hopes that the book will arouse fresh
interest in co-operation as a fair and democratic way of doing business
which protects consumers' interests and gives them more control over the
goods and services they buy.

The Co-operative Opportunity* provides the most comprehensive and
up-to-date account of co-operative enterprise at national and international
level and is illustrated with facts and figures to demonstrate the progress
achieved since a band of cloggers, tailors and weavers set up their tiny
store in Rochdale, Lancashire, in 1844 with an idea that was to grow into
the modern co-operative movement.

The 150th anniversary celebrations were attended by co-operators from as
far afield as the USA, Canada, Japan and Australia and culminated in
December with an official visit to Rochdale by the Queen and the Duke of
Edinburgh.

Far from being a dry, historical record, however, The Co-operative
Opportunity presents a detailed examination of co-operation in all its many
forms and asks business leaders and opinion formers to consider if its
message is not increasingly relevant to the needs of modern society.

"Many people are very disenchanted with the workings of big business and
its remoteness from consumers", said Lord Carter, "The Co-operative
Opportunity makes the case for co-operation as a business model whose time
has come again and, as such, may well stimulate fresh thought in tackling
many of the economic and social issues confronting today's society."

*The Co-operative Opportunity is published by the United Kingdom
Co-operative Council at stlg12.95, including post and packing (airmail extra),
and is available from Holyoake Books, Holyoake House, Hanover Street,
Manchester, M60 0AS.
ISBN - 0 85195 216 X 120 pages.
For further information contact:
Peter Walker, Chief Executive, UKCC, Tel: 0161-829 5290 or
David Smith, Public Relations Manager, The Co-operative Bank, 0161-829 5397
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Ground Level Development
NGOs, Co-operatives and Local Organisations in the Third World
Hans Holmen and Magnus Jirstroem (eds)

Local, non-governmental organisations are increasingly presented as a
solution to poverty and under-development in poor countries. Expectations
on their potentials as development vehicles are, however, often exaggerated
and unrealistic. This anthology tries to identify potentials and
limitations of local organisations in the development process. It also
seeks to identify fields and topics where more research is needed for a
better assessment of what can realistically be expected from local
organisations in Third World development.

The book contains five papers concerning the role of local organisations in
Third World rural development. Three papers are of a more general and
theoretical nature and two papers are case-studies from Malaysia and the
Philippines. Together they offer a critical inquiry into the theory and
practice of rural organisation-building.

Although differing with respect to setting and emphasis, all papers share a
common view on the importance of local organisations for rural development
in the Third World. However, they also share the view that local and
non-governmental organisations cannot solve the whole problem of
underdevelopment. Conventional LOs, particularly co-operatives and similar
constructs, often fail to benefit the most vulnerable groups and/or strata.
For these growing segments of the Third World's population new approaches
and new forms of organisation will be needed.

Ground Level Development
NGOs, Co-operatives and Local Organisations in the Third World
Hans Holmen and Magnus Jirstroem (eds) is published by the Lund University
Press at SEK 192:- (excluding VAT) and is available from:
Denmark: Svensk-Norsk Bogimport A/S, Esplanaden 8 b, DK-1263 Copenhagen
K.Norway: Wennergren-Cappelen A/S, Boks 738, Sentrum, N-0105 Oslo 1.
Great Britain: Chartwell-Bratt Ltd. Old Orchard, Bickley Road, Bickley,
Bromley BR1 2NE.

ISBN - 91-7966-295-1 140 pages.

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Gendai Seikyo-ho no Riron (Modern Theory of Japanese Consumer Co-operative)
Miyasaka Tominosuke (Ed.) Tokyo, 1994 (yen2,800)

In Japan there are individual laws for each different type of
co-operatives, such as the Agricultural Co-operative Law, Medium and Small
Enterprise Co-operative Law, Consumer Co-operative Law. The legislative
basis for consumer co-operative societies had been in force in general
under the Industrial Association Law until the Consumer Co-operative Law
was passed after World War Two in 1948.

This book, as a collective effort by the study-group on co-operative system
which is organised by CCIJ, focuses on the present Consumer Co-operative
Law and how it affects co-operative movement and management of
co-operatives. Therefore, it is not a simple guide of the Law nor a
monograph which has nothing to do with practical matters.

It challenges to analyze a number of problems that co-operative movement in
Japan is facing now. For instance, local limitations of co-operative
operation, prohibition of non-member business, member participation and
business connection with related companies are the current issues. This
book consists of Part I `Business, Administration and Legislation' and Part
II `Finance and Taxation'.

Thus, this book is different from those mere commentaries of the Law which
have been published from the early post-war period. It is a first great
work that identifies the point connecting the Law and practical movement.

H. Nakanishi, Researcher