This document has been made available in electronic format by the International Co-operative Alliance (ICA) 

Dynamics of Co-operative Development (1998)

June, 1998

(Source: Co-op Dialogue, Vol.8, No.1, Jan-June,1998, pp. 1, 3-5)

Dynamics of Co-operative Development

by Dr. Ian MacPherson


(The economic crisis in the Asia-Pacific region has put many businesses into jeopardy but the co-operatives have shown that they have more inner strength to survive not only the recession, but also the competition from the ruthless multi-nationals.

The relevance of the ICA's Co-operative Identity Statement and the Principles of

Co-operative values is all the more important in the changed scenario. The experience of Asia-Pacific Co-operatives has a lot to learn from, for the co-operatives in other regions.

The ICA Regional Office for Asia-Pacific has been propagating the relevance and importance of the Co-operative Principles for long. It has held a number of conferences and workshops on the subject.

This article and a few others were from papers presented at a Co-operative Think Tank Consortium held by the ICA ROAP in the Philippines during February 1998 which, we hope, will be of interest to our readers.




Iwant to talk about some refle-ctions on the principles, the iden-tity and itís complexities for half an hour, but I hope that I can be fairly simple with it.

When a number of us, including Hans, undertook a review of the principles, and tried to understand the values, and the way in which the movement was developing around the world, we found out, in so many ways, how subtle, and how complex, and indeed, how wonderful, the co-operative movement is. And perhaps, one of the things that we donít do enough, is to appreciate the complexity and the intricacy of those organizations. Perhaps, because we live in them so much. And we tend to want to reduce them to rather simple things, and in some ways, we always have to do that. We must reduce

co-operatives to simple ideas, in order to find as to what it is that we want to do, and how we want to do it. But we should never lose sight of the complexity.

Recently, I have been writing about credit unions around the world. Itís a rather interesting task. In the wake of that, and what we saw in the context of the Principles,

I have come up with a way of thinking about them, and the context for how we might consider the ways in which we apply the principles and the values.

I think of it as the dynamics of co-operative organizations. It isnít a finished concept. Itís unfolding as it were. I hope that I can get some feedback afterwards from any of you. I would appreciate it very much. Criticisms are always welcome.



One way of thinking about these organizations is to think about the spheres within which they function. I have come to think that co-operatives function in four main spheres. And you have to think about all four. And if you donít pay attention to them adequately, there is probably going to be some mistakes. And the mistakes would have been made because the spheres have not been given due attention.

Members Ė The Identity Statement, in some ways quite subtly put membership first. If you look at the way in which the principles are worded, the structure of the document itself, there is a lot of emphasis on membership. That, despite the fact, that in many parts of the world, we have not treated our members very well, for all kinds of reasons. But members are at the heart of the Identity Statement. And they should be at the heart of what we do, how we associate with them, how we serve them, how we listen to them. They are very central to our whole reason for being.

And membership is not a simple concept again. And how we deal with members, and how we magnify our relationships with members is one of the great challenges that we have. So a very important, primary sphere of activity is members.

Structure Ė The relationships we have with our structures is extremely important. And I think the structure is essentially two main areas. The structure we have with our fellow co-op organizations, and how we work out that relationship, and how we build on it, and use it, pay attention to it is very important. I also include under structure, the whole issue of government, because we live within structures, imposed by government.

The Identity Statement correctly made the point that we are autonomous organizations. Does it mean that we no longer deal with governments? That is silly. We live in a world in which governments are always important. And we have to be concerned about legislation. We have to be concerned about government policy. We have to be concerned about the way governments are managing our society. And we have to make our voices heard. So structure is a very, very significant part.

Community Ė This is sometimes thought of as a new principle. It isnít a new principle at all. It is a restatement of what had always been, and what should be very significant. It is the social dimension of co-operatives. And I am so pleased and proud, of the way in which, so many movements around the world have taken this one to heart, and have started to rethink their relationships to the community, and what exactly that means.

Management Ė There are two dimensions of management. There is one in which we must always focus, and itís extremely important. And that is the one in which we strive to make efficient, effective organizations. That is an obligation we owe to our members. Itís the best way we can guarantee the future of our organizations.

There is another dimension to management. This is one that has been rather badly looked after in many co-operative movements around the world. And that is the notion of management that brings these all together. And management within a co-operative refers, in my mind, to people who are employed as such. But there are subtle ways in which directors and members are also engaged in the management of their co-operatives.

And so I would put those four spheres as being the ones in which we all work. They define in many ways what co-operative entrepreneurship is. Because it is how we deal in all those four spheres that determines whether or not we are going to be successful.

I would argue too, that in deve-loping our approach to those four spheres, the principles and the values are good guidelines.

The word guidelines is a double-edged one. Those principles are not arbitrary statements. They are not measurements. They are enabling. They are empowering. They point to the right direction. But if you look at each one, they would put pressure on you as a person, and on your organization, to address each of those spheres. And they will give you some suggestions as how you deal with members, how you deal with structure, how management should function and what we do in our community. They are not some finite and perfect statements, or form of judgement.

You may or may not agree that those are the spheres of activities within which co-operatives work.



What determines how we approach those spheres aside from the values and the principles, are essentially perspectives. We tend to bring these perspectives to our

co-operatives, which would help to shape and to influence the way in which we use the principles and the values and spheres.

Movement Ė Maybe not as strong as the other two, but nevertheless important. I donít believe, we have yet a good understanding of what a co-operative movement really represents. There is so much yet to be done. In a sense, it is a universal movement. And one of the common errors is to think that it is European and then applied somewhere else, almost in the wake of empire. I donít think that is totally true. But aspects of that may be true. In other words, there are co-operative institutions and traditions that are basic to any society.

But the movement did start in a structured, organized way in Europe. It was a daughter of the Enlightenment and of the changes that grew in the nineteenth century. It carries most of those elements that came out of that time. But there is an interesting problem

about such a movement in a western society, because there are patterns of thought in

those societies that are not particularly applicable to what co-operatives are all about. The patterns of thought that came out of the eighteenth century was binary. Things were either true or false. The answers were yes or no. There was a search for a kind of universal laws that dominated that kind of thought. There were ideological systems that emerged out of western thought, that were in many ways not friendly to co-operative thought. And so, co-operativism has had a hard time in western thought., and that is not something to be dismissed quickly. And then it was buffeted first by the management structures that we borrowed from the armies in the late nineteenth century. Then it was buffeted by the way in which it was used by the northern empires, which sought to impose co-operatives in the south.

One reason why governments play the role they do in the co-operatives of southern countries is that they unconsciously inherited some of those traditions. The universal British registrar was not particularly beneficial.

I wonít even get into post-modernism in western thought, and the kind of thinking that has characterized so much of the north. It too was not particularly beneficial. In fact, it may be, that the essential co-operative message is more clearly understood in other societies, in other patterns of thought. So movement, nevertheless, is a way of understanding. And it does have its imperatives. Those who belong to the movement will be much influenced in how they think of that sphere. I do not however believe that those are the most prominent or the most common kind of co-operators.

Situational Ė The perspective that people tend to bring come from the situation in which the co-operatives emerged. I am Scottish, Canadian. Co-operatives that emerged in my part of the world, among my people, reflected that, more than anything else. And they reflected the circumstances and the situation, in which the people I know and I belong to, existed.

In co-operatives weíre shaped by that and continue to be so. In fact itís one of the most fascinating thing about co-operatives. Wherever you go in the world, they are such wonderful barometers and insights into their societies.

The situational imperatives are very powerful. The situations will then shape again and influence how people think of the principles, how they think of the values, and how they want to conduct themselves in those spheres.

Adaptable Ė There is another approach, commonly found in the United States, and that is the notion that co-operatives are adaptable organizational forms without a great deal of ideological or philosophical content. If it makes sense for us to do it, weíll do it. There are a lot of co-operatives like that. That too will decide how you think of members. You will probably suggest something about community, if you come from that background. But you will probably have a limited concern about your community.



It occurs to me that co-operatives have different cultures. Co-operatives tend to demonstrate three kinds of cultures. That applies to whatever perspective you come from. And the kind of culture you have will greatly shape how you think of the spheres.

Populist Ė Populism means an approach to organizational behavior, to politics, in which you emphasize democracy, participation, direct involvement, limited use of professionals. Those kinds of co-operatives are everywhere. They have a deep commitment usually, if theyíre functioning well, to membership, a limited use, sometimes even a limited respect, for management. Their notion of structure will mean that they will want organizations that will help them to do minimal set of tasks. Typically, itís education. Typically, itís a bit of government representation.

Populist organizations will often have a deep tie to communities, because these are neighbours and friends, working together within a specific geographic context. So a populist culture, which is a vibrant culture, may be very attractive to you. They have a lot of virtues. It doesnít mean there arenít management issues with populist

co-operatives. It doesnít mean there are no managers. But the dominant force is the volunteer.

Managerial Ė This is a rather complex one that exists on several different levels. But it is a co-operative in which the initiative and the drive comes from management.

Sometimes, when mistakes are made, they will naturally place their emphasis on management issues, and particularly, that dimension of management which looks at efficiency, accounting, marketing, labor relations, but not necessarily, and in fact rarely, at the overall.

They will tend to look a little more critically at members, and maybe want to simply use them as customers and sometimes to manipulate them. And their structures will be very much driven by managerial concerns. Their sense of community will be a marketerís sense of community. And itís not bad. But thatís the characteristic.

Structural Ė This is the co-operative in which the preoccupation is what is the appropriate grand structure. Agricultural co-operatives, typically, have to now be concerned not only about their kind of local markets, but of big markets. They have to think quickly and internationally. So their concern is how to re-structure themselves that they can reach out to many different parts of the world. Financial co-operatives are also often that way, where the big structural issues start to dominate.



Co-ops go through three stages.

Formative Ė When I thought about credit unions, there is a formative stage. In this stage, they had a populist culture. They had a movement or situational perspective. The spheres were ultimately developed to meet the needs of formative credit unions. I think it holds in other types of co-operatives. Maybe another way of looking at it is as the pioneer stage.

National Ė The interesting issue is where you draw it off when suddenly you say that you are in the national stage. But I think whatís important is when a national movement is not just a servant but when it is a driver, and when the national perspective, finally has power, and it has influence. And it is forcing change.

That is a stage that is not easily met in a co-operative movement, because of our emphasis on local control and autonomy. But when that happens, it becomes a national phase.

I think that there are relatively few movements around the world that have reached that stage, because characteristically, co-operatives at the local level will keep the national organizations under pretty tight control. But there is a time when it becomes important that the national organization will have some clout.

International Ė This is the stage into which we are going. Itís not easy because it means transitions, re-thinking spheres, re-organizing, deepening our perspectives, and transforming our cultures, in which we genuinely think of ourselves in international terms and think strategically from an international standpoint. Some parts of our movements are doing that now.

I hope that the dynamics will be useful to you. What I found fascinating, when I did my scribbling on credit unions, was to try to put movements, including the one into which I belong, into that context. When you do that, what is fascinating is that each sphere, perspective, culture, stage, and relationship has its own typical problems and solutions. I would like to write some of that.

I hope that it has not been too hard to digest. I was excited by this as a way to understand. I found it very useful. I hope it will do the same for you.