The World of Co-operative Enterprise 1995

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   This document has been made available in electronic format
           by the International Co-operative Alliance.
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Book Review
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        The World of Co-operative Enterprise 1995
                The Plunkett Foundation

         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
United Kingdom

Tel: 01993 883636, Fax: 01993 883576
Price Pounds Sterling  16.95.