Meaning and Principles of Co-Operative Organisation


The co-operative movement has been necessitated to protect the interests of weaker sections of society. The primary objective of this movement is ‘how to protect economically weaker sections of society’. In all forms of organisation, be it is a sole trade, partnership or joint stock company, the primary motive is to increase profits.

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The businessman tries to promote his own interest through all possible means including exploitation of consumers. The co-operative form of organisation is a democratic set up run by its members for serving the interests of themselves. It is self help through mutual help. The philosophy behind co-operative movement is “All for each and each for all”.


Co-operative societies are voluntary associations started with the aim of service to members. Hubert Calvert says, “Co-operation is a form of organisation where in persons voluntarily associated together as human beings on the basis of equality for the promotion of the economic interests of themselves.”

V. L. Mehta defines co-operation as, “One aspect of a vast movement which promotes the voluntary association of individuals having common economic needs who combine towards the achievement of the common economic end they have in view and who bring into his combination a moral effort and a progressively developing realization is the achievement of economic ends. In fact co-operative movement was started to safeguard consumers from the exploitation of capitalism”. Dr. H.N. Kunzen defines co-operative as “Co-operative is self-help as well as mutual help. It is a joint enterprise of those who are not financially strong and cannot stand on their legs and therefore come together not with a view to get profits but to overcome disability arising out of the want of adequate financial resources”.

Principles of Co-operatives

Some of the principles of co-operative are discussed as follows:


I. Voluntary Membership:

Everyone is at liberty to enter or leave the co-operative society as and when he likes. Nobody is compelled to join a co-operative society. The members are also free to use or not to use the services of the society. Though there is no limit on the membership of the societies, sometimes certain limits are imposed to keep the society as a workable group. Consumer co-operatives, insurance societies etc. may limit membership to a number which is properly manageable. Voluntary member is the main ingredient of co-operation. Everybody willing to join a society is allowed to do so. Voluntary membership has been responsible for the success of co-operatives movement.

II. Political and Religious Neutrality:

The membership of a co-operative society is opened to all irrespective of religion, caste, creed, colour or political affiliation. The co-operative movement can attract a large membership only by staying out of politics where people have divided opinions. Co-operatives represent universal brotherhood and it should not lose its path in political contradictions. There is no place for caste or discrimination in co-operative . The primary aim of co-operatives is to serve its members. So, co-operative societies are neutral as far as political and religious affiliations are concerned.


III. Democratic Management:

The management of a co-operative society is always on democratic lines. All the members of a society elect a body of persons to conduct and control the day-to-day working of the society. The members frequently meet and give guidelines to its executive. The management is elected through one man one-vote system. The day-to-day work is conducted by expert persons but the ultimate control lies with the members. In a co-operative, democracy is more than a system, it is a condition of its business success. Co-operative business stands or falls with democracy.

IV. One Man, One Vote:

In co-operative societies every member is given one vote irrespective of his contribution towards their basis of number of shares held by a person. So persons having large number of shares control the organisation. In a co-operative, nobody can control the society on the strength of his wealth. All members have equal voice in the management of the society.

V. Service Motive:

The primary objective of co-operative societies is to provide service to their members. The aim is not to earn profits as is the case in all other forms of organisations. The service of members is the fundamental object of co-operative societies. The societies earn a small amount of profit to cover up administrative expenses. The profit is generally earned when goods are sold to non-members.

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