A cooperative is a group people or business who equally share ownership and act together for the benefit of the whole. Cooperatives are often united by common beliefs or moral values. They can be one of three types:
1. Consumer cooperatives, which are companies that are owned by their customers.
2. Worker cooperatives, which are businesses that are owned by their employees.
3. Housing cooperatives, which are buildings or neighborhoods that are owned equally by the residents.
Other common cooperatives are housing associations and credit unions. Among large corporations, business cooperatives include such giants as Land O’Lakes and Sunkist.
There are a number of important benefits to business cooperatives, both for member companies and their customers.
1. Cooperative businesses facilitate transparency. When you’re answerable to your customers or workers as fellow members, you’re likely to be more forthcoming about any difficulties facing the company. When they’re informed about future goals, they have a vested interest in investing time and resources to help the company achieve those goals.
2. Since the customers or employees are also owners, they’re able to stay involved and informed in every aspect of the business. This keeps them engaged and instils a sense of trust and a level of brand loyalty that’s more difficult for traditional businesses to achieve.
3. A cooperative is a democratic organization in which each member has an equal stake and an equal say, and that sometimes includes spending. When your employees or customers are also your business partners, you have more incentive to keep spending in check. It also helps to keep risk-taking to a minimum.
4. Cooperatives not only provide a built-in system of checks and balances, they also help a business stay on course and remain true to their original mission. Cooperatives are just as their name states, a way for a group of like-minded people striving together for the benefit of the whole.
Cooperatives are accountable to and focus on how they can serve their members, instead of being solely bottom-line oriented.