Since the 19th century when they were first deemed as modern business models, cooperatives are not seen as just a type of company due to the differences, principles and traditions they have from their underlying dynamics to their actions.
Cooperatives are seen as the most effective enterprise model as they use idle resources, help distribute capital equally, include disadvantaged people in the economy and help small enterprises become big businesses by joint ventures. When financial crisis shake the whole world, cooperatives have proven successful in maintaining their businesses without slowing down.
As cooperatives not only work within highly profitable areas, but also work with social and cultural projects regarding education, health, the elderly and childcare etc. Therefore, cooperative models providing the help the public needs and affecting every aspect of social, cultural and financial life, are considered in the scope of a third sector between the public and private sector.
According to International Co-operative Alliance, “A cooperative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise”. In this definition, cooperative values are also defined as self-help, self-responsibility, democracy, equality, equity, and solidarity.
In the scope of these values, there are seven general principles for cooperatives:
Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.
Cooperatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary cooperatives members have equal voting rights (one member, one vote) and cooperatives at other levels are also organized in a democratic manner.
Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.
Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy.
Cooperatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their co-operatives. They inform the general public - particularly young people and opinion leaders - about the nature and benefits of co-operation.
Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.
Cooperatives work for the sustainable development of their communities through policies approved by their members.
