The Meaning and manifestation of the dual nature in co-operatives
Keywords:Co-operative, dual nature, business role, member community role, patronage, ownership, complexity
Based on their history and the ideology that motivated the creation of co-operatives in the 19th century (ICA 1995), co-operatives have unique characteristics which separate them from other business forms. Co-operatives are known to be complex organizations with a variety of goals, some of which may be in conflict with one another (Draheim 1952; Skurnik 2002; Mooney & Gray 2002; Puusa et al. 2013).
Typically, the “cooperative difference” is captured in their dual nature, which creates the basis for the unique co-operative identity. A co-operative is a business enterprise and a social group of members and as such has both a business and member community roles. This specific character, duality has been identified and conceptualized in co-operative literature in the 1950’s (Draheim 1952). However, a comprehensive and well-established theoretical framework on the subject is still missing.
In this paper we argue that co-operative duality is a multifaceted concept, which requires more in-depth examination. Although a basic division into business and member community roles is identified in prior research, the in-depth content and meaning of the roles, and in particular their manifestation in practice, are still largely unclear and little researched topic area.
In this paper we provide a more nuanced interpretation of dual features of co-operative enterprises, encompassed in the dichotomy between: patronage and ownership (Nilsson 2001; Mazzarol et al. 2011); social and financial aims (Novkovic 2012); collective and individualistic interests (Puusa 2013); collective and private ownership (Crowell & Novkovic 2019); and their diverse purpose. The paper contributes to a deeper understanding of co-operative complexity, and their strategic advantage.
Draheim, G. (1952). Die Genossenschaft als Unternehmungstyp (2nd edition 1955). Goettingen: Vandenhoeck, and Ruprech.
International Co-operative Alliance (1995). The Statement on the Co-operative Identity available at https://www.ica.coop/en/cooperatives/cooperative-identity
Mazzarol, T., Limnios, E. & S. Reboud (2011). Co-Operative Enterprise: A Unique Business Model? Paper presented at Future of Work and Organisations, 25th Annual ANZAM Conference, Wellington, New Zealand, December 7-9.
Mooney, P. & Gray T. (2002). Co-operative Conversion and Restructuring in Theory and Practice. Research Report 185. United States Department of Agriculture. Rural Business Co-operative.
Nilsson, J. (2001). Organisational principles for co-operative firms. Scandinavian Journal of Management, 17 (3), 329-356.
Novkovic, S. (2012). The balancing act: Reconciling the economic and social goals of co-operatives. The Amazing Power of Cooperatives, 289-299.
Puusa, A., Mönkkönen, K. & Varis, A. (2013). Mission lost? Dilemmatic dual nature of co-operatives, Journal of Co-operative Organization and Management, 1, 6–14.
Skurnik, S. (2002). The role of cooperative entrepreneurship and firms in organizing economic activities – Past, present and future. Finnish Journal of Business Economics, 1, 103–124.