Co-operative values or common values?

  • Sanna Saastamoinen Business School, University of Eastern Finland
  • Anu Puusa
Keywords: Co-operative values, Co-operative Management

Abstract

The co-operatives are organizations that are based on a strong value base (ICA 2021). Although a key unique characteristic of co-operatives creates a strong value base, there has been almost no interest towards the topic in scientific debate in recent years. Most studies have been conducted in the 1990s and early 2000s (see Oczkowski et al., 2013). There is still a need for research regarding the relevance of the values ​​and principles updated by ICA (1995) to modern co-operatives, as the conditions have changed significantly in this millennium.

The co-operative values per se are quite broad and the co-operative principles can be considered as more concrete standards for their practical implementation (Goel 2013). In addition, the value base of co-operatives´ is determined by internal factors (e.g., attitudes / perceptions of values of management, administration, and employees) and external factors such as laws, competition, and industry rules (Oczkowski et al., 2013; Jussila, 2013; Rabong & Radakovics, 2020). Nevertheless, scholars seem to agree that the co-operatives’ survival, competitiveness, and success in business are based on the application of co-operative values ​​and principles (e.g., Novkovic, 2006; Spear 2000; Rabong & Radakovics, 2020).

While the importance of values ​​and principles for co-ops is critical, their use in day-to-day business is less obvious and the gap between values ​​and management is sometimes wide (Novkovic 2006). For example, it has found that only a few co-operatives adhere to all principles (Birchall 2014, Mazzarol et al., 2011) and most typically adhere to limited return to equity, democratic voting rights, and the need to provide benefits to members while seeking to provide benefits to the co-operative (Mazzarol et al., 2011). Thus, it has also been suggested that poor adherence to values ​​and principles calls the importance and legitimacy of the co-operative into question (Cote 2000), causes demutualization (MacPherson 2012), and can lead to the deterioration of the co-operative and loss of identity (Somerville 2007).

Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity, and solidarity. In the tradition of their founders, cooperative members believe in the ethical values of honesty, openness, social responsibility and caring for others. (ICA, 2021). The co-operative principles are voluntary and open membership, democratic member control, member economic participation, autonomy and independence, education, training, and information, cooperation among cooperatives, concern for community (ICA, 2021).

Research so far has examined co-operative values and principles from various perspectives. For example the experiences of managers and board members in the application of values and principles in their day-to-day operations and their awareness of values and principles in the context of small and large co-operatives (Novkovic 2006). Novkovic (2006) noted that the experiences of managers and board members differed somewhat and that the size of the cooperative also had an impact on the experience and application of values. Rabong and Radakovics (2020) examined the values that citizens associate with different type of co-operatives and summarized the three core values; responsible business conduct, regionality and tradition, and economic soundness. Rixon (2013), for his part, examined the emergence of co-operative principles in the annual reports of co-operatives and interviewed the top management of co-operatives. He noted that the principles were not presented in the reporting, but some performance indicators implicitly reflect the principles.

Most previous studies examined members’ perceptions (see Oczkowski et al., 2013; Rabong & Radakovics, 2020) (excluding Novkovic, 2006, Rixon, 2013). Rabong and Radakovics (2020) noted that at least the values ​​attached by citizens to co-operatives varied from country to country, which is why he suggests that further research on country-specific impacts is needed. Novkovic (2006) reports significant differences in the perceptions and different utilization of principles by the management of large and small co-operatives. Most studies look theoretically at how principles can be applied in practice and evaluate the advantage and disadvantage of adhering to principles (Oczkowski et al., 2013).

In this paper, we examine in the context of large Finnish co-operatives what values their managers and elected representatives attach to cooperatives, how they interpret the co-op value system, and what meanings they attach to co-operatives from value point of view.

The research data are based on 41 qualitative interviews. The interviewees represented 8 of the largest co-operatives in Finland and served as the co-operative's manager or chairpersons of board of directors or supervisory board. 13 of them work in producer co-operatives and 28 in the consumer co-operatives. The data will be analyzed by using qualitative content analysis. Due to the extensive knowledge, Atlas.ti software is used as a technical aid in the analysis.

The analysis process is still ongoing, but our preliminary conclusions indicate that while reference is made to the international co-operative values and principles, the overall awareness of them seems very incomplete. However, a special value base is strongly associated with the co-op idea and co-operatives, which is realized via the basic practices of co-operatives. When talk of values is connected to practical managerial actions, the role of values and distinctive principles become dim and their interpretation kind of narrows down. Values are perceived as some kind of ideal, and whether value discourse is genuinely associated with the ideology of co-operatives or whether it is a response to the prevailing general managerial discourse and demands for corporate social responsibility remains unclear.

References

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ICA (2021). https://www.ica.coop/en/cooperatives/cooperative-identity
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MacPherson, I. (2012). “‘What is the end purpose of it all?’ The centrality of values for co-operative success in the marketplace”, in Battilani, P. and Schröter, H.G. (Eds), The Cooperative Business Movement, 1950 to the Present, Cambridge University Press, New York, NY, pp. 107-125.
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Published
2022-08-11
Section
6.7 Hybrid cooperatives - Business and Member communities