Challenges and Advantages of the Cooperative Business Model in an Economic Downturn

Abstract

Co-operatives are business organizations of their own kind. They have an associative character because they are formed by individuals voluntarily and freely to meet the economic, social and cultural needs of people who form them. Their business practice, is based on human values of fairness, social responsibility, equity and equality. Above all, they are controlled democratically by the members (Develter and Gijselinx:2008) and (Carlsson: 1992). For African countries, Co-operatives are unique organizations because they have existed longer than any NGO. Historically, they have operated in all socioeconomic systems of the world without compromising their basic values and principles. They have one important organizational characteristic that of adaptation and changing according to new economic circumstances. It is these characteristics which make them still relevant to the competitive economy of the 21st Century. Looking at their special business characteristics and their history, a recent statement by the UN Export Group on Co-operatives meeting in New York, has urged world governments to accept the co-operative way of doing business as UN the main alternative to the Investor-Owned dominant Model (2009). For the African economies, it is even more prudent that if the continent wants a sustainable integration into the global economic order, the co-operative business models will provide most critical opportunity for its competitive inclusion into the world market while at the sometime, empowering its people out of poverty. In this presentation we focus on the role of the co-operative business model during economic downturn. We first discuss the historical setting of the co-operative enterprise. Second, we focus on the theoretical preposition of the global economy and economic downturn. Third, we discuss the dimensions of the co-operative business model. Fourth we discuss its advantages. Fifth its challenges and finally the way forward.