What IS a co-op, anyway?

Cooperation in Business

Hand in hand with the big green buzzwords like "organic" and "natural", we often see the terms "co-op" and "credit union". What exactly do these mean? Why are they so closely associated with environmentally friendly concerns?

Although co-ops and credit unions are not by definition environmental organizations, they are frequently linked to them due to the nature of the associations. At their heart, these organizations are community-driven business. They are all owned and democratically managed by their share-owners - the people (or business) who make use of the business, rather than being managed by a group of investors or a single managing owner.

The benefit of these cooperative units are substantial to the members. A business run by the people who purchase it's services does not concern itself primarily with profit. If you noticed that natural food co-ops are frequently expensive, well, that's the nature of the beast. Natural food is more expensive for a number of reasons (which I won't go into in THIS article.)

Similarly, credit unions are financial cooperatives of individuals with common bonds - usually employment, labor union membership, or residence. Like a grocery co-op, membership in a credit union usually entitles you to a vote and a portion of dividend profits.

What are the benefits of cooperative organizations? They usually have a very strong bond to the community that they serve - they will always try to make decisions that best serve their members, rather than kow-towing to a board of directors who may have never even entered the place of business. One of the biggest benefits is the knowledge that you are supporting your own community in a meaningful way.

There are four basic types of cooperative businesses - consumer, producer, worker, and shared purchasing services.


Updated by Joe Dolson on 24 August, 2009

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