“Co-operatives are better because they give individuals participation through ownership, which makes them inherently more engaging, more productive, and both more useful and more relevant in the contemporary world.” – ICA Blueprint
The active participation of members in their cooperative is vitally important to its success and one of the key factors that differentiates cooperatives from other types of business. Participation is woven through the seven cooperative principles, from democratic member control and economic participation, to the provision of education, training and information and concern for the community – participation in cooperatives means not just members’ participation in their cooperative’s governance, but also ensuring the participation of non-member stakeholders and the wider community.
Not surprisingly, participation is one of the five themes outlined in the International Co-operative Alliance’s Blueprint for a Co-operative Decade, which looks forward to a “2020 Vision” of cooperatives becoming the acknowledged leader in economic, social and environmental sustainability, the model preferred by people and the fastest growing form of enterprise. The document uses “participation” as a “short-hand for the unique co-operative approach through which individuals own their co-operative, and participate in its democratic governance.” Participation, according to the document, is one of the cooperative sector’s most valuable assets. And evidence suggests that “providing consumers and workers with a voice inside organisations produces better, more intelligent and responsive forms of business.”
Motivation and identity
A lack of participation by members can mean the difference between success and failure for a cooperative, not to mention undermining its intrinsic identity. “If there is no real participation, there is no cooperation”, says Mauro Giordani, the president of the Fondazione Ivano Barberini in Italy, whose mission is to promote the culture of cooperation in society. He’s noticed a slowing of participation, and stresses the importance of finding ways to reactivate participation through tools and motivation. “In the past, cheaper products and better working environments were the motivation,” he said, “but now we need to encourage more intrinsic motivations.”
The case of Sweden offers a salutary example of how changing societies mean changing motivations. Victor Pestoff, a guest professor at the Institute for Civil Society Studies at Ersta Sköndal University College in Stockholm, is an expert in the political and democratic aspects of cooperatives. “After the war, Sweden had 2,500 municipalities,” he said. The government decided to consolidate them, making them bigger, in the process eliminating many channels for citizen participation. Now the country has just 290 municipalities. “The third sector followed suit,” said Pestoff, “and cooperatives amalgamated, transforming from small village cooperatives into huge urban cooperatives – highly structured, top-down organizations with managers who are paid competitive salaries – eliminating channels for member participation.”
But, he warns, once there is no difference between a cooperative and a private business, there is no reason to make any extra effort to use or join a cooperative.
The principle of participation is one of the key principles that distinguishes the cooperative from other businesses, said Elisa Badiali, a PhD Fellow in Sociology at the University of Bologna and a researcher at the Fondazione Ivano Barberini. “Where this principle is realized in a substantial and concrete way, it is an advantage. But where it is only a stated principle and value, the cooperative becomes not only a business like others but is also at a disadvantage from the point of view of the market rules.” Returning to the case of Sweden, Pestoff said that “as the cooperative economy focused just on commercial aspects and ignored its democratic principles, it began to falter, and cooperatives lost their cooperative identity.”
The impact of societal changes
When cooperatives were first created in Scandinavia, they offered good products and credit for consumers, important factors a century ago, especially in rural areas. Now that society has moved from rural to industrial and urban, Pestoff said, people need services, particularly the social services – education, childcare, healthcare, care for the elderly and the handicapped – that used to be provided by an extended family.
“Society has changed radically and so have the needs of members, and cooperatives must provide what members need: social services.”
He gave the example of Japan as a country that has engaged with these transformations in society. Agricultural cooperatives run around 120 hospitals for their members, he said, providing essential services in rural areas. “Cooperatives must make themselves relevant again,” said Pestoff. In Japan too, however, changes in society are forcing changes to the participation model. Japanese consumer cooperatives had established a model of member participation based on small neighbourhood groups (Han) as the basic organizational unit.
Han groups would meet weekly and formed the basis of an elaborate structure that enabled coops to have direct member participation, hear members’ opinions and disseminate information to a wide range of members efficiently, says Akira Kurimoto, director and chief researcher of the Consumer Cooperative Institute of Japan. Cooperatives fitted the lifestyles of housewives, and became a major channel for their participation in social and community activities. This model, however, has been challenged by societal and economic changes. Fewer women are staying home and more and more members are working full- or part-time. “As such,” Kurimoto writes, “a shift away from the traditional Han meetings/committees to more spontaneous gatherings is taking place at many coops.”
The challenges of size
iCoop Korea structure
This type of elaborate structure is necessary for larger cooperatives, such as consumers’ cooperative iCOOP KOREA, the second-largest in South Korea. It operates as a federation of 75 primary member cooperatives, with a total membership base of 170,000. To avoid participation falling as cooperatives grow in size, iCOOP divides primary cooperatives into smaller sizes when they get bigger, to overcome weakening democratic participation and face-to-face relationships among members. According to research by the Fondazione Barberini, as the number of workers in a cooperative increases, the number of people who actively participate tends to decrease.
Small is beautiful
In the past, participation in cooperatives was all too often reduced to mean voting in a General Assembly. Says Carlo Borzaga, the president of the European Research Institute on Cooperative and Social Enterprises (Euricse): “It’s possible to negatively judge certain types of cooperatives – consumers, banks – because few members come to the assembly.”
Instead, he says, members are voting with their feet, by choosing where to buy their shopping or entrust their savings. “This is the real participation.”
For iCOOP KOREA, ensuring the participation of individual members involves a complex series of meetings, committees and clubs. The General Assembly consists of delegates from each member cooperative, but the chairpeople of the member cooperatives also meet regionally once a month to facilitate communication, information exchange and democratic discussion. iCOOP KOREA’s organization is an example of a complex network of structures that can be put in place to ensure that every member has a voice. Breaking down meetings into smaller groups is a key strategy used by cooperatives in all sectors. Coomeva, for example, is a Colombian cooperative which groups together 16 companies in four sectors (health, financial, recreational and insurance). Despite having 265,000 members, the cooperative ensures democratic participation through 176 committees involving 1,435 leaders. Read more about how Coomeva ensures participation here.
This strategy of breaking down the structures also works in smaller cooperatives. Lavoranti in Legno is an industrial cooperative specializing in wooden window frames based in Ferrara, Italy, with around 100 worker-members, plus 24 workers who have not yet joined the cooperative. All of them participate in regular meetings in small groups of 10 or 12 with the cooperative’s president, Giampaolo Mazzoni. “People can speak and ask everything they want to,” said Mazzoni. “We concentrate on machinery and work but also the smallest problems, and I always try to come back to the next meeting with answers.” “Meetings with small groups on specific themes facilitate the intervention of members who might not speak in a more formal assembly”, said Elisa Badiali. She has collaborated on an in-depth study of participation in Italian cooperatives, and said that these smaller, informal meetings were “one of the tools most used by those cooperatives that have a high level of understanding of the use of participation.”
Lack of awareness
Encouraging participation for all members in formal governing structures is also a challenge for the Mondragon University, a member of the Mondragon Corporation federation in the Basque region of Spain.
Three of the university’s faculties, for Engineering, Humanities and Education and Business Studies, are themselves cooperatives, and the members are workers (teachers and other staff), students and local authorities and companies that collaborate with the university. “Students automatically become members,” says Saioa Arando Lasagabaster, a researcher at the MIK research centre, linked to the Faculty of Business Studies. “But I don’t know if they are conscious about that. It is a challenge to make them participate. You always find in a group of students some who are more interested in cooperatives than others. Even if you talk to students who have been in the governing board, they are not always conscious about the power they have.” Nonetheless, she said, the horizontal organization of the cooperatives means that “students have the possibility to talk to their teachers without hierarchy. All the doors are open for the students, and the relationship between teachers and students is very close.” This kind of informal, non-institutionalized participation is very important to cooperatives.
As time passes, the members of a cooperative will inevitably change as some leave, retire or die, and others arrive, and these natural evolutions can often be a major challenge. Kevin Schmidt is one of the co-founders of Center Point Counseling Services, the first and only worker cooperative providing mental health services in the United States. Though the cooperative was only founded in 2011, many of the members had been working together, some for as long as 25 years, at a different facility.
“So we generally, gracefully intuit the balance of participation without formalizing a structure,” said Schmidt. “But when we have new members, which is happening, we need to provide guidelines for them, more clear policy-based ‘participation guidelines’, like ‘everyone is on two committees and no more than three’.”
Lavoranti in Legno, meanwhile, have maintained a certain continuity by creating the position of “honorary member” for some of the founding members who still want to contribute to the cooperative’s governance. “In moments of difficulty, it is a great help to remember what they have done for the cooperative, the sacrifices they have made in the past,” says Mazzoni. “Maintaining links with older generations is very useful.”
Pulling through difficult times
Making sacrifices can often be necessary during difficult economic or political periods, and feeling as though they are actively participating in the cooperatives can make members more willing to undergo them. One example comes from Poland, from a mineral-water plant, Muszynianka, founded as a cooperative in 1951. “Over all those years, strong emotional relationships have been created between the workers and the cooperative,” said Maria Janas, the cooperative’s president. “Muszynianka faced its biggest challenges during the political transformation in Poland, when the centrally planned economy changed into the market economy. The economic situation was difficult and the work conditions were not very attractive.” Though the situation slowly improved, investment needs were high and for several years members did not participate in the division of the surplus. “In such a difficult situation, our members showed impressive responsibility,” she said. “During a general assembly, they unanimously adopted a resolution concerning the division of profits.”
Janas said that a rich offering of social benefits helps create a positive atmosphere at the cooperative, with activities like holiday camps for workers’ children. Lavoranti in Legno also offers an interesting example of using social activities to encourage participation, organizing regular talks on topics “that might seem strange for a cooperative that makes wooden windows,” says Mazzoni. “They range from religious and historic subjects to painting, art, sculpture, economy, philosophy and great works of literature.” Open to the public as well as the workers, they might involve a talk on symbolism in Leonardo da Vinci’s Last Supper or the presentation of a book about Adriano Olivetti, the entrepreneur and son of the founder of the Olivetti typewriter and computer manufacturing business, and one of the first businessmen to emphasize the importance of participative and community aspects.
“We have created instruments for increasing knowledge,” says Mazzoni, “because we are convinced that you participate only when you have knowledge. Otherwise it is demagogy.”
Social activities can be vital in helping members participate in the cooperative and in the wider community. Zerihun Desalegne is the coordinator of the Honeys of Ethiopia network, which unites seven beekeeping cooperatives in Ethiopia, including the Shallalà Honey Producers. He said the cooperative members all work together on projects like reforestation, and also share their own personal problems. “The social life and social relations in the cooperative are very strong,” he said. “If somebody has got their own family problems, they help each other, if someone cannot send his children to school, or if someone’s son or daughter is getting married they try to help each other.”
A sense of community
A sense of belonging and community is one of the main factors that encourages participation. The Meru Herbs Rural Sacco, a savings and credit cooperative in rural Kenya, participates in community activities like harambees. Harambee, Kenya’s national motto, means “all pull together” in Swahili and refers to a traditional community self-help event. The Sacco also gives loans to women’s youth groups to disburse to their members. Similarly, most of the caisses (cooperative banks) that belong to the Desjardins Group, Canada’s largest financial cooperative group, use Community Development Funds (CDF). At the caisse general meetings, members choose to give part of their individual dividends to replenish their CDF, which is used to support important community projects – helping to save a small school in Saint-Lucien, awarding scholarships in Montreal, rescuing a ski resort in Mont Orignal of great importance to the local economy. In 2012, C$41.3 million was paid out by the fund. Meanwhile, on a smaller scale, the Organopónico Vivero Alamar, an organic urban farm in Havana, Cuba, organizes activities for Mothers’ and Fathers’ Day and the cooperative’s anniversary, as well as providing barber services for men and manicures for women and helping them purchase toiletries and household products, which can be very expensive in Cuba, on credit. These activities help create a sense of community among members, making them feel emotionally invested in the cooperative and its success.
Regular membership fees can also be an important way of making members feel that they are actively participating in their cooperative. Zerihun Desalegne says that it can be hard for cooperatives like Shallalà to unite its members, who come from different villages and belong to different religions. But he cites the monthly membership fee of around $3 as giving them a sense of belonging and participation. In addition to an initial investment, iCOOP KOREA also introduced monthly membership dues. These are used for the operating budgets of the primary coops, similar to the Canadian direct charge system.
“It convinces members that their coop is run by them and also makes members naturally participate in their coops,” says Jung Won-gak, executive director of the iCOOP Co-operative Development Center.
Surveys and communication
“Collecting members’ needs effectively is also significant,” says Won-gak. “The iCOOP Co-operative Research Institute conducts a survey of all members every three years, to investigate their needs, consumption patterns and social understandings.” Communication is important to Lavoranti in Legno too, which says it is one of the few industrial cooperatives in Italy to have adopted the use of an annual social report, offering a way to communicate not only to members but also clients, suppliers, public authorities and financial institutions what the cooperative has achieved over the past year.
Cooperatives must learn how to harness new technologies and social media in order to increase participation. Over 10,000 members are connected daily to Canada’s Desjardins Group via Facebook, and close to 7 million visitors visit its website every month. Richard Fortier, a senior advisor on cooperation and organizational ethics for the group, also explained that for the past three years, Desjardins has been investing 1% of its surplus earnings in the program Co-opme, an education and cooperation zone with blogs, advice about financial management and activities to teach about cooperatives. These include the ZOOM CO-OP game and quizzes to assess financial knowlegde or health awareness. The area keeps members engaged, and, says Fortier: “is our premier vehicle for reinforcing our cooperative values within Desjardins Group and the community”.
Other innovative tools for boosting participation are also being developed: “To increase the participation of members in different democratic ways, more and more caisses hold their AGM in a room and simultaneously on the net,” says Fortier. “We are also currently developing an additional electronic tool specially designed to stimulate the participation of members in terms of consultation, contribution to the caisses’ decisions, fine-tuning members’ needs… This new tool will be helpful in cultivating the members’ sense of belonging.”
The importance of external relationships
Forging links with individuals and organizations who are not officially cooperative members is a key element in participation and in making a cooperative stronger and more successful. Carlo Borzaga of Euricse is adamant that cooperatives must expand their focus on members to include many different types of stakeholders and ensure what he calls multi-stakeholder ownership. He gives as an example the Italian social cooperatives, many of which were started in the 1990s by volunteers. “Volunteers might not be interested in being workers,” he said, “but they should be allowed to become members. Volunteers should have the same voting rights.” Balance is important, he says: “Social services coops with only volunteers are not very stable, and with only workers they might not be so focused on social aims.” Another example are educational cooperatives. “If only parents are the members of a school coop, the parents will change and the cooperative will disintegrate. With parents and teachers there is more stability.”
Research conducted by Euricse on 300 social cooperatives in Italy showed that multi-stakeholder cooperatives were more efficient and effective, with a higher turnover.
Stronger cooperatives, stronger societies
Participation can mean many things within a cooperative, and involve many different stakeholders, but ensuring real, substantial participation from diverse stakeholders, not just holding an Annual General Assembly where members can vote, is essential to building a strong, successful cooperative. The benefits of participation can also spread far beyond the cooperative. Following cooperative models for participation can help investor-owned enterprises, especially during times of economic crisis. And according to the ICA Blueprint, participation not only makes businesses better, “but also supports stronger communities, as individuals develop the skills and confidence to participate in their communities and societies.”
- The story of iCOOP KOREA’s Practice for Enhancing Biodiversity in Rice Paddy Ecosystem
- iCoop Korea sets out key priorities for 2014
- A brief history of Coomeva on Stories.coop
- Partecipazione in cooperativa – Istruzioni per l’uso (Participation in Italian cooperatives – Instructions, in Italian) – pdf
- Mondragon University: Cooperative University
- The story of Meru Herbs Rural Sacco Ltd. on Stories.coop
- The story of Organopónico Vivero Alamar on Stories.coop
- Muszynianka – spółdzielnia pracy (Muszynianka – cooperative jobs, in Polish)