Question

Advantages and disadvantages of cooperative organisation

Answer 1

Advantages of a Cooperative Organization:

1. A cooperative organization is owned and controlled by members.

2. It has a democratic control: one member, one vote.

3. This type of organization has a limited liability.

4. Profit distribution (surplus earnings) to members is carried on in proportion to the use of service; surplus may be allocated in shares or cash.

Disadvantages of a Cooperative Organization:

1. A cooperative organization entails longer decision-making process.

2. It requires members to participate for success.

3. Extensive record keeping is necessary in this form of organization.

4. It has less incentive, and there’s also a possibility of development of conflict between members.