Question

What are advantages and disadvantage of co-operative organization?

Answer 1

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.

Answer 2

Cooperative organizations are those organizations, which are different from the rest, as they are formed not for the purpose of making profit but to provide its members goods and services at reasonable rates. This form of organization primarily protects and safeguards the economic interests of its members.

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.