What are the limitiations of coperative societies 1?
Answers
Answer:
The Limitations of a co-operative societies are as given below :
1. Lack of Secrecy
A co-operative society is required to disclose fuller information to its members. Thus, secrets of the business cannot be maintained.
2. Lack of Motivation
Since there are restrictions on the rate of dividend, the members of the managing committee do not put their best efforts to make the organisation succeed.
3. Limited Size
The co-operatives are likely to fail if they choose to expand. Large-scale production or distribution is not suitable for co-operative societies.
4. Limited Capital
Co-operatives are usually at a disadvantage in raising capital because of the low rate of return on capital invested by members.
5. Inefficient Management
The management is generally inefficient becasue the managing committee consists of part-time and inexperienced people.
6. Excessive Government Interference
The co-operatives are exposed to a considerable degree of regulation by the co-operative department. While a certain degree of control is good, but too much interference affects efficiency of management of the cooperatives.