Can Cooperatives Conquer? Part 1

Government is formulating a new policy for cooperative sector. Dialogue seems to be restricted on issues like legal framework, identification of regulatory policy, operational barriers, level playing field to cooperatives, account keeping and auditing. Parliamentary standing committee advises to exercise prudence while chalking out activities so that federal features are not impinged upon. Cooperative is primarily a state subject in India as per the seventh schedule of constitution. A Multi-State Cooperative Act 1980 introduced at Centre for a purpose, last amended in 2002 by the center government, is likely to be tweaked once again. It seems necessary for improved operations in multiple states while providing a boost to action in this domain for higher investment. Cooperatives were under the administrative control of Ministry of Agriculture till July 2021. A structural shift has happened at top from a subset to an independent set up, a right move to unshackle from agriculture. New ministry is presently functioning from temporary office accommodations at various places with a limited staff. It has set a target of 8-9 months to announce a new cooperative policy and introduce MSCS Bill 2022. Cooperatives are not well understood in corporate world as of date world over, are still largely under-theorized. A position white paper is necessary on the journey thus far; both from external and internal environment. Environment Internal Corporate cooperative is a brilliant concept well suited for the new world that is emerging with equality, literacy and digital networking. Cooperatives are complex enterprises with multiple goals and objectives, they are often conceptualized in binary terms, as social and economic entities forming couple of paradoxes. Cooperatives are defined as collective enterprises (collective contributions; ownership; benefits; decision making and control1). Dual nature in cooperatives typically implies that they are two things in one: a business enterprise and an association (Laville and Mendel, 2007). Democratic formation, one member one vote, is uniqueness that has potential to decentralize power. However, it is important that this spirit is kept alive in structure design and defining rules of the game. Images are often used to conceptualize and think of an organization. Fredrick Winslow Taylor related an organization to a machine in early 1900s with a concept of scientific management to formulate industrial bureaucracy. Economic enterprises world over continue to adopt the underlying assumption that productivity could be enhanced by specifying cause and effect in the production process, like controlled mechanics of as a machine. Similarly, a cognitive understanding of a cooperative metaphorically can be visualized to a musical instrument “Damru” in India (Figure 1). The instrument is often seen in the hand of lord Shiva, revered image in India. It is representation of rich impact to the society, in creation and regulation (sustainability). In Buddhism, the Damru is often used as instrument in meditation practices. So profound are values associated with this instrument. Concept of cooperative produced by fusion of social and economic outreach represented through two halves of the instrument can deliver a strong structure for corporate collaboration to operate with a sustainability provided it is structurally robust and is in right hands. Figure 1 The cognitive interpretation is facilitated further in Fig 2. Figure 2 Lower triangular in yellow represents economic enterprise, staffed by CAs, HR specialists, hierarchy-oriented managers and engineers who armed by the principles that are normally accepted for running a business governed by such rules and policies which are necessary for economic uptake (depending on sector of activity agriculture, credit, technology, production, retail, social welfare, media). Upper triangular part is association of members/cooperative societies who represent a social dimension in the cooperative to uphold cooperative purpose, normative values, and principles among different cooperative types (consumer, producer, worker, multistakeholder). Taken together their DNA satisfies social needs through economic means. Two triangles fuse together at top by a coordination mechanism structured on representatives' small group called Board of Directors who control and steer the cooperative to strike a balance between the business and association roles and position dualities as synergetic forces. A Chairperson is normally selected amongst from the Board members to chair meeting of the Board. Legal framework transcends through certain guidelines (rope) for getting synchronous output as musical sound, means to focus on cooperative mission of the entity and satisfy its identity as reflected in the definition above. The provisions of byelaw, a key organizational document, perform the function of tie rope stretched for action from both ends, focused on the mission and objective of the cooperative. If the provisions are loose, the resultant output shall be way beyond the desired synchronous beat. Further internally each triangle needs to have a formal or informal system of communication along the chain of hierarchy for pure action on non-intrusive basis. Area under each segment is another variable that is configurable.