Overview Of The Prospects Of Consumer Cooperative Societies

This topic is important to me because it reveals the challenges that consumer cooperatives face, which can be a hindrance to growth. I will get a clear view of the outlook for consumer cooperatives by doing this research. I find the cooperative concept very interesting, which makes it even more fascinating to study.

Economic associations are cooperatives. They play a significant role in socio-monetary growth for individuals and the general public. It is a type of corporate institution. It aims to give valuable facilities to people at the lowest price, not for profit. Consumer cooperatives have a significant role in protecting buyers against the manipulation of intermediaries, and delivering high-quality items to buyers at the most reasonable prices and for the right amount. Research has shown that governments have taken many steps to form consumer cooperatives. These include establishing public relations, protecting monopolies, and regulating the price variations in the market. I also found out some of the problems faced by consumer cooperatives depending on their location. The majority of my research has been done in Malaysia. The challenges are now being discussed.

Most cooperatives that operate are small or medium-sized and have moderately limited purchasing power. The rate discount that is obtained from bulk purchases of goods does not benefit consumer cooperative. Consumer cooperatives offer rates that are higher than those advertised by supermarkets and other giant operators. In the past, it has been shown that cooperatives fail due to a lack of financial knowledge and inadequate training. In order to build a competitive business network, segregation is vital. Marketing creativity and capital strength have shown the positive effects on cooperative associate loyalty. This is due to the inequalities in transactions between cooperative and corporate sectors. The external party dependency makes it hard to generate wealth. With rising costs making it difficult to collaborate, it is more difficult to pay fair wages to attract skilled workers. The turnover of the company is increased when employees leave.

Inefficiencies in administration planning, lack of market analysis and inefficiencies in corporate governance are two of the biggest issues. Another issue is the decision to build retail outlets in the right place. The research revealed that many Malaysian consumer cooperatives employed less experienced, skilled and competitive workers in their retail outlets. Diversifying business income can also lead to a loss of business focus, which in turn makes it difficult to fulfill its original purpose. A few cooperatives introduced credit lending to help customers and members make repeat purchases and purchase more. Many customers and members began to trust cooperatives when they shop. This system has been proven successful because it allows buyers to shop at stores they don’t own. But, allowing undue credit lending to go unsupervised has caused problems. The accumulation of debt has also resulted in higher taxes. Some cooperatives were forced to pay the debt uncollected.

This problem is caused by a lack in education regarding cooperative among members and buyers. This results in ineffectiveness in making decisions and taking on responsibilities that are focused on the cooperative. Cooperative societies are only open to members who want to receive loans and dividends. Azmah and co. Azmah, et.al (1993), less than 50 percent of respondents were surveyed at the annual meeting. The meeting was attended by 14.3 percent of those who did not show up. The annual general meeting was attended by rural cooperative members at a higher rate than urban cooperative members. The research also revealed that many members have not increased their share capital investment since joining the cooperative.

Cooperatives tend to keep their doors closed to preserve their tradition, which is not a good thing for members. The cooperative outlets sell goods at lower prices than their competitors. This is affecting their customer satisfaction. The other side is that the cooperatives’ connections with manufacturers have been reduced, which has led to the firms buying directly from them at discounted prices. The coops have less purchasing power, which can also contribute to higher purchase costs and taking advantage of competitive advantages. In this regard, manufacturers no longer offer credit services because they are less close and more confident.

Retail shops should have limited stock and products of low quality. Retail shops in countries such as Malaysia were found to be inefficient and lacking professional practices. For example, most shops didn’t even have cash machines. All transactions were done manually. Also, the accounting system should have been less. Ordering and delivery were also not efficient. Stock counting was not properly addressed.

Consumer cooperatives were also subject to competition from similar businesses with more modern and well-equipped facilities. Stone (1988-1995, 1998) states that small retailers will be more vulnerable to competition if they sell similar products in supermarkets than small businesses.

According to research, most employees and managers are unhappy with their work load in relation to the salaries they get. Cooperatives do not pay as high or as reasonable wages, so employees are less likely than others to work long hours at coop retail shops. There was less chance of employees being offered better career opportunities and benefits.


  • codyyoung

    Cody Young is an educational blogger. Cody is currently a student at the University of Utah pursuing a degree in communications. Cody has a passion for writing and sharing knowledge with others.



Cody Young is an educational blogger. Cody is currently a student at the University of Utah pursuing a degree in communications. Cody has a passion for writing and sharing knowledge with others.

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