Large Co-operative Trouble

2 minutes

As I write this, there are huge challenges for Britain’s Co-operative Group which is having cash problems as reported by the Guardian. Its financial services sector is facing losses that arose from bad loans, and the co-operative was downgraded by rating agencies. Co-operative News also reported that the executive group was seeking to double its pay, linked here.

This co-operative is suffering from financial management issues we’re familiar with at many large corporations. Should co-op principles have been able to prevent these problems? Is this co-operative group too big? At what point do co-ops cross over and function as non-co-ops? The challenge to Mondragon in Spain is another example with the bankruptcy of Fagor.

Some solutions are being considered. Journalist Andrew Bibby, a Guardian reporter, has focused on co-ops in his reporting. On January 21st he reported that a group of British co-operative activists met in Manchester to think of solutions to Britain’s major co-ops challenges. These proposed solutions pose some good questions about the situation with the Co-operative Group and large co-ops in general, see Bibby’s article here. At the meeting some ideas were:  

1. Dividing into smaller parts: “splitting the giant Co-operative Group into a series of mutually supportive but autonomous regional co-operatives societies.”

2. Improved interaction: “members should be able to interact with their co-operative through meetings at individual shop level. He also suggested that co-op members should be prepared where necessary for creative tension and conflict.”

3. Learn from other large co-ops: Creating smaller units is not necessarily the answer. The large co-op, Canadian co-operative bank Desjardins in Canada, was cited as a successful co-op model.

He describes the meeting as reminiscent of the pioneering days of co-ops. (The co-op movement in the UK started, arguably, in 1761 with the first co-op of the industrial revolution. See Bibby’s co-op timeline here.) As the co-op movement expands, the sustainability of large co-ops, and where they can go wrong, will need to be considered closely.

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