Get to know the understanding of cooperative management and principles

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Get to know the understanding of cooperative management and principles

On this occasion, let’s learn together about cooperative management, as well as various things related to the definition of cooperative management, the basic principle of cooperative management, shu cooperatives, and cooperative integrity. The following is the explanation.

Definition of Cooperative Management

1. Definition of management

Before we discuss the definition of cooperative management, we must understand that cooperative management is divided into two elements of meaning, namely management, and cooperatives. The definition of management of various sources is as follows:

  • Based on IBD, management is the management of resources carried out effectively to touch the objectives of the organization or company.
  • R. Terry explained that management is a major process consisting of various organizing, planning, control, and movement to determine and towards the goals that have been done by utilizing the various resources available.
  • James A.f. Stoner explained that management is organizing, leadership, planning, and business control efforts carried out by all members of the organization and utilizing all existing resources to achieve the previous goal.

2. Definition of Cooperatives

Cooperatives have a special “co” which means together and “operation” or operations which means to work. So, cooperatives have the meaning of cooperation.

Meanwhile, the definition of cooperatives, in general, is a group of people who have the same goals and are gathered in an organization with family principles to improve the welfare of the members in it. The following is the understanding of cooperatives according to experts:

  • Gather Fay explained that cooperatives are a union formed to be able to try together in which some members are financially weak and seek to always be enthusiastic so as not to think of themselves so that each member will do all the obligations and get results that are comparable to the results of his own business.
  • Prof. R.S. Soeriaatmadja explained that cooperatives are a form of a business entity made intentionally and controlled and controlled by each member who also acts as their customers are also operated by them and for them with a non-profit principle.

3. Definition of Cooperative Management

Based on the meaning of management and cooperatives above, cooperative management can be interpreted as an application of management science within the scope of cooperatives in which members are given the responsibility and authority to organize, plan, and control cooperative resources to achieve cooperative goals.

Basic Principles of Cooperative Management

1. Membership is voluntary and open

The cooperative will accept every member openly for anyone who wants to be a member regardless of the social status of the community. So, anyone has the same right to be able to register and there is no coercion or obligation for the community to register himself as part of a cooperative member.

2. Management is carried out in a democracy

The cooperative organizational structure will be formed following existing provisions with a family principle that upholds the value of democracy in the holding of member meetings, the determination of the management, supervisor formation, and the appointment of managers as employees who work on cooperatives to be formed.

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3. Shu’s distribution is done fairly

Cooperatives have the purpose of improving community welfare. For this reason, every member of the cooperative must issue a maximum and capable effort to be fair and equitable, and also equitable, especially in terms of the distribution of the remaining business results in considering aspects of trust in terms of managing cooperatives that have been given by each member who is assessed in the formation of the service of the business services.

4. Giving replications that are limited to investors

Cooperatives must provide reciprocity to those who have invested and also entrust cooperatives in managing capital that has been given by replication following balance, justice, and limitations. The magnitude of capital must also be stated transparently to all cooperative members so that they understand that the provision of services carried out in the cooperative has been carried out following the applicable provisions.

5. Independence

Cooperatives are formed with the principle of independence. That is, cooperatives are not in the shade of organizational umbrellas and also does not depend or rely on other organizations, cooperatives will stand alone to make their organizational structures to be able to manage and also run the company’s operations to improve the welfare of each member and the surrounding community.

6. Cooperative education

Cooperatives have directions and also goals to work together in managing each cooperative operation that is positive. In this case, the cooperative requires expertise in its operation so that cooperatives become a forum that has a principle and principle based on useful kinship. For this reason, education in terms of operating is very important to form cooperatives.

7. Cooperative cooperation cooperation

As explained earlier that cooperatives have independent properties in terms of organizing. But in carrying out every business activity, cooperatives must continue to establish relationships and good cooperation between cooperatives utilizing communication and good interactions.

Shu cooperatives as socio-economic systems

Shu or the remaining cooperative efforts are a difference obtained from all income or total revenues with a variety of costs or total costs within a year. No No. 25/1992, concerning Cooperatives, Chapter IX, Article 45 explains Shu Cooperatives as follows:

  • Shu in cooperatives is the income of cooperatives obtained during one year period with deducting costs, depreciation, and various other obligations in the year of the book.
  • Shu, which has been reduced by the reserve fund will be distributed to all members who are comparable to business services that have been done by each member with cooperatives and are used for the interests of cooperative education and cooperative needs, following the results of membership policies.
  • The value of capital fertilization and reserves will be determined in a member meeting.

So, cooperatives can improve the welfare of every member because they play a role in improving the community’s economy.

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Integration in Cooperative Management

Cooperatives can deal with various important economic tasks for the community. The way is to prioritize service undertaking, not profit undertaking, and by being applied to cooperative concentrations that enable cooperatives to do greater efforts, because cooperatives can gather larger capital.

The form of business carried out will be integrated, so that everything will be in line from primary to the parent, and does not allow the occurrence of various competitions, except competition in terms of increasing work motivation in its members. In cooperatives, the integration will be known as a kind of cooperative and interaction in the cooperative sector.

Integration in the type of cooperative

The integration in the cooperative includes:

  • Horizontal Integration in Cooperative Management

Horizontal integration is a combination between each cooperative and level to achieve a higher level. This combination is done in the hope that it can increase the volume of greater business, so it can not only work more successfully or more useful, but also makes it easier for every form of trade in it.

  • Vertical Integration in Cooperative Management

In this case, the combination will apply to similar cooperatives, from primary to the parent as one business unit that has no longer separated. For this reason, every unit must have an integral work plan, so that every activity committed from primary to the parent and vice versa can continue continuously.

  • Parallelization in cooperative management

The parallelization cooperative is a multi-purpose cooperative or an entertaining cooperative that runs a lot of efforts for the benefit of each member. One example is a village cooperative or KUD.

In entertaining cooperatives, how to work and how to run a business will be done side by side. Therefore, this parallelization cooperative is very suitable to run in the countryside.

Integration in the Cooperative Sector

With its horizontal and vertical nature, the concentration, in this case, will include integration in India and the economic field.

  • Email field

The concentration carried out, in this case, is useful for getting all forms of guidance in India, so it does not directly make efforts in the economy, but do the task to produce a general policy.

  • Economics

The concentration carried out in the economic field has a purpose in making it easier and also launching the cooperative sector. Like the establishment of a cooperative commercial bank, insurance, etc.


That is an explanation of cooperative management, complete with the definition of cooperative management, the basic principle of cooperatives, shu cooperatives, and integrity in cooperatives.

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