The Operation of the Cooperative

Purchasing/shared services cooperatives, like all cooperatives, are businesses owned and controlled by the people who use their services. These cooperatives are typically organized as corporations whose members invest capital in the corporation so that it can provide the members with the services they want.

The members elect a board of directors to make policy for the cooperative. The board also hires a manager or chief executive officer to run the business. The manager is responsible for hiring additional staff to handle the day-to-day operations of the business.

While the cooperative is organized to provide services to its members at the lowest possible cost, it must still be a viable business. Thus, the cooperative's operating budgets are developed so expected income exceeds operating costs. Part of the earnings generated can be retained by the cooperative as ownership capital. The rest is refunded to members based on their use of the cooperative. These are called patronage refunds or patronage dividends.

• Benefits


• Services


• Operations


• Elements of Success
• Resources