BASIC CO-OP MANAGEMENT

MARICEL G. RUEDAS
CDS II
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WHAT IS A COOPERATIVE

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 WHAT IS A COOPERATIVE
RA9520 Chapter 1 Article 3
“ A cooperative is an
• autonomous
• duly registered association of persons
• with common bond of interest
• who have voluntarily joined together to achieve
their social, economic, and cultural needs and
aspirations
• making equitable contributions to the capital
required
• patronizing their products and services and
• accepting a fair share of the risks and benefits of
the undertaking in accordance with universally
accepted cooperatives principles.” 3
Characteristics of a Unique and different from
Co-operative other business enterprise?
• Common need, common • Member-owner
bond of interest • One-member-one vote
• Common need, common • Returns given back to
bond, interest members
• Member’s commitment to • Patronize the services
help each other, succeed
in coop enterprise • Equal opportunity

• Leadership values • Lower interest, prices

• Service-oriented, people’s • Help members, help

welfare to make members themselves
aware to save & be thrifty • render the greatest
• Self-reliant possible benefit to its
members—not to make
the largest possible profit 4
COOPERATIVE VALUES

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COOPERATIVE VALUES

“Co-operatives are based on the values of self-

help, self-responsibility, democracy, equality,
equity and solidarity. In the tradition of their
founders, co-operative members believe in the
ethical values of honesty, openness, social
responsibility and caring for others.

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COOPERATIVE VALUES
OPENNESS - Nobody’s perfect, and we won’t hide it
when we’re not
HONESTY - We have integrity about what we do
and the way we do it
SOCIAL RESPONSIBILITY - We encourage people
to be answerable for their own community and work
together to improve it
CARING FOR OTHERS - We regularly fund
charities and local community groups with the profits
of our businesses
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COOPERATIVE VALUES
DEMOCRACY - We give each member an equal
chance to run the business of the co-op

EQUALITY - No matter how much money a member

invests in his/her share account he/she is entitled to
just ONE vote

EQUITY - We carry our business in a way that is fair

and un-biased

SOLIDARITY - We share interests and common

purposes with our members & other co-ops
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COOPERATIVE
PRINCIPLES

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VOLUNTARY AND OPEN MEMBERSHIP
• Cooperatives are voluntary
organizations, open to all persons
able to use their services and willing
to accept the responsibilities of
membership, without gender, social,
racial, political or religious
discrimination.

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DEMOCRATIC MEMBER
CONTROL
Cooperatives are democratic organizations
controlled by their members, who actively
participate in setting their policies and making
decisions.

Men and women serving as elected representatives

are accountable to the membership.

In primary cooperatives members have equal

voting rights (one member, one vote).

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MEMBER ECONOMIC PARTICIPATION

Members contribute equitably to, and

democratically control the capital of their
cooperative. At least part of that capital is
usually the common property of the cooperative.

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AUTONOMY AND INDEPENDENCE

Cooperatives are autonomous, self-help

organizations controlled by their members.

If they enter into agreements with other

organizations, including the government, or
raise capital from external sources, they do so
on terms that ensure democratic control by
their members and maintain their cooperative
autonomy.

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EDUCATION, TRAINING AND INFORMATION
Cooperatives provide education and training for
their members, elected officers, manager, and
employees so they can contribute effectively to
its development and growth.

They inform the general public - particularly

young people and opinion leaders - about the
nature and benefits of cooperation

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COOPERATION AMONG COOPERATIVES

Cooperatives serve their

members most effectively
and strengthen the cooperative
movement by working together
through local, national, regional
and international structures.
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CONCERN FOR COMMUNITY
cooperatives work
for the sustainable
development of
their communities
through policies
approved by their
members.
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 TYPES OF
COOPERATIVES

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TYPES OF COOPS....
(a)Credit Cooperative
(b) Consumers Cooperative;
(c) Producers
(d) Marketing Cooperative
(e) Service Cooperative
(f) Multi-purpose Cooperative;
(h) Agrarian Reform Cooperative
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TYPES OF COOPS....
(i) Cooperative Bank
(j) Dairy Cooperative
(k) Education Cooperative
(l) Electric Cooperative
(m) Financial Service Cooperative
(n) Fishermen Cooperative
(o) Health Services Cooperative 19
TYPES OF COOPS....
(p) Housing Cooperative
(r) Transport Cooperative
(s) Water Service Cooperative
(t) Workers Cooperative
(u) Agriculture Cooperative
(v) Other types of cooperatives as may
be determined by the Authority 20
ORGANIZATIONAL
STRUCTURE OF
COOPERATIVE

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 ORGANIZATIONAL STRUCTURE
Composed of members entitled to vote -
General Assembly Supreme body where all authorities
emanate from

Audit Board of Election

Committee Directors Committee
Conducts the financial, Prepares for
management audit Sets the strategic direction
and facilitates
and formulates policies
the conduct of
election
Treasurer Secretary
Fund and Asset Records and documents
Custodian /safeguard coop documents

Ethics Con Med Education & Others:

Committee Committee Training Com
Manages the
Credit Com General
Shall facilitate the day-to-day
Shall ensure that Manager operations
amicable settlement Plans and
the ethical values
of Intra-cooperative implements
and standards of
disputes and disputes education and Performs specific
the coop are
among members, training Management Staff tasks/ functions
adhered to.
officers, directors, programs related to the day-
and to-day operations
committee members
GENERAL ASSEMBLY
 The highest policy-making body of the co-op.

 Voting in primary cooperatives is strictly

ONE - MEMBER, ONE – VOTE. No proxies allowed
except for representative assembly.

 Quorum shall consist of at least 25% of all the

members entitled to vote. However in case of co-
op banks, quorum shall be as provided in Article
99 of the Code; In electric coops, 5% of all
members entitled to vote unless otherwise
provided in the by-laws
COOPERATIVE DEVELOPMENT AUTHORITY
DAGUPAN EXTENSION OFFICE
GENERAL ASSEMBLY

 REGULAR ASSEMBLY MEETING

held annually by the general assembly on a date
fixed in the by-laws, or if not, on any date within 90
days after the close of each fiscal year.

Provided, that notice of regular meetings shall be

sent in writing, by posting or publication, or thru
other electronic means to all members of record.

COOPERATIVE DEVELOPMENT AUTHORITY

DAGUPAN EXTENSION OFFICE
GENERAL ASSEMBLY
 SPECIAL ASSEMBLY MEETING
whenever necessary, a special meeting of the
general assembly may be called at any time by a
majority vote of the board of directors or at least
10% of the total members with voting right in the
cases specified in the by-laws.

At least one week notice must be sent to all

members who are entitled to vote.

COOPERATIVE DEVELOPMENT AUTHORITY

DAGUPAN EXTENSION OFFICE
OFFICERS OF THE COOPERATIVE

 Members of the Board of Directors

 General Manager
 Secretary
 Treasurer
 Members of the committees created by the GA
 Other positions as maybe provided in the
by-laws

COOPERATIVE DEVELOPMENT AUTHORITY

DAGUPAN EXTENSION OFFICE
OFFICERS OF THE COOPERATIVE

BOARD OF DIRECTORS

 Composed of not less than five (5)

nor more than fifteen (15) members
elected by the general assembly for
a term fixed in the by-laws but not
exceeding a term of two (2) years.

COOPERATIVE DEVELOPMENT AUTHORITY

DAGUPAN EXTENSION OFFICE
OFFICERS OF THE COOPERATIVE

BOARD OF DIRECTORS

 The BOD are responsible for strategic

planning, direction-setting, policy-
formulation and by resolution, exercise
all powers of the cooperative that are not
reserved for the general assembly.

COOPERATIVE DEVELOPMENT AUTHORITY

DAGUPAN EXTENSION OFFICE
OFFICERS OF THE COOPERATIVE

BOARD OF DIRECTORS

 Review the annual plan and budget and

recommend for the approval of the GA

 Evaluate the capability/qualification and

recommend for the approval of the GA the
engagement of the services of an External
Auditor

 Appoint and terminate based on just cause

the General Manager

COOPERATIVE DEVELOPMENT AUTHORITY

DAGUPAN EXTENSION OFFICE
OFFICERS OF THE COOPERATIVE

BOARD OF DIRECTORS

 Formulate and review the vision, mission

and goals of the cooperative

 Establish performance evaluation system at

all levels

 Review and approve the organizational and

operational structures

COOPERATIVE DEVELOPMENT AUTHORITY

DAGUPAN EXTENSION OFFICE
OFFICERS OF THE COOPERATIVE
GENERAL MANAGER

 Represent the cooperative in any

agreement, contract, business dealings,
and in any other official business
transaction as may be authorized by the
BOD

 Ensure compliance with all

administrative and other requirements of
regulatory bodies

COOPERATIVE DEVELOPMENT AUTHORITY

DAGUPAN EXTENSION OFFICE
8 CO-OP ELEMENTS

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1. MEMBERSHIP
The membership support the co-op by

- Participating in the Capital build-up

programs
- Depositing
- Borrowing wisely
- Paying obligations promptly
- Participating in co-op activities

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2. LEADERSHIP
The coop has competent leaders in
terms of:

ATTITUDE-commitment,
honesty, integrity and the
sincere desire to make this
world a better place to live in
for everyone;
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2. LEADERSHIP
KNOWLEDGE - the necessary
knowledge to run the coop as
a business e.g. accounting,
human relations and a clear
idea of the coop VMG in order
to provide the direction and to
serve as model/example
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2. LEADERSHIP
SKILLS - communicating
skills, relationship skills,
skills in financial analysis
that can contribute to the
coop;
2ND LINERS – development
of other leaders along the
way
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3. MANAGEMENT & STAFF
The coop has competent and diligent
staff with;

• The right and adequate training

for the job;
• Just and adequate compensation;
• Opportunities for advancement

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4. SYSTEMS & PROCEDURE
The following systems are installed and
followed;

•Accounting system;
•Internal control system;
•Management Information System

The officers and members meet often (at

least once a month). The officers use a
problem solving approach whenever
issues and concerns are raised.
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5. POLICIES
There is a continuing written
policies.
The policies are clear-cut,
providing a balance between the
interests of the members and the
coop.
All concerned are properly
informed regarding these
policies.
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6. FINANCING
The internal capital is more than
50% of the total capital. The coop
is able to give a reasonable return
on investment to its members,
and is able to pay the cost of
borrowed capital (both the
principal and the interest).

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7. SUPPORT SYSTEM
• There is a continuing education
program.
• A program of pre-membership
education process to potential
members
• An on-going information/
communication process thru which the
coop maintains the support and
cooperation of members, e.g.
ownership mtgs., newsletter, fora, etc.
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8. SERVICES

The members are satisfied with

the services given by the co-op,
the coop officers additional
services, at least once during the
last three years.

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Management of Cooperatives
1. PLANNING
 PLANNING….
 The planning process will set goals and
defining the actions necessary to achieve
those goals. To achieve that, they will involve
into three steps:
 A) deciding which goals the organization
should pursue;
 B)deciding what courses of action to adopt
to attain those goals; and
 C)deciding how to allocate organizational
resources.
WHAT ARE THE COMMON PLANS WE SHOULD
HAVE IN THE COOPS?
 1. Strategic Plan – long term plan (usually 5
years or more) that represents the major
activities and programs towards the coop’s
vision.
 Where are we now? (Our Baseline)
 Where do we want to go? (Our Target)
 How do we get there? (Our Strategy)
 2. Annual Plan and Budget – a yearly
description and identification of coop’s activities
and programs for the year including its costs. It
must be anchored on the strategic plan.
PLANS…

 3. Monthly Workplans – detailed activities,

actions and strategies per Key Result Area
(KRA) done and evaluated monthly.

 4. Other Plans: Risk Management Plan,

Disaster Plan, Succession Plan, Gender
Equality Plan, etc.
2. ORGANIZING
ORGANIZING…
 The organizing process will determine:
a) the tasks to be done;
b) who will do them; and
c) how those tasks will be managed and
coordinated.
At this stage managers establish the
structure of working relationships between
organization members that best achieves
organizational goals. It involves grouping
people into departments according to the
tasks they perform.
ORGANIZING…
 Then the managers need to lay out lines of
authority and responsibility between group
and people. The outcome of the process is
an organizational structure, the formal
system of reporting relationships.

 The various coop’s policies (credit and

collection, internal control, membership
policy manual, CBU policies, etc.) are done
and developed further.
3. STAFFING
 STAFFING…
 Its the process of acquiring, deploying, and
retaining a workforce of sufficient quantity and
quality to create positive impacts on the
organization’s effectiveness.
 Coops must have a Human Resource Policy that
includes policies from hiring to firing/retiring.
 Putting people at the right position, giving them
the right salary and must deliver the required
output.
4. LEADING/DIRECTING
LEADING/DIRECTING…
 The leading will manage the capacity the members
of work groups toward the accomplishment of
organizational goals. The leaders determine
direction, articulate a vision, and energize
employees so that they can play a part in achieving
goals. It requires a number of skill sets including
understanding individual or group behavior
dynamics, the ability to motivate employees, be
affective communicators, able to envision future
and share that vision and 3C’s Leadership Model.
LEADING… 3 CS OF MANAGEMENT

 1. Challenge – present a challenge that will test

their knowledge, skills, egos and loyalty all
towards the benefit of the organization and
stakeholders.
 State a Challenging Vision, Demand the
Impossible, Ask Challenging Questions, Create
a Culture of Continuous Improvement,
Benchmark the Best and Argue with Success
3 CS…
 2. Confidence - a major responsibility of a
manager is to build confidence and motivate
his or her employees so that they will believe
in their ability to reach their objectives.

 Expand People's Self-Image, Keep

Ownership Where It Belongs, Empower Your
People, Recognize Good or Improved
Performance and Drive Out Fear
3 CS…

 3. Coaching is the process of advising people in

a way that facilitates their success. It may take
various forms, from training to offering a
broader perspective. Coaching can help
employees to better understand how their
efforts fit into the larger strategy, thereby
allowing them to make better decisions.
3CS… COACHING

 Find the Right Balance, Make People Think for

Themselves, Show People What Good
Performance Looks Like, Be a Facilitator and
Give Feedback
5. MARKETING

 Marketing is a form of communication

between you and your customers with the
goal of selling your product or service to
them. Communicating the value of your
product or service is a key aspect of
marketing.
5 PS OF MARKETING
MARKETING…

 The Five Ps of Marketing: Product,

Place,
Promotion, Price, and People.
 If you're pouring money into marketing but
nothing's happening, you need to evaluate your
marketing mix.
MARKETING….

 Product. Your coop should solve an urgent need

or pain for the customer. Your product needs
the right features.
 Place. Location or place matters. Often coop
businesses pay for prime locations so they can
have the needed foot traffic. You want to be
located on a highly coveted corridor, in a
location that provides you easy access to the
target customer.
MARKETING….

 Promotion. Without proper promotion to attract

your target customer, you won’t grow your
revenue. Good promotion starts with a budget
and marketing plan.
 Price. When pricing your product you must
know four things: your cost, what the
competition is charging, the standard mark-up
or profit margin in your industry, and the value
to the customer.
MARKETING….

 People. Profile, needs, wants and requirements

of your members and members to be. Is there a
fit between what your member wants to the
products and services you have? Are these
people (members) willing to pay the price?
6. CONTROLLING
 CONTROLLING…
 The last process of management is controlling.
It will monitor the performance of the
organization and the progress in implementing
strategic and operational plans. They will
identify the deviations between planned actual
actions. Then taking corrective action, so that it
will ensure the organization is moving toward
the achievement of its goals. This involves
designing appropriate measurement and
information and control systems.
REPORTS REQUIRED FOR
COOPERATIVE

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REQUIRED REGULAR REPORTS

The following reports shall be submitted to the

Authority:

1. Cooperative Annual Progress Report (CAPR)

2. Audited Financial Statement
3. Socio Audit Report
4. Performance Report
5. List of Officers and Trainings undertaken/completed

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FILING

All registered cooperatives shall file with the

Authority a copy of the required reports either
through personal, registered mail, courier or
electronic means, within 120 days from the
end of every calendar year.

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COOPERATIVE AS A
BUSINESS ENTITY

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AS A BUSINESS...

1. BIR REGISTRATION
 Articles of Cooperation and By-laws

 Certificate of Registration from CDA

2. Tax Identification Number (TIN)

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AS A BUSINESS...

3. Book of Accounts
- yearly, on or before the last
working day of December
- 2 Columnar, Cash Receipt,
Cash Disbursement,
Ledger,Journal
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AS A BUSINESS...

4. Certificate of Tax Exemption

* Certified true copy of Articles of
Cooperation, By-laws and
Certificate of Registration
* Application Letter
* BIR Registration
* TIN of member or cedula 74