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Understanding organizations
People need frameworks to aid their understanding of their organizations and an enterprise model provides such a framework. It is important that leaders understand the true nature of organizations that they seek to lead, and what it takes to make them function effectively.

Organizations are tools. To properly understand cooperatives we must start by understanding the reality of organizations. Organizations are tools that need to be specifically designed to achieve their purpose, as with all tools the more specifically designed the tool the more effective it will be. For a cooperative organization to be successful it needs to have at least ten critical features built into its constitution, all of which need to be supported by the very specific policies, practices and systems that can sustain them. Cooperatives are organizations that need to be based upon practical cooperation, for a cooperative without cooperation is like a ship without a rudder, sails or an engine.

People need to know both the purpose and the function of their enterprise. If any organization is to be successful then all of the people involved in running it must fully understand not only the purpose of their organization but its function. Effective organizations focus upon a very specific function. The reason why the investor company is currently the dominant form of economic organization is that they focus upon a very specific function - making money for their owners. Cooperatives are at their best when they focus upon their function, which is to intervene in a specific marketplace  in the best interest of their members.

Cooperatives are about exercising the collective power of their members within a specific market. When co-ops seek to do this they are often challenging powerful elites or those that are reaping substantial benefit within markets that are neither free nor fair. In order to respond to the reaction of the existing powerful players dominating markets, cooperators often discover the need to secure wider social and political change. However, it is a common mistake to seek to embrace these functions within the same organization. Co-ops must be run for the benefit of all members' not just activists.

Involving Children
Rural Shop

Organizational culture is the collective behaviour of the people who are part of an organization and the meanings that they attach to their actions. Culture includes the organization’s values, visions, and norms, working language, systems, beliefs and habits. It is a set of shared assumptions that guide interpretation and action in an organization by defining appropriate behaviour for various situations. Organizational culture affects the way people interact with each other, with clients, and with other stakeholders.  Clearly it is critical that the prevailing culture within cooperatives reflects their status as a member-controlled enterprise.

Organizational risk.
We need to understand that without a very robust system of oversight all organizations, sooner or later, transmute into entities that primarily advance the interests of those running them or of those controlling the capital that they need to operate.

September 2014 © Edgar Parnell 2014

Copyright 2015. All rights reserved.
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