PART I : INTRODUCTION OF COOPERATIVE & MANAGEMENT
Service Cooperative is one which engages in medical and dental care,
Unit 1: 1.1 Concepts and Principles of Cooperatives
Cooperative – is an association of persons who have voluntarily joined together to
achieve a common end through the formation of a democratically controlled
organization, making equitable contribution to the capital required and accepting a
fair share of the risks and benefits of the undertaking in which the members actively
participate. (ILO-International Labour Organization)
Cooperative –is a duly registered association of persons, with a common bond of
interest, who have voluntarily joined together to achieve a lawful common social or
economic end, making equitable contributions to the capital required and accepting a
fair share of the risks and benefits of the undertaking in accordance with universally
accepted cooperative principles. (Art. R.A. 6938-Cooperative Code of the Philippines)
Cooperative - is an autonomous and duly registered association of persons, with a
common bond of interest, who have voluntarily joined together to achieve their social,
economic, and cultural needs and aspirations by 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 cooperative principles. (Art. 3 R.A. 9520-Cooperative Code of the
Philippines)
The type of Cooperative may fall under any of the following:
1. Credit Cooperative is one that promotes and undertakes savings and lending
services among its members.
2. Consumers Cooperative is one of the primary purposes of which is to procure and
distribute commodities to members and non-members.
3. Producers Cooperative is one that undertakes joint production whether
agricultural or industrial. It is formed and operated by its members to undertake the
production and processing of raw materials or goods produced by its members into
finished or processed products for sale by the cooperative to its members and non-
members.
4. Marketing Cooperative is one which engages in the supply of production inputs
to members and markets their products.
5.
hospitalization, transportation, insurance, housing, labor, electric light and power,
communication, professional and other services.
6. Water Service Cooperative is one organized to own, operate and manage waters
systems for the provision and distribution of potable water for its members and their
households.
7. Housing Cooperative is one organized to assist or provide access to housing for
the benefit of its regular members who actively participate in the savings program for
housing.
8. Transport Cooperative is one which includes land and sea transportation, limited
to small vessels, as defined, or classified under the Philippine maritime laws,
organized under the provisions of this Code.
9. Multipurpose Cooperative is one which combines two (2) or more of the business
activities of these different types of cooperatives.
Unit 1: 1.1 Concepts and Principles of Cooperatives:
Article 5 of the Cooperative Code of the Philip-pines is about the definition of
terms:
1. Member - includes a person either natural or juridical who adhering to the
principles set forth in this Code and in the Articles of Cooperation, has been admitted
by the cooperative as member.
2. General Assembly - shall mean the full membership of the cooperative duly
assembled for the purpose of exercising all the rights and performing all the
obligations.
3. Board of Directors - shall mean that body entrusted with the management of the
affairs of the cooperative.
4. Committee - shall refer to anybody entrusted with specific functions and
responsibilities under the bylaws or resolution of the general assembly or the board
of directors.
5. Articles of Cooperation -means the articles of cooperation registered under this “The art of getting things done efficiently and effectively through people.”
Code and includes a registered amendment thereof.

6. Bylaws - means the bylaws registered under this Code and includes any registered
amendment thereof.

7. Registration - means the operative act granting juridical personality to a proposed

cooperative and is evidenced by a certificate of registration.

8. Cooperative Development Authority - refers to the government agency in charge

of the registration and regulation of cooperatives as such hereinafter referred to as
the “Authority”.

9. Universally Accepted Principles - the body of cooperative principles adhered to
worldwide by cooperatives.
10. Representative Assembly - the full membership of a body of representatives
elected by each of the sectors, chapter or district of the cooperative duly assembled to
exercise such powers delegated unto them in accordance with its bylaws.
11. Officers of the Cooperative - include the members of the board of directors,
members of the different committee created by the general assembly, and the
executive officers.
THE MANAGEMENT FUNCTIONS:
Planning – is the process of setting performance objectives and determining what
actions should be taken to accomplish them. It involves identifying ways to achieve
desired results.
Organizing – is the process of assigning tasks, allocating resources, and coordinating
the activities of individuals and groups to implement plans
Staffing - involves recruitment, selection, placement, and development of people

12. Performance Audit - shall refer to an audit on the efficiency and effectiveness of responsible for the achievement of goals and objectives.
the cooperative.

13. A Single-Line or Single-Purpose Cooperative - shall include cooperative Directing – is the process of influencing people’s enthusiasm to work hard and,
undertaking activities which are related to its main line of business or purpose. inspiring their efforts to fulfill plans and accomplish objectives.

14. Service Cooperatives - are those which provide any type of service to its Controlling – is the process of measuring work performance, comparing results with
members, including but not limited to, transport, information and communication, objectives, and taking corrective actions as needed.
electric, health services, and education.

Unit 1: 1.2 The basic concepts and principles of management

Taylor’s Four Principles of Scientific Management:
Management is the process of planning, organizing, leading, and controlling a
1. Develop a science for each element of an individual’s work, which replaces
business’s financial, physical, human and information resources in order to achieve its
the old rule-of-thumb method.
goals” R. W. Griffith & R. J. Ebert, Business, 1991).

“The process by which human efforts are coordinated and combined with other
resources to accomplish organizational goals and objectives.”
2. Scientifically select and then train, teach, and develop the worker.
(Previously, workers chose their own work and trained themselves as best they
could.)
3. Heartily cooperate with the workers to ensure that all work is done in
accordance with the principles of the science that has been developed.
10. Order - organizational order for materials and personnel is essential.
11. Equity - All organizational members are entitled to be treated with justice and
respect.
12. Stability of tenure - provision for security of employment.

4. Divide work and responsibility almost equally between management and 13. Initiative - allowing subordinates to use their creativity and resourcefulness in
workers. Management takes over all work for which it is better fitted than the the performance of their tasks.
workers.
14. Esprit de corps - harmony and unity through teamwork. Union is strength, and it
comes from harmony among the personnel.

Fayol’s Fourteen Principles of Administrative Management:

1. Division of work - assigning of work by specialization, produces more and better

work with the same effort.

2. Authority - is the right to give orders and the power to exact obedience. (Authority
creates responsibility)

3. Discipline - obedience and respect between a firm and its employees based on
clear and fair agreements is essential to the functioning of any organization.

4. Unity of command - An employee should receive orders from only one superior.
Employees cannot adapt to dual command.

5. Unity of direction - Organizational activities must have one central authority and
one plan of action.

6. Subordination of individual interest- the interests of one employee or group of

employees are subordinate to the interests and goals of the organization and cannot
prevail over it.

7. Remuneration – Salaries and wages are the price of services rendered by

employees

8. Centralization - the optimum degree of centralization varies according to the

dynamics of each organization.

9. Scalar Chain - A chain of authority exists from the highest organizational

authority to the lowest ranks.