UNTFSSE Award Series (2023 ICA Global and European Cooperative Research Conference): Special Issues of Owner-control and Democracy within Co-operative Context

Abstract - EN

Reflecting co-operative principles and values, co-operatives are democratic organizations owned and controlled by their members. Activity and awareness of the membership is vital for co-operative’s success. However, we do not fully understand how owner-control and democracy operate in practice. This qualitative empirical study of governance and member-control in large co-operatives helps to fill the gaps in our knowledge. The research seeks answers to the following questions: how does the management interpret the state and means of member control in a co-operative context? How do the interpretations reflect the democratic nature of co-ops?

The data was collected from representatives of both operational management and chairs of boards and supervisory councils through 35 thematic interviews The interviewees represent 7 of the largest co-ops in Finland. The analysis was conducted via qualitative content analysis. Atlas.ti version 22 software was used as a technical aid to code the data.

Based on the findings we argue that the members have a vote, but no voice. Democracy is associated with the members’ right to stand for election and become elected to different governance bodies. In decision-making membership is not adequately consulted, and firm efforts to increase their participation are very limited. Members are generally perceived as passive and reluctant to participate. Members of producer co-operatives, however, are perceived as more active and committed compared to consumer co-operatives. The lack of member engagement can arise from a combination of economic prosperity and a belief in the competence of management. Group structures and chain management may hinder member input, leading to a “one size fits all” approach. In the context of owner control, governance is recognized as a crucial aspect. Nevertheless, it appears that operational management plays an outsized role. They not only act as the primary decision-makers and policy-shapers but also represent the co-operative externally.

We conclude that democracy is mainly interpreted through its electoral conception whereas the quality of democracy remains as an open question since especially in consumer co-operative context the operational management seems to hold an excessive power and thus, the governance system neither actualises its potential nor meets the original ideas of co-op movement.  Managerialism, organization size, and a lack of solidarity and democracy contribute to the dysfunction of owner governance and owner-control. The study raises questions about the consequences of a lack of visible governance in consumer and service co-operatives and emphasizes the need for increased member involvement and interactive dialogue.