Cooperative comes from English co-operation which means joint effort. In other words it means that all work carried out together can actually be called a cooperative. However, what is meant by cooperatives here is a form of regulation and certain objectives as well, companies established by certain people, to carry out certain activities.

Understanding cooperatives according to a number of experts

  • Muhammad Hatta (1994): cooperatives were established as a fellowship of the weak to defend their living needs. Achieve the necessities of life with the lowest possible cost, that is what is intended. In cooperatives take precedence over common interests, not profits.
  • ILO (cited by Edilius & Sudarsono, 1993): Cooperatives are a group of people, usually with limited economic capacity, who through a form of democratically supervised enterprise organization, each making an equal contribution to the capital needed, and are willing to bear risks and receive rewards in accordance with the business they are doing.
  • Mladenata, in his book ” Histoire Desdactrines Cooperative” argues that cooperatives consist of producers who volunteer to achieve common goals, by exchanging services collectively and sharing risks together, by working on resources contributed by members.
  • E Erdman, in his book ” passing monopoly as an aim of Cooperative” that cooperatives are joint ventures, are legal entities, members are owners and who use their services and return all revenues above costs to members in accordance with the transactions they run with cooperatives.

In article 33 of the 1945 Law and Law No. 25 of 1992 explains that “the economy is structured as a joint effort based on the principle of kinship” and paragraph (4) states that “the national economy is based on economic democracy with the principles of togetherness, efficiency, independence, and by maintaining balance” whereas according to article 1 of Law No. . 25/1992, what is meant by cooperatives are:

” Business entities consisting of people or cooperative legal entities by basing their activities based on cooperative principles as well as a people’s economic movement based on the principle of kinship.

Cooperative Principles

Rochale’s principles are used as examples and guidelines by almost all the world cooperative movements. Although the Rochdale cooperative principles are not carried out entirely, they are adapted to the environment and culture of the community where the cooperative stands. However, according to fauguet (1951), said that at least there are 4 principles that must be fulfilled by every business entity that wants to name a cooperative diriniy:

  1. There is a regulation on organizational membership based on volunteerism
  2. There are provisions or regulations regarding equal rights between members
  3. There are provisions or regulations regarding the participation of members in cooperative management and business
  4. The provision of a balanced comparison of the results of operations obtained, in accordance with the use of cooperative services by its members.

The role of cooperative principles

The principle of cooperatives or often also referred to as the basic joints of cooperatives is a basic guideline that animates every move of cooperative management and business.

These principles also have an important role in determining the pattern of cooperative business management. The role is broadly as follows:

  • As a guideline for implementing cooperative efforts in achieving goals
  • As a characteristic of cooperatives, which distinguishes it from other forms of business.

Rochdale cooperative principles

The principles of rochdale cooperative (The Principle of Rochdale) are as follows:

    • The goods sold are not counterfeit goods and the scales are correct
    • Sale of goods in cash
    • Sales price according to market price
    • The remaining results of operations (profits) are distributed to members according to the consideration of the number of purchases per each cooperative member
    • Each member has one vote
    • Neutral in religious politics

But in its development the sixth cooperative principle above increased to become several other principles

    • There are restrictions on interest on capital
    • Membership is voluntary
    • All members contribute capital (helping each other to achieve salvation independently)

Prinisp – cooperative principles according to ICA

Through the International Cooperative Alliance (ICA) congress in London in 1934, the general formulation of cooperative principles was agreed:

    • Membership is open
    • Supervision is carried out democratically
    • The distribution of business results is based on their respective participation in the cooperative business
    • Limited interest on capital
    • Trading system is run in cash
    • Neutral in politics
    • Carry out education

But at the ICA session in Paris in 1937, the ICA decided to include the first four principles as ICA’s own principles. Then in the congress, the cooperative is basically an alternative form of company, which was established by members of the community with a weak economy, which due to economic limitations are unable to involve themselves in economic cooperation through other forms of enterprise than cooperatives.

Cooperative Purpose

  • Judging from the purpose of his business

The objective of a cooperative business is basically to fight for the interests and improve the economic welfare of its members. Because the members of the cooperative as a whole are made up of different community groups, the purpose of the cooperative effort in particular will be determined by the economic problems faced by its members.

The purpose of cooperatives, for example, is to provide the basic needs of their members. The members knowingly unite themselves so that they can meet their daily needs at an affordable price.

  • In terms of relations with the state

As one of the economic actors, the role of cooperatives in a country’s economy will be largely determined by the economic system and political system adopted by the country concerned. The development of cooperatives in many countries, we can see that the existence of cooperatives in general is very beneficial for the development of the country’s economy. This is viewed in terms of historical and economic terms. From a historical perspective the cooperative is an economy rooted in the lower classes of society. From an economic perspective, the existence of cooperatives will greatly assist the government in realizing a fairer economy. And in general the cooperative is very supported by the government.

Cooperative function

The establishment of cooperatives was originally intended to help farmers from agricultural prices carried out by middlemen. This happened at the beginning of the industrial revolution in Europe, where the prices of agricultural products were mocked by middlemen, besides that the workers were ignored by capitalists.

This dependence is mainly caused by the economic situation of farmers and workers who are still subsystems (uncertain). To overcome this, farmers borrow from middlemen by guaranteeing their agricultural output, while the workers are under intense pressure from the capitalists in carrying out their work.

Beberapa pandangan mengenai fungsi koperasi

The function and role of cooperatives in society at least can be grouped 3 streams. As stated by Caseselman (1989), the three schools are:

  • The yardistick flow

In his view, the function and role of cooperatives is basically only as a benchmark, in the sense of a capitalist economic system. The target of the cooperative movement is only in terms of eliminating unfair competition practices in the capitalist economic system.

  • Socialist flow

According to the view, this cooperative flow has different functions and roles from the Yardstick flow. This flow views the capitalist economic system as the origin of the oppression of the people at large. So the presence of many cooperatives in capitalist society must function as a force to replace the capitalist economic system

  • Commonwealth flow

This flow can be categorized as middle flow. On the one hand, like the Yardstick flow, this flow views the capitalist economic system as an economic system that must be destroyed, but as the socialist flow, agrees that the capitalist economic system must be corrected, but not as radical as the socialist flow.

According to this flow the function and role of cooperatives in capitalist society is not merely a measure of the antidote, but as an alternative to the form of capitalist damage. As an alternative form of company, the role of cooperatives must continue to be improved and developed as a community movement in order to realize a cooperative society

Function in the economic field

    • Cultivate a more humane business motive.
    • Develop a more equitable method of sharing the remainder of the results of operations
    • Fighting monopolies and other forms of capital concentration
    • Offering goods and services at lower prices
    • Increase member income
    • Cultivating honesty and openness in managing the company
    • Simplify and streamline commerce
    • Maintaining a balance between demand and supply, between needs and meeting needs,
    • Train the community to use their opinions actively

Function in the social field

  • Educate members to have a spirit of cooperation, both in solving their problems, and in building a better social order in society.
  • Educate members to have a spirit of sacrifice, in accordance with their abilities, for the realization of social order in order to create an advanced, just and civilized society.
  • Encouraging the realization of a social order that is democratic, provides and protects the rights and obligations of everyone.
  • Encouraging the realization of a peaceful community life.

Types of cooperatives

Types or groupings of cooperatives are grouping cooperatives into certain groups based on certain criteria and characteristics. In its development, this diversity is certainly influenced by the background of the formation and goals to be achieved by each cooperative. The cooperatives can then be grouped into several large groups which can be grouped into more specialized groups.

Based on the business field

  • Consumers cooperatives are cooperatives engaged in the supply of consumer goods needed by their members. The type of consumption served by a consumption cooperative is very dependent on the variety of members and the work area in which the cooperative is established.
  • Production cooperatives are cooperatives whose main activity is to process raw materials into finished / semi-finished goods. The aim is to unite the capabilities and capital of its members in order to improve certain items through a process that is leveled management and has its own.
  • Marketing cooperatives, are cooperatives that were formed primarily to help their members in marketing goods that produce. The aim is to simplify the trade chain, and reduce the smallest possible involvement of intermediaries in marketing the products produced.
  • Credit / savings and loan cooperatives are cooperatives engaged in the savings of members to lend back to members who need capital assistance for their businesses, in addition, savings and loan cooperatives also aim to educate members to be frugal and fond of saving and avoiding members from loan sharks, loan sharks .

Based on the type of commodity

Based on the type of commodity, the cooperative can be divided into:

  1. Extractive cooperatives are cooperatives that do business by exploring or utilizing natural resources directly without or with little change and the nature of the natural resources
  2. Agricultural and livestock cooperatives are cooperatives that carry out business related to commodities. These cooperatives consist of farmers or are associated with agricultural businesses. These cooperative activities usually:
    • Exploitation of seeds, sprays and other agricultural equipment
    • Manage agricultural products
    • Market the processed products of agricultural commodities
    • Provide capital for farmers
    • Develop cooperative skills
  1. Industrial and handicraft cooperatives, are cooperatives that carry out their business in certain industries and crafts. His efforts include the procurement business, processing raw materials into finished goods or a combination of both.
  2. Service cooperatives, are service cooperatives almost the same as other industrial cooperatives, the difference is that service cooperatives carry out certain activities. Like industrial cooperatives, the purpose of service cooperatives is to unite the economic potential of each of its members. Examples are audit services cooperatives, transportation service cooperatives, and others

Based on the profession of its members

The term profession actually has a meaning as the type of work carried out by people who have certain expertise or skills based on an ethical code.

Based on the member profession, cooperatives can be divided into:

  • Employee Cooperative
  • Civil Servants Cooperative
  • Land, sea, air and police lifting cooperatives
  • Cooperative large traders
  • RI Veterans Cooperative
  • Fishermen’s Cooperative
  • Craft cooperatives, etc.

Based on the working area

The area of ​​cooperative work here is the breadth of area covered by a cooperative business entity in serving the interests of its members or serving the community. Based on the working area, cooperatives are classified as follows:

  • Primary cooperatives are cooperatives consisting of people who are usually established in the scope of certain smallest areas
  • Central cooperatives, are cooperatives whose aim is to strengthen the economic sovereignty of cooperatives that resonate within them
  • Joint cooperatives, are cooperatives that are almost the same as the central cooperatives, joint cooperatives not consisting of people, but members of central cooperatives originating from certain regions. The purpose of the formation was to strengthen the position of cooperatives that joined in the wider work area. Example of GKBI
  • Parent cooperatives, are cooperatives with members as central cooperatives or joint cooperatives domiciled in the national capital. Its function is as a mouthpiece of cooperatives that become members in dealing with national institutions related to the coaching of similar cooperatives in other countries or organizing organizations at the national and international level. Examples of parent cooperatives for civil servants (IKPN), parent cooperatives for employees (Inkopkar), and so forth.


by Abdullah Sam
I’m a teacher, researcher and writer. I write about study subjects to improve the learning of college and university students. I write top Quality study notes Mostly, Tech, Games, Education, And Solutions/Tips and Tricks. I am a person who helps students to acquire knowledge, competence or virtue.

Leave a Comment