A cooperative solution

Self-governing co-operatives remain significant in certain sectors of some national economies, accounting for 83% of agricultural production in the Netherlands and 55% in Italy, more than 50% of the banking services market in France and 21% of Spanish healthcare.

by Strategy + Business
Last Updated: 23 Jul 2013

Mondragon Corporacion Cooperativa is the largest corporation in Spain's Basque region, German retailer the REWE Group has E40 billion of annual sales, and the Dutch Rabobank boasts 9 million customers.

Co-ops are generally more financially successful than is realised and although their highly participative governance structure can appear an obstacle to efficiency, the need for consensus can also make for better implementation once a decision is made.

Other suggested strengths include customer loyalty and reduced pressure for short-term results - and therefore the ability to plan for the long term. However, the demutualisation trend in the UK underlines that the success of cooperatives is not assured.

A new European statute will allow co-ops to operate across Europe as single legal entities, and may help them compete more effectively with conventional multinationals.  

Source: A Cooperative Solution
Riccardo Lotti, Peter Mensing and Davide Valenti, 
Strategy + Business, issue 43, summer 2006

Review by Steve Lodge

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