Global Co-Operative Enterprises

Activity 5 – Global co-operative enterprises

Case Studies


Amul is a union of milk co-operatives in the Indian state of Gujarat. Amul means ‘priceless’ in Sanskrit and was formed as a marketing organisation for dairy farmers in 1946. Since then it has continued to grow in both size and reputation into India’s largest food products marketing organisation.

Amul enables dairy farmers to dispose of their milk which might otherwise be difficult, especially in times when milk is plentiful. It produces butter and spreads, cheeses, sweets, milk, ghee, milk powder, condensed milk, ice cream, chocolate, lassees and other milk based drinks. Amul have recently opened ‘utterly delicious’ parlours serving drinks and ice creams, a further outlet for their product.

Twice a day everyday Amul’s massive distribution network collects milk from almost 12 million farmers, transports it to 200 dairy plants where it is tested, graded, processed, packaged and sent to the market in almost 800 big and small towns. Geographical information systems help to minimize the delays to this process. In addition, a considerable export business to the USA, Gulf Countries and Singapore has been developed and inroads into European markets are increasing as EU subsidies to farmers are reduced. Amul has established what it calls ‘Distribution Highways’ for four types of produce including fresh, chilled, frozen and ambient products.

Advertising and marketing have been key elements in the phenomenal success of Amul. The turning point came in 1966 when its advertising campaign launched the ‘Amul Moppet’, a small chubby faced girl on advertising hoardings. Indeed, Amul advertising has been unafraid to make an impact by commenting on current events, scandals and conflicts such as religious movements, heroin addiction and corruption. For instance, when the US company Enron collapsed amid allegations of corruption, one of their ads carried the line ‘Enr On or Off?’ The creative marketing of solid and recognizable brands has enabled Amul to build a distinct identity and carve out a significant space in the market. The co-operative is in direct contact with the customer whose comments are fed back directly to the farmer. In short, Amul has become an example of how to excel in procurement, processing, marketing and brand building.

Amul helps members with planning, production and marketing skills and provides training in essential issues such as cleanliness, breeding, committee and leadership skills. For instance, in 2004 3,189 women took part in self-managing leadership training. Amul has formed a democratic structure which has organized individual farmers into village co-oerative societies and larger member unions.

Amul cont.

However, it has not always been so straightforward. Amul was set up to deal with the many problems which are faced by the millions of small dairy farmers in India. When it formed many farmers were isolated and had difficulty in getting milk to a market before it went off whilst others found it hard to dispose of all their milk. Some were being squeezed by middlemen and found themselves at the mercy of loan sharks or working as casual labourers with no security. Indeed, the ‘Amul Pattern’ has been promoted as a model for rural development which emphasizes secure livelihoods, regular employment, empowerment of women, education of children as well as diversification and income generation for farmers. Amul considers this a more sustainable basis for the development of India’s economy, and especially the eradication of poverty, that the current growth in call centres and other forms of outsourcing that have mushroomed in India in recent years.

In recognition of its success the government even set up an agency to help others replicate the Amul model. However, this has led to fears of the government taking over elements of co-operative business. This has been fiercely resisted by co-operatives which are committed to independence and autonomy.


2.41 million members in 11,600 village societies. 12 district societies.

7.4 million litres of milk p/day and 2.08 billion litres p/yr

Turnover $US 672million

Murray Goulburn

Murray Goulburn Co-operative was formed in 1950 and has grown to become the largest processor of milk in Australia and the nation’s largest exporter of processed food. With eight plants located throughout the state of Victoria, Murray Goulburn processes over 35% of the nation’s milk supply into quality products which are sold on both domestic and export markets.

The key products for Murray Goulburn are butter, cheese, milk powders and UHT products. It produces a wide range of food ingredients. A range of butters and spreads, milks and cheeses are sold through the Devondale brand name. MG Nutritionals is a subsidiary business that was created to develop the rapidly expanding business in nutritional supplements and specialized proteins including whey and milk protein concentrates and natural milk minerals. Murray Goulburn have developed long-term and close relationships with the key Australian retailers as well as internationally. Strategic alliances with other businesses have enable the co-operative to strengthen its grip on the supply chain. Murray Goulburn also has 26 stores mainly located throughout Victoria. These service the needs of the farming community with particular emphasis on dairy hygiene, animal health, pasture renovations, traditional and electrical fencing and special farming requirements.

Research and Development is a key factor in Murray Goulburn’s on-going success. New products, such as a liquid cheddar cheese, and improvements to operational processes are continually being developed through consultation with customers and members. Its global capacity and network of contacts helps to ensure that Murray Goulburn remain at the forefront of dairy technology and future product development.

Fourteen farmers formed the co-operative in 1950 in order to create secure and regular markets for their milk. Today the co-operative has more than 3,000 members and is committed to its co-operative ideal.

 In 2004-5

• 3,100 members

• Milk intake 3.55 billion litres – 35% of Australian milk production

• $1.87 billion turnover

• 9% of world dairy trade

• Exporting to over 100 countries

• Eight manufacturing sites located throughout Victoria

• 2,300 employees

Mountain Equipment Co-op

In the 1970s a group of students were huddled together in a tent on a snow-swept mountainside, sheltering from a savage storm. They spoke about their problems in getting the equipment they needed to explore the Canadian mountains – conventional shops were not meeting their needs. Gradually they realized that this was something they could do for themselves. To cut a long story short, by 2006 MEC had over two million members in 192 countries with stores across Canada and an international web store and phone/mail service.

They achieved this position through hard work directed by a strong vision. Initial experiments in setting up a co-op were successful and they realized that business could be done differently, it could be driven by their own needs rather than by anonymous customers in the marketplace. For instance, they did not just develop products for the sake of changing fashions. Rather, their members told them about the problems and advantages of coats, tents and other equipment. New products were then developed to meet these needs, such as a lightweight, tight fitting coat for rock climbers. MEC aims to both meet and surpass the expectations of member which means it is usually ahead of its competitors.

The idea of leaving a ‘footprint’ is familiar to mountain walkers but MEC is aware that it also leaves an ethical and environmental footprint which affects the countryside as well as the conditions of workers who manufacture their products. For this reason they monitor the conditions of factory workers, in developing countries and elsewhere, as well as the environmental costs making of the equipment itself. MEC supports manufacturers to meet their ethical and environmental guidelines by working with them to improve standards.

Profits are ploughed back into the business and are distributed to members according to how much they purchased. They are also used to support and develop community, educational and environmental projects and in 2004 over $1.6 million was devoted to such purposes. MEC members also like to see these projects taking place and, as a result, feel more loyal to the business – which in turn contributes to the success of MEC.

NB Includes some French translations


Members 2.3 million

Turnover $CAN 195 million

Assets $CAN 25 million

Environmental contributions .5% (approx $975,000) of gross sales to be increased to 1% by 2007


In 1941 a 26 year old priest, Father Jose Maria Arizmediarrieta, arrived in Mondragon to work with young people on sporting, cultural and educational activities. Friendships developed and, over many years, a desire grew to do something more practical in this isolated and poor area of Spain. In 1956 a co-operative was set up making stoves and heaters. The priest was to become a driving force behind other co-operatives, bringing people together and connecting values with practical action.

By the 21st Century this small cluster of co-operatives had grown into a huge co-operative business network which stretched across the globe. In 2004 turnover was EUR 10 billion and 70,000 people were employed in well over 100 separate

co-operatives. These were divided into finance, distribution and industrial sectors, the latter including co-operatives involved in machine tools, construction and household goods. By 2001 Mondragon has become the seventh largest business group in Spain measured by sales but the third largest in terms of employment, a difference which reflects its social purpose.

There are a number of reasons for the success of Mondragon. The values of the Catholic church were translated into practical action which directly met the needs of people living in the region. Democracy, participation, social and environment concerns have all underpinned Mondragon from the outset which built a sense of ownership among individual members as well as loyalty to the whole Mondragon system. Education has also been a key concern and led to the establishment of a network of schools, colleges and even a university. These have driven the development of co-operatives by training their workers and leaders.

These factors have helped Mondragon to adapt to a very competitive market place. By working together individual co-operatives have created a range of support and leadership initiatives. Research and design has fuelled the development of new products and ideas for business development. A range of banking and financial services have enabled businesses to have adequate finance. On occasions loans have been deferred or cancelled in the interests of building a long term sustainable business. Whilst ten percent of business profits go into a social fund, 90% are distributed to members but stay in the business; members may not withdraw their capital until they leave or retire although cheap loans are available. Mondragon developed its own systems of social security  and health insurance after their government made them ineligible for state benefits because it claimed the members were owners of businesses rather than workers. However, in the long term this served to reinforce the sense of independence and autonomy found throughout the network of businesses.

Mondragon has also continually evolved its business and democratic structures according to changing circumstances. The challenge for the future will be to retain and develop its distinct co-operative identity within a global capitalism.

2004   Members 56,000; Turnover EUR 10 billion; Staff 70,000.

Trentino co-operatives

The Trento province in the north of Italy is home to a rich and diverse group of co-operatives. 206,000 people are members of co-operatives out of a total population of 440,000 representing two thirds of families. The region’s 223 towns and villages are home to over 1,000 co-operatives.

At the turn of the twentieth century poverty was widespread in Italy and many families and communities were split up as people emigrated to the United States and elsewhere. An influential priest, Don Lorenzo Guetti, helped to set up the first Famiglia Co-operativa (Family Co-operative) in 1890, a shop that aimed to serve the needs of local people rather than simply profit from them. This set off a chain reaction and, in 1892, the first co-operative bank, Cassa Rurale was established, These banks helped to bring about agricultural improvements by offering low interest loans without demanding high levels of collateral. Agricultural co-operatives soon followed which allowed farmers to store produce, share production costs and cut out the middleman. Later building co-operatives formed as did worker co-operatives and social co-operatives which helped the disabled and those in need. More recently a range of new co-operatives have been developed in areas such as surveying, planning, cleaning, catering, forestry, marketing and ecology.

Today there are 69 banks with 341 branches which account for 60% of the total credit of the area. A central wholesaler and buyer supplies the local co-op shops which also sell 8% of all local agricultural produce including wine and cheese. Many of these co-operatives have also federated to form the Federazione Trentino Delle Co-operative which supports member societies with assistance, consultancy, representation and auditing services.

Co-operatives are run democratically and participation is encouraged in a number of ways. The board of directors is elected by members who are also represented by a board of auditors which checks on the directors and reports back to members. The board of ‘probiviri’ deals with complaints and resolves conflicts.

Members 206,000

(check for English version – ‘ING’ in top right hand corner)

Arctic Co-operatives

For thousands of years the aboriginal people of the Northwest Territories and Nunavut in Canada were nomadic. Over the last 50 years the Inuit, Dene and Metis people started to settle around new education and health services. However, these communities were clear that they did not want outsiders setting up businesses for them. They wanted to make sure that any profits would benefit their communities and that local people were given employment. Co-operatives were a natural choice and blended well with their ‘sharing culture’.

Initial co-operatives were based on traditional activities such as fishing, arts and crafts and fur harvesting. Later they set up shops and then hotels which created employment and established some control over tourism. Co-operatives also became involved in post-offices, freight hauling, airline agencies, coffee shops, estate agents and, more recently, cable television.

These businesses were often isolated and needed technical and moral support so they set up co-operative federations to provide these services. These helped to develop business strategies for marketing and increased their buying power. A number of these Federations came together to form Arctic Co-operatives in 1981. A development fund helps provide finance for individual co-operatives that otherwise would have found it hard to develop their businesses.

Arctic Co-operatives is a real expression of the communities it serves. Its basic vision is of people working together to improve their social and economic well-being. This is done democratically with all members having a vote and influence over their organisation – they are trained and supported to ensure that everyone plays their full role in the co-operative. This in turn enables them to give full recognition and support to the unique cultures and customs of Canada’s north.

Over 16,000 individual members of 43 co-operatives split into 7 districts


Members 16,000

Employees 800

Turnover $CAN 127 million

Co-operative Housing Federation of British Colombia (CHF BC)

CHF is a co-operative with a membership made up mainly of individual housing co-operatives. Canadians have been setting up and living in housing co-ops since the 1930s. Many of these are diverse communities that take responsibility for the upkeep and running of their own homes and communities. People who live in housing co-ops become members. They are shareholders in the co-op, pay rent and participate in the running of the co-op. Because they are organized democratically, members have a direct influence over their housing; leaders and managers are in direct contact with the people they serve.

CHFBC represents a large number of housing co-operatives and it is able to provide a number of valuable services and discounts on things like the provision of domestic appliances, coin operated laundries, flooring, carpet cleaning, recycling and waste management, the installation of hot water tanks and boilers, and membership of the Vancity Credit Union. The Co-operative Housing Investment Pool joins together many small bank accounts that enables CHFBC to offer favourable interest rates; currently they have $23 million invested and offer a range of financial management services.

Education and training is a key principle for co-operatives and CHFBC offers education away days, training in a range of issues such as the responsibilities of members and the board of directors, finance, conflict resolution, and encouraging diversity within co-ops. A magazine, Scoop, is distributed to 11,000 members. Resources for members such as standard policies are available online along with a bulletin board which enables members to discuss common problems and issues. In addition, it offers specialist legal services to members. CHFBC has recently supported women leaving abusive relationships. One member co-op, the Mitraniketan Housing Co-op recently set up a society to provide homes for refugees and those in severe need.

CHF is an outward looking federation which helps to inform the public about the role of co-operative housing. It lobbies politicians on behalf of its members to ensure that the voice of co-operative housing is heard within government, especially among those who would like to pass legislation which replaces the authority of democratically elected housing committees with the power of the government. It gains income from membership fees, services, contracts and grants for special projects and some government revenue.


Member co-operatives 224 representing over 11,000 homes

The North American Students of Cooperation

NASCO is an association of campus cooperatives in Canada and the U.S., providing student cooperatives with support, encouraging the development of new student cooperatives, and serving as an advocate for student cooperatives. NASCO teaches leadership skills, provides information, and serves as the central link ‘facilitating the fruition of the Rochdale vision in the student sector’. By strengthening the student co-op movement, it aims to strengthen the future of cooperatives generally.

During the 1960s radical students engaged in protests and boycotts; they also set up alternative organisations in order to help bring about change. Accordingly, in the spring of 1968, student activists came together in Chicago to form an association ‘for the purpose of expanding the cooperative movement across college campuses’. Information and communication has been of central importance and its journals and newsletters such as ‘Co-op Voices’ have kept groups informed and interested in one another. A shared understanding and enthusiasm was also stimulated by conferences which have developed into an annual Co-operative Education and Training Institute where training, meeting and socialising all take place.

The Campus Cooperative Development Corporation (CCDC) supports student groups interested in starting or expanding cooperatives. Services include development activities and finance support. For instance, since the 1980s housing initiatives have been started in Chicago, Athens, Ohio and Davis, California. The Cooperative Internship Network places student co-operators in jobs with cooperative organizations such as a credit union in Appalachia, the National Cooperative Business Association and the member services department of an optical cooperative in Detroit.

NASCO is a democratic organisation which elects a 13 person board of directors as well as an Active Member Caucus on which all active member co-ops are represented.

Examples of student co-operatives include Co-operative Roots in Berkeley, California, which builds sustainable, affordable housing, supports people to create democratic cooperatives and strengthens local communities through shared resources and education. At StanfordUniversity in California students have the option of living in co-educational residences where house members co-operate in running their accommodation, organizing housework, food purchasing and cooking as well as house work. The Queer Graduate Co-op (a.k.a. ‘Queergrads’) in New York is the first university wide student organization for gay  and lesbian graduate students. It provides educational events and social activities of interest to the vast population of lesbian, bisexual, gay, and transgender people at Columbia’s sixteen graduate schools, affiliated colleges, and seminaries. It also offers housing services and a study group.

FC Barcalona

FC Barcalona was established by a German in 1899 after he advertised for players in the local paper. Originally the administrative and management duties were carried out by the players themselves. Englishman Gualteri Wild became the first President, combining his executive duties with his playing skills. By 1922 the team was located at the Les Corts ground, which soon became known as ‘the cathedral of football’ with a capacity of 30,000 and over 12,000 members. The famous Nou Camp was opened in 1957 with a capacity of 90,000 and a membership of 40,000.

FC Barcalona has served as a focus for regional Catalan identity, especially during the civil war and fascist periods – fascists even bombed the social club and murdered a president. During the period of fascist dictatorship when public meetings were banned, FC Barcalona took on an even greater social importance and became known as ‘more than a club’. In recent years a foundation has been established to organize social, cultural and charitable initiatives.

Barca has 130,000 club members and more than 1600 fan clubs around the world. Members have a democratic role to play in the club. They elect the president every four years and each president can only serve for a maximum of eight years. Members can also serve on the board. They vote for a Members’ Representative Assembly which represents members at meetings to agree the annual report, future plans and budgets. A number of member services offices and information points can also be found in the ground. The club also has 1600 supporters’ clubs in Spain, Europe and the world which together elect a consultative council. There is also a members’ ombudsman who looks into complaints and checks that members are treated fairly.

Other sections of the club include basketball, handball, roller hockey, athletics, field hockey, ice hockey, figure skating, rugby, baseball, volleyball, cycling, and women’s football have all achieved success both at domestic and international level. In 2004, these sections of the club have won 829 titles between them. It also has a number of non-professional sections.


In the Netherlands Rabobank has 1.5 members, nine million customers and is a market leader in virtually all of its services which include banking, insurance, pensions, asset management and investment, leasing, estate agency and mortgages. Internationally it has 244 offices in 37 countries and aims to become a ‘financial department store’ offering a wide range of products tailored to customer’s needs. Towards this end it has acquired specialized businesses to help them provide these services. It has one of the highest credit ratings of any bank in the world.

Rabobank was formed in 1972 by a number of co-operative agricultural banks that had been established in the 19th century. These banks were located within communities and knew their customers personally which meant that farmers rarely defaulted on loans. The banks met a crucial need among small farmers for banking services. Originally the banks were co-operatives of borrowers in which membership was compulsory and meant they were liable for the debts of the bank if things went wrong. Since then things have changed and many customers are not members and they are no longer liable.

Over the last 35 years the smaller banks have merged in order to keep abreast of developments such as the introduction of information technology which has decreased the need to visit a bank so regularly especially with the introduction of telephone and internet banking.  Some found themselves competing with each other and also merged. The underlying aim is that local banks should be, ‘as large as necessary, as small as possible’. In fact, Rabobank has a very dense branch network of more than 250 banks. The local Rabobanks still retain their independence with their own management and administration; members still elect the board of directors. Given that these directors are not paid, management costs have been low. However, the central bank is run by an Executive Board of banking professionals although local banks exert a strong influence through an elected Central Delegates Assembly and a supervisory board. Although there are tensions between the national and local banks, the relationship is generally positive and creative.

Although membership is now voluntary, local banks have recently been encouraging more members to join as well as fostering more active involvement by existing members. For instance, membership attracts specific products and favourable rates of interest. As a result, between 1999 and 2005 the number of members almost tripled and many local banks reported a 25-50% increase in attendance at members meetings.

Rabobank plays an active role in corporate social responsibility offering a range of financial products based on green and ethical principles. It supports environmental issues and projects in developing countries, working with organisations such as Amnesty International and the World Wildlife Fund. Local Rabobanks also support more than 1,000 projects across the Netherlands.

9 million clients; 1.46 million members; 264 member banks;

85-90% of agricultural sector banking in Netherlands

Market leader in banking for small and medium sized enterprises as well as private banking including savings and mortgages.

 2004 Assets 475 billion (475,089million) euro; 56,324 employees


For many Muslims insurance is a problem because it contradicts their religion. Insurance is seen to contain elements of uncertainty (gharar), gambling (maisir) and usury (riba) or lending money at unreasonable rates of interest. Takaful insurance is accepted as overcoming these obstacles. It is an Arabic word meaning “guaranteeing each other” or joint guarantee.

The Takaful concept is very similar to cooperative and mutual principles and the cooperative and mutual model is accepted under Islamic Law“. The principles of Takaful insurance emphasise co-operation for the common good, helping those who need assistance, spreading losses and liabilities and eliminating uncertainty in terms of subscriptions and compensation.

A variety of schemes meet these criteria and some of them are clearly co-operative in nature. In some organizations policyholders share all profits whilst in others the Takaful operator may take a fee or also share in the profits. Many are also charitable in nature or support less fortunate members of their communities. ‘Mircotakaful’ schemes resemble microfinance initiatives. However, there are a number of obstacles to providing insurance to countries with large Muslim populations, especially to the poorer countries. There is a lack of trained and qualified insurance personnel or knowledge of Takaful. Governments also have few models to follow in establishing regulations. Takaful operators still tend to be small and there is a danger that they will not be able to manage a potentially explosive demand.

By contrast there is certainly a need for such services. In 2000 USA, Japan and UK covered 64% of the total world insurance market but accounted for only 8% of the world’s population. Many poorer countries have very little insurance provision at all. The first Takaful company was set up in 1979 in the Sudan and in the last few years the industry has experienced rapid growth in countries such as Malaysia. Increasing awareness, globalization, and the spread of Islam across the world may lead to Takaful having a significant part of the world insurance market in the next decade. Growth rates of 15% a year have been predicted, reaching $6.7 billion in premiums by 2010.

The Agricultural Mutual Fund of Lebanon, set up in 1997, provides health insurance costs not covered by a government scheme. It targets the poor and covers 5,000 families, providing for 23,000 beneficiaries. Takaful Trinidad &Tobago was founded in 1999 by the Muslim Credit Union Cooperative Society (membership of 7,000) and provides a funeral benefit scheme and an Islamic investment fund. Members pay an annual membership fee of $20 ($5 for those under 16) and elect the board of management at the annual general meeting. Co-operative organisations have founded and supported these organisations whilst also developing their own services and products to meet the Takaful criteria. For instance, the International Co-operative and Mutual Insurance Federation (ICMIF) has supported such businesses with information, training and product development.

Touchstone Energy Co-operatives

Touchstone Energy is an alliance of more than 600 co-operatives in 45 US states that, taken together, deliver energy and power to more than 22 million customers every day. Touchstone acts as a branding mechanism that communicates the distinct characteristics of its co-operatives to a rapidly changing market. While each co-operative is embedded in particular local communities, Touchstone offers a national network which brings many added benefits to customers. It has run national TV and media adverts and offers management and financial services. Its conferences and networking opportunities allow members to develop new skills and ideas as well as promote its own work. Educational projects have produced material about electricity for schools. Some member co-operatives such as the Owen Electric Co-operative in Kentucky fund scholarships towards the cost of members’ children attending university.

Each energy co-operative that participates in Touchstone is owned and controlled by its members – the electricity users. They elect a board of directors who have to answer back for their actions. Co-operatives such as the Golden Valley Electric Association in Alaska also organize ‘member advisory committees’ which act as a liaison between members and the board and create another space in which to raise and discuss key issues. Profits are reinvested in the business and returned to members.

Originally many of the co-operatives were set up to bring electricity to rural areas. For instance, the Blue Ridge Electric Membership Corporation in North Carolina was formed in the mid 1930s during a time of extreme depression. Supported by government initiatives, local people petitioned those in power, educated residents and organized themselves into co-operatives. Many members lent a hand with digging ditches and putting up the poles needed to bring electricity to their areas. These co-operatives rooted themselves in their communities and have been able to develop considerable customer loyalty ever since.

Many co-operatives play an active role in community and environmental projects. As energy resources become scare and global warming increases this is becoming more urgent. Blue Ridge has formed a partnership which is developing renewable forms of energy. Members are encouraged to donate at least $4 a month in order that ‘greener’ forms of energy can be developed. In Minnesota members became involved in planting trees and improving state parks.

Co-operatives 600

Customers 22 million

Group Health

Group Health is a health care co-operative based in Seattle. It serves more than 590,000 members in the states of Washington and Idaho. In areas where Group Health doesn’t own facilities and for plans offering more choice, a network of more than 6,000 community clinicians and hospitals meets member health care needs. Group Health accounts for Microsoft, Lockheed Martin, Boeing and Wells Fargo & Co. It has also set up a number of subsidiary businesses to carry out research and development.

Group Health Cooperative was opened in 1947 by a community coalition dedicated to making quality health care available and affordable. Back then consumer-governed, prepaid group medical coverage was a radical idea. When Group Health Cooperative began, there was a major gap in health care that left most middle-class people without coverage. Union members, farmers, and people from other cooperatives built on a vision of a progressive, prepaid medical care system. As a first step Group Health purchased an existing medical clinic that had its own small hospital.

Today it is one of the few health care organizations in the USA governed by consumers rather than internal executives. Its board of trustees is made up of members elected by other members and works closely with management and medical staff to focus on the needs of patients. Group Health has built up a tradition of member governance and participation. Governance Services supports members and volunteers who serve on committees, advisory councils, task forces, and special interest groups, including the Senior Caucus, an advisory group that addresses issues affecting older adults. Members are responsible for electing the Group Health Board of Trustees, the governing body that hires the CEO and votes on all major policy decisions. Voting members also vote on changes to Group Health’s bylaws. Public board meetings begin with an open microphone session during which any Group Health member can address the board directly on all matters except those related to personal health care.


Turnover $2.11 billion

Employees 10,000

2 hospitals; 25 medical centers; 6 care units

39 contracted hospital providers


SaludCoop provides health insurance and health services to four and a half million people in Columbia. It has a network of 24 clinics and offers both specialist and general medical services in addition to research, prevention and health promotion. SaludCoop also runs pharmacies and through its subsidiaries it makes uniforms and provides food services to all SaludCoop facilities as well as the general public. It is strongly committed to a co-operative vision and aims to communicate its distinct co-operative character through all its services and products. This allows SaludCoop to differentiate itself from its competitors. It has recently developed a range of online services.

SaludCoop was established in 1994 by the co-operative insurer La Equidad which was itself established in the 1970s by co-operative societies that wanted to develop and insurance business. After consulting with members it was found that health was becoming a major concern following government reforms. Although the business was established with inadequate funds it has flourished in subsequent years and now has a significant presence across Columbia. The success of SaludCoop has led to plan similar co-operative businesses in Ecuador, Mexico, Venuzuala and El Salvador.

Suma Wholefoods

Suma Wholefoods is an independent wholesaler and distributor of fair trade, organic and vegetarian foods as well as environmentally sound products. Operating across the UK, Suma supplies and distributes over 7,000 product lines to a range of independent shops, supermarkets, community groups, hospitals and schools. The business is governed by rigorous ethical, social and environmental standards.

Suma was started by one man in 1974 who set up an informal food distribution business from his front room in Leeds. Before then, supplies of wholefoods were only available in London. Demand was so high that Suma grew rapidly into a seven employee business. These people became the founder members of the co-operative in 1977. Common ownership means that the members cannot wind it up and distribute the assets among themselves. This has protected the co-operative and ensured its independence.

In the early years, Suma was a lifestyle concept, rather than just a business with worker members also sharing the same housing – Suma was an alternative way of life. As the business grew it managed to adapt its ways of working and decision-making processes whilst remaining democratic. There is no chief executive or ‘boss’ but management work is divided into different role which members may fill for an agreed period of time. If necessary members are trained to do these things. The members elect a management committee of six with at least two spaces reserved for women. Non-voting members include the finance, personnel and operations co-ordinators. The committee meet weekly whilst the general meeting of all members meets six times a year to agree major strategies and policy decisions. Other meetings take place daily to discuss particular parts of the operation. Wide consultation and high levels of participation help to ensure the right decisions are made and members are encouraged to show ‘initiative within collective responsibility.’

Membership and participation are actively encouraged with incentives like pension contributions. All staff are paid the same wage and have the option to learn new skills and jobs. Each management committee meeting begins with an open forum, open to all members to raise issues or concerns with the committee. New members must first pass through a probationary period.


Members 64 with 12 training to become members

Employees 85 full time equivalents

Turnover £20 million

’Suma is, at heart, a political statement that workers can successfully manage their own businesses without an owner/manager elite’, Suma website.

Multiskilling is the new buzzword in management theory, SUMA has been doing it for 25 years’, Suma website.

Capricorn Co-operative

In Australia running service stations that provide fuel and spare parts for drivers is a tough competitive business dominated by the multi-national oil companies. In the 1970s these companies had bought up most of the service stations and were leasing them back to managers who had little control over many of the products they stocked, how much they paid for fuel and how much they sold it for – according to Capricorn’s official history they were getting ‘screwed’ by the oil companies.

One small player, Golden Fleece, owed a small number of service stations, many of them located in the isolated and dispersed area of Western Australia around Perth. Twelve of the managers who ran these stations met at a business training course where they discussed, among other things, how they could make more money. Over a week in which they worked and drank cold beer in the evening, friendships and camaraderie developed which led them to set up a social club.

At one get together, they started bragging about who could buy a sparkplug the cheapest! They soon realized that, by working together, they could get much better deals for everyone. They started by spreading the load – one person bought all the sparkplugs, one bought all the tyres and so on. This worked well and as more service stations joined they got even bigger discounts. Within four years they had formed the Capricorn Co-operative which helped to convince suppliers that they were a legitimate business that could be trusted. The initial group of members put $5,000 each towards this – a lot of money then. It would not be until 1982 that members saw their first dividend.

The co-operative structure was to prove durable and robust in a rapidly changing environment that was to see petrol prices quadruple since the 1970s. Since then Capricorn has responded to numerous recessions by cultivating the loyalty of members who have sustained the co-op through hard times. Financial services, support with new technology, reward and incentive schemes have all helped to generate this support. Members also elect a board of directors who are fully trained and feed further ideas back into their co-operative. This has helped Capricorn to develop new services such as repairs, a panel and paint division and car rentals. It has also set up a travel agency which has allowed members to continue meeting easily and cheaply. Indeed, annual conventions help to maintain communication and common understanding among members.

To gain the real benefits of membership, a critical mass of members were needed to create real buying power. As a result active recruitment campaigns have been a regular feature of Capricorn’s work. It has also expanded its membership abroad. By 2006 had over 9,000 members located throughout Australia, New Zealand and South Africa and a turnover in excess of $AU 500 million. Capricorn has shown that it was possible to beat the restrictive practices imposed by the oil companies – practices that were later to become illegal.

Global Co-Operative