Author: John Park, Texas A&M University, jlpark@tamu.edu
Whether the bargaining power of your customers is weak or strong can be evaluated in a similar manner as supplier bargaining power. Even if buyers do not purchase in large quantities or offer a seller important market exposure or prestige, they may still have some degree of bargaining leverage if: (1) the cost of switching to an alternative product is low, (2) they can credibly threaten to integrate backwards into the business of …
Author: John Park, Texas A&M University, jlpark@tamu.edu
Your business depends on certain suppliers that provide labor, materials and other components. Competitive pressure from these suppliers is strong when they can exercise sufficient bargaining power to influence the terms and conditions of exchange in their favor. This pressure is further strengthened when suppliers are concentrated. In agriculture, producers typically are seen as having little bargaining power or leverage due to the number of sellers in the open market. Likewise, cooperatives face …
Authors: John Park, Texas A&M University, jlpark@tamu.edu, and Tommy Engelke, Texas Agricultural Cooperative Council
Cooperative managers implement the cooperative business’ policies set by the board of directors. Managers initiate and adopt short-range plans of the cooperative, while the board of directors sets the long-range goals for the business. Employees report to the managers because the managers are in charge of carrying out everyday operations of the business. In turn, managers coordinate and control daily business activities …
Author: John Park, Texas A&M University, jlpark@tamu.edu
Business enterprises of all types, whether proprietorship, partnership, corporation, or cooperative, require the effective use of its assets in order to secure financial and organizational success. Although managerial skills are applicable across all business types, the management of a cooperative business often differs in complexity due to its foundation of user-ownership and control. In this section, we will discuss the unique attributes of cooperative management. We will cover …
Various writers over the past century have analyzed and observed the application of cooperative principles. Although slight differences in terminology appear on the various lists, three principles emerge as being widely recognized and practiced.
These principles are more than just good practices, policies or common sense. They distinguish a cooperative from other kinds of business. They are also recognized in state and …
Authors: Greg McKee, North Dakota State University, gregory.mckee@ndsu.edu, and Donald Frederick,
Rural Business-Cooperative Service, USDA
Probably the most widely known and proven of collaborative business organizations are cooperatives. They are usually formed of many entities and are legally constituted, limited liability corporations controlled by their members.
Cooperative members are often in the same industry and have common economic interests that may involve joint marketing, purchasing of supplies and/or the providing of services.
Organizational Characteristics of Cooperatives
Authors: Greg McKee, North Dakota State University, gregory.mckee@ndsu.edu, and Donald Frederick,
Rural Business-Cooperative Service, USDA
The individually owned business is the oldest and most common form. One person owns, controls and conducts the business. Characteristics of individually owned businesses include:
Authors: Greg McKee, North Dakota State University, gregory.mckee@ndsu.edu, and Donald Frederick,
Rural Business-Cooperative Service, USDA
Cooperatives may delay the pass-through of the tax obligation from the cooperative to the patron without jeopardizing single tax treatment of those moneys.
Any patronage-based allocation not meeting the requirements of the Code to be “qualified,” has “nonqualified” status. When a nonqualified allocation is made, the cooperative pays corporate income taxes on the funds retained. The patron has no tax obligation on these funds in …
