Category: Cooperatives

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Taking Minutes during the Meeting

Authors: Phil Kenkel, Oklahoma State University, phil.kenkel@okstate.edu, and Bill Fitzwater,
Oklahoma State University

If ever there was a gap between a job’s glamour and its importance, such is the case for a board secretary. It is of utmost importance to have the right person taking the minutes. Usually cooperative boards appoint a board secretary who records minutes during the meeting, transfers the minutes into a professional, readable format and submits the minutes to the board for approval at the next …

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General Causes of Business Failure

Authors: Brian Henehan, Cornell University, bmh5@cornell.edu, and Bruce Anderson, Cornell University

Reviewers: Gerald White and Brent Gloy, Cornell University

First, we will take a look at some of the causes of business failure in a specific industry sector–agriculture, forestry and fishing. The Economic Analysis Department of the Dun and Bradstreet Corporation collects and analyzes data on business failures. Table 3 categorizes the common causes of business failure including: economic factors, finance, experience, neglect, disaster, fraud and strategy.

Table 3. Causes …

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Occupancy Agreement (or Proprietary Lease)

The contract between the cooperative corporation and the member that sets the conditions for the right to occupy a particular unit. It sets forth the rights and obligations of the member and the cooperative to each other. Legally, it is viewed as a lease by the member with the housing cooperative.…

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Purchase-Sale Agreement

A legal agreement that states the terms of the sale of property. Purchase-sale agreements usually include such things as the price of the property, how and when the money will be paid for the building, and any special conditions of the sale.…

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Bargaining power of suppliers

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 …

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Internal Revenue Code Section 216

The section of the U.S. federal tax law that permits individual cooperative members to deduct mortgage interest and property tax on their income tax returns just like other homeowners do. Section 216 allows cooperative housing corporations to pass-through the mortgage interest and real property tax deductions to their stockholders on a pro rata basis.…

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Bargaining power of buyers

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 …

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Allocated Equity (for cooperatives)

Equity that is assigned by amounts to individuals or organizations, typically in the form of retained patronage refunds and/or per-unit capital retains; investments by patrons for which they have received notification of the allocation. The share of net margin (savings) from member businesses that has been allocated to individual member-patrons based on their patronage but retained by the cooperative for operating purposes. There is an obligation to redeem this equity to members or past members at some point in the …

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Cooperative Management and Marketing

 

J. Park.

Author: John Park, Texas A&M University, jlpark@tamu.edu

Cooperative Management

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 …

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