Skip to main content
Business LibreTexts

3.4: Participation in Control

  • Page ID
  • \( \newcommand{\vecs}[1]{\overset { \scriptstyle \rightharpoonup} {\mathbf{#1}} } \) \( \newcommand{\vecd}[1]{\overset{-\!-\!\rightharpoonup}{\vphantom{a}\smash {#1}}} \)\(\newcommand{\id}{\mathrm{id}}\) \( \newcommand{\Span}{\mathrm{span}}\) \( \newcommand{\kernel}{\mathrm{null}\,}\) \( \newcommand{\range}{\mathrm{range}\,}\) \( \newcommand{\RealPart}{\mathrm{Re}}\) \( \newcommand{\ImaginaryPart}{\mathrm{Im}}\) \( \newcommand{\Argument}{\mathrm{Arg}}\) \( \newcommand{\norm}[1]{\| #1 \|}\) \( \newcommand{\inner}[2]{\langle #1, #2 \rangle}\) \( \newcommand{\Span}{\mathrm{span}}\) \(\newcommand{\id}{\mathrm{id}}\) \( \newcommand{\Span}{\mathrm{span}}\) \( \newcommand{\kernel}{\mathrm{null}\,}\) \( \newcommand{\range}{\mathrm{range}\,}\) \( \newcommand{\RealPart}{\mathrm{Re}}\) \( \newcommand{\ImaginaryPart}{\mathrm{Im}}\) \( \newcommand{\Argument}{\mathrm{Arg}}\) \( \newcommand{\norm}[1]{\| #1 \|}\) \( \newcommand{\inner}[2]{\langle #1, #2 \rangle}\) \( \newcommand{\Span}{\mathrm{span}}\)\(\newcommand{\AA}{\unicode[.8,0]{x212B}}\)

    Customers participate in control by setting policies, including the governance structure of the cooperative. These policies are embedded in the bylaws of the organization, which include 1) classes of membership and their qualifications, 2) the governance system, including the role and responsibilities of the board of directors and how they are elected, and 3) rules for certain

    A number of dairy cooperatives manufacture cheese, butter and powdered milk. All sugar beets are processed through sugar beet cooperatives such as American Crystal Sugar. Nor-Pac processes vegetables into canned and frozen packages. Minnesota Soybean Processors crushes soybeans into co-products such as oil and meal and manufactures soy-diesel.


    actions such as annual meetings, bylaw amendments, or dissolution. Members who are eligible to vote are called voting members. Membership in a cooperative implies that a customer has applied and been accepted by the board of directors as a member of the cooperative. Different cooperatives have different rules on membership but, in general,

    Ace Hardware and True Value Hardware are WHOLESALING COOPERATIVES which are independently-owned hardware stores. They are able to negotiate better prices, purchase much larger volumes of hardware and related products, and distribute them to their members, who could not obtain these savings on their own. A number of fast-food restaurant franchise owners have formed purchasing cooperatives, including United Foodservice Purchasing Cooperative, which is owned by Yum! Brands franchise operators, and Independent Purchasing Co-operative, which is owned by Subway franchisees. Independent grocers have formed purchasing cooperatives such as Associated Wholesale Grocers and Wakefern Foods.


    cooperatives tend to have a low threshold on membership qualifications. In many cases, cooperatives use a one member, one vote principle, which is often called democratic control. Control is typically evidenced by the ownership of a share of common stock in the case of a stock cooperative, or by a certificate of membership in the case of membership or non-stock cooperatives. Cooperatives thus use a voting process to select directors for the board or make changes in their articles or bylaws; this differs from a non-cooperative corporation, which is based on investment ownership (as described in Chapter One).

    This page titled 3.4: Participation in Control is shared under a CC BY-NC license and was authored, remixed, and/or curated by Michael Boland (University of Minnesota Libraries ) .

    • Was this article helpful?