Question

Write short note on the following.
Demerits of Co-operative society

Answer 1

Demerits of a co-operative society:
i. Excessive government control: A co-operative society has to follow certain rules and regulations framed by the cooperative department of the concerned state government.
ii. Limited capital: The financial resources that a co-operative society can raise from the public are limited, as the rate of dividend on capital is low and the principle of “one member, one vote” is followed.
iii. Lack of secrecy: Secrecy of information in a co-operative society cannot be maintained, as it discloses information about its operations to its members.
iv. Lack of motivation: Members of a co-operative society do not feel motivated to do their best, as there is no incentive for hard work.
v. Conflicts: Members of a co-operative society may lack maturity and experience to deal with business problems. This may lead to conflicts among the members.
vi. Inefficiency in management: The management of a co-operative society generally comprises part-time or inexperienced people. They may not be skilled enough to handle managerial functions effectively.