Comparing Business Models
A co-operative is simply another type of business model. For over 140 years, co-operatives have been a tool for individuals and communities to organize for their common benefit. Co-ops are democratic businesses owned by the people they serve, and they provide solutions to 21st century challenges.
CO-OPS DIFFER FROM OTHER BUSINESSES
Co-operative organizations differ from other businesses in three key ways:
A Different Purpose: Co-ops meet the common needs of their members, whereas most investor-owned businesses exist to maximize profit for shareholders.
A Different Control Structure: Co-ops use a system of one-member, one-vote, not one-vote-per-share. This helps them to serve common interests and to ensure that people, not capital, control the organization.
A Different Allocation of Profit: Co-ops and credit unions share profits among their member-owners on the basis of how much they use the organization, not on how many shares they hold.
A co-operative is essentially...
- a union of people.
- an organization of users.
- organized by people to serve people.
- controlled by its members.
- an organization in which surplus earnings belong to the user-members and are used to make the co-op stronger or returned to members as dividends.
- community-owned and controlled because of its ownership structure and control mechanisms.
- less vulnerable to non-member and foreign interest.
A private investor-owned business is essentially...
- a union of capital.
- an organization of investors.
- organized by entrepreneurs to attract capital and serve customers.
- controlled by those with a majority of shares.
- an organization in which profit belongs to the corporation, and is primarily used to provide a return to shareholders.
- vulnerable to takeover by outside, foreign and multinational interests.
In the related documents at the top right of this page are charts comparing the co-operative model with other business models. Download these charts for more information on how co-operatives differ from other businesses.