Questions
- Explain the details that cooperative /partnership should be imbedded as basis gradient to ensure that cooperative partnership lasts for a very long time.
- What factors should we pay attentation to when choosing organization or partnership for purpose of implementing supply chain management approach?
Answers
A cooperative is an autonomous association of people who voluntarily cooperate for their mutual social, economic, and cultural benefit. Cooperatives include non-profit community organizations and businesses that are owned and managed by the people who use their services (a consumer cooperative) or by the people who work there (a worker cooperative) or by the people who live there (a housing cooperative), hybrids such as worker cooperatives that are also consumer cooperatives or credit unions, multi-stakeholder cooperatives such as those that bring together civil society and local actors to deliver community needs, and second and third tier cooperatives whose members are other cooperatives.
In short, a co-op is defined as “a jointly owned enterprise engaging in the production or distribution of goods or the supplying of services, operated by its members for their mutual benefit, typically organized by consumers or farmers
QUESTION ONE
Factors that ensure that cooperative partenership lasts for a very long time
Question 2
Termination. The willingness to develop the cooperation is noted. Even if the cooperation is terminated, a good on-going interpersonal relationship should be established. As mentioned in the setup phase of the cooperation, knowing a partner is the first good step into a successful venture.
Risk Typically, risk is expressed strictly in terms of cost, schedule or technical performance. Risk can also be expressed in terms of missing the expectation of the system or in terms of project objectives. Risk can therefore be defined as an uncertain event which, should it occur, would have an effect on achieving the objectives. Integrated risk management focuses on the achievement of a better risk awareness on all hierarchical levels, the implementation of a structured risk analysis system and on a better risk handling (avoid, mitigate, share and absorb risks).
In cooperation projects, the objective is an integration of the risk dimension in the personal, technical and organizational spheres of the cooperation and in consequence a higher achievement of the strategic goals and an increased chance of success.
Initiation. The communication and the dialog about all business risks have a positive impact on the outcome of the cooperation. Trust is a determinant factor in the risk dialog [24]. The willingness to bear and to share risk supports the initiation phase. An essential basis is therefore the risk awareness [25]. A systematic project risk analysis is also very important. The definition of clear project goals is crucial to be able to analyze the risk. Another way to reduce cooperation risks is to start the new business relationship with smaller, achievable tasks.
Partner selection. Risk awareness eases the way into a partnership. The partner must prove his readiness to share risks. Similar basic premises of security and risk aspects may also help [17].
The technological capabilities, the know-how and the resources should be analyzed from a risk point of view. Is the information about the possible partner reliable? Can a future development change the partner’s strategic goals easily, How stable is the cooperation, ‘‘The stability of risk-reducing coalitions depends on the sources of risk they seek to control.
Coalitions hedging against the risk of a single exogenous event will tend to dissolve, whilst coalitions involving an ongoing risk (e.g. exploration risk for oil) will be more durable’’.
Setup, All parties need to recognize the mutual benefits of cooperation and the advantage of interdependence. An early discussion about the risks is helpful to increase risk awareness and the buildup of trust. A further benefit is the improved communication, the common understanding and team spirit. The earlier the risks are identified the easier is their handling. A joint risk analysis is desirable. The more detailed the information regarding risks is, the lower is the partner’s surcharge due to uncertainty. Furthermore,
Implementation or realization. During the realization, a systematic project risk management is recommended that includes the accomplishment of a risk analysis at each milestone. A formal process or mandatory procedures should be implemented.
Project controlling can help identifying new risks or a changing in the risk structure. The results, the progress, the objectives and the behavior should be controlled.
Termination, A project-to-project knowhow transfer concerning project and cooperation risks and the risk handling can increase the success of future cooperation. Chong points out that one can ‘‘learn about risk and project failure just as much as about project success.
Question 2
One of the most important decisions to make when establishing a new partnership, or when reviewing the state of your current business, is what form of business entity to use. Each form offers advantages and disadvantages, so review the following factors carefully before making your decision.
Tax issues, This is one of the biggest factor for many owners of business to consider when a choosing a partner, Corporations typically are viewed as a poor choice because the corporation pays taxes on the profits and shareholders are again taxed on the dividends paid out. All other business entities generally are taxed only at the personal or shareholder level.
If a cooperative partnership is to last for a very long time then members of the corporative should understand the legal procedures required to establish a strong corporative and also ensure that they obey the terms of the law so that they are able to establish a strong legally abiding business organization some of the laws surrounding a corporative are taxation laws its even of great benefit to understand the differences between corporate and individual tax rates this is in order to make corporations be in position to make good tax laws.
The risk of converting from one organization to the other should be low in order for an organization to be able to benefit from a corporative; most of these risks include risks of losing customers, risks of losing skilled manpower to a partnership, risks of losing independence, human resource risks, however Converting from one type of entity to another also may limit what new structure you choose, because conversions can raise significant tax issues. S corporations have a difficult time converting to a Corporation without tax consequences, but not vice versa.
Liability issues should be considered when entering into a partnership, when an organization is to be in partnership it has to consider the role of the different parties and their level of liability in respect to their interest in the partnership, when one of the organizations is heavily indebted it can affect the performance of the partnership. Insurance can mitigate some of this risk, and the new limited liability company format can help here. However, if personal liability is a concern, you’re probably better off using other structures.
Simplicity issues. Although taxes and liability are commonly the major factors in choosing an entity, there’s something to be said for simplicity. Unless liability is a real concern for a small business, a sole proprietorship or small partnership might make better sense because it’s easy to set up. (Again, having adequate liability insurance is important.) A business with numerous partners can be a real headache when it comes to adding or buying out existing partners-something that’s a lot easier to do in a corporate structure.
Other factors. Beyond these three major factors, you may have additional reasons for choosing a particular structure. For example, S corporations are limited to 75 shareholders (none of whom can be a nonresident alien) and only a single class of stock, while LLCs are not as restricted.
Building a partnership Equity should be a guiding principle in building a partnership, as should (for many partnerships) a “bottom-up” structure. Political will and human and financial resources are also needed.
One essential step in building a partnership is to ensure that everyone involved knows what the partnership is about, who is doing what, and which outcomes are expected. If possible, a partnership should be built on appropriate structures already existing in the area. Establishing and implementing a partnership is basically a dynamic process. The procedure includes several phases: preparation, drawing up a contract (where thought necessary), establishing a work programme, implementing the work programme, and monitoring and evaluation on an ongoing basis.
Preparation
Preparatory work is crucial for developing a steady and effective partnership. Careful research into the context in which the partnership will be operating must be part of this phase. The strengths and weaknesses of the area should be assessed and effective measures designed. One of the most important aspects of this phase is to identify the right partners and establish clear roles for each. (See section on the ‘Roles and functions within partnerships’ below).
Contractual Conclusion , A partnership is often based on a formal commitment that has been established by a number of partners signing a contract. Bound by this contract, the partners will share a strategy and implement heir co-ordinated working programme for a period determined by th partnership.
Establishing Working Programmes , The work programmes should indicate the interests and targets of all partners and include activities and measures that will contribute to the improvement of the territory.
Implementation In this phase partners are in regular contact to co-ordinate implementation, to extend and supplement the working programme with new measures, and in some cases to test new approaches.
Public relations activities should inform the wider public of the targets, activities and measures of the partnership.
Monitoring, To assess a partnership’s achievements, determine improvements to be made and adapt further planning, a comprehensive monitoring system should be used. A partnership should be evaluated periodically and publish reports to demonstrate the added value of its work.
successful partnerships a guide, Partnership members Careful partner selection is essential for the partnership approach to be fruitful, to ena
