Disadvantages of Cooperative Society

Disadvantages of Cooperative Society

Disadvantages of Cooperative Society

Cooperative society was originated from the word of co-operating which indicates assistance. Society means association or collection of a group of people. So, it means assistance of the society where a few people create a democratic institution voluntarily.

Actually, Cooperative society is a genuine business organization, it is just a movement. Though are having immense advantages, it has some disadvantages as well which are as follows:

The complexity of formation: The formation process of cooperative society is comparatively complex. All kinds of required procedure must have completed under running Cooperative Society Act. Collection of members, formation the committee, collection the registration certificate these activities are lengthy as well as hazard also.

Problems of transferring share: The share of this society is not transferable easily. Permission must be needed for changing the ownership is difficult from one person to others. As a result, anyone can’t go anytime from the business.

Lack of capital: It is highly difficult to provide huge capital to the business because cooperative society is the organization of low-income earner people of the society. Though it has great potentiality but can’t forward as well.

Lack of inspiration: Lack of inspiration has “a great negative impact on organization though primarily it is built along with strong inspiration. Besides, officers can’t get a minimum salary which leads to frustrated.

 The uncertainty of profit: Profit making is not the ultimate goal of cooperative business. Besides, the whole amount of money can’t be distributed which leads the uncertainty of profit. So people don’t inspire to invest in the cooperative society.

Inefficient management: It is the organization of illiterate or less educated people of the society. There are lacks of knowledge, efficiency, as well as experience as they conduct their business themselves. That’s why prosperity must hamper.

Lack of cooperation: It is based on cooperation. But it is noted that it does not exist long-term period. Misunderstanding creates due to various causes and its main barrier to a way of properly managing the organization.

Lack of honesty: The success of a cooperative society depends on the honesty of members of the business. So many directors show lack of honesty, sacrifice, and punctuality as well. It also hampers the organization.

Limited field of operation: It is not possible to establish the cooperative society in every financial and other sector. Operations can’t spread in every sector because of limitation of the organization structure.

Government control: It is always assisted by the govt. but the government has strong control over operative society as well. Sometimes government control may create problems in general activities of the organization.

At last, it can be said that due to above-mentioned disadvantages cooperative society can’t ahead expectedly. If these disadvantages will be reduced then the Cooperative.