Disadvantages of Primary Industrial Cooperative Society
The collection of people who are engaged with small and cottage industry a cooperative society is established for them is called primary industry cooperative society. To get prosper mutual improvement in the industrial sectors is formed the primary industrial cooperative society.
Primary industrial cooperative society has various advantages, some disadvantages also have in the cooperative society which is as follows:
Inadequate capital: This business can’t be expanded because of the shortage of capital. For this reason, investment is not possible immediately because of the financial limitation of the members.
Inefficient management: Generally the cooperative societies are established and operated by the literate, unable, and inexperienced people. That’s why it is not possible to manage the cooperative society inefficiently.
Lack of motivation: Profit maximization is not the main goal of this organization. Even all portion of the dividend is not distributed among the members. They perform managerial activities without salary as well. That’s why it creates a long gap between contributor and reception which generates lack of motivation.
Lack of competitive capability: Lack of capital, organizational weakness, limitation of activities, inefficient management, for these limitations this organization can’t compete with a large-scale business institution.
Legal complexities and government control: This Cooperative society is operated and controlled by ordinance of the cooperative society. Sometimes, its activities would hamper due to legal complexities and government control.
The ratio of disadvantages is not more than advantages. That’s why it much popular cooperative society as well as it has great roles in the economy.