Disadvantage of Cooperative Society

The following are the reasons of failure or defects of cooperative society . Disadvantage of Cooperative Society

1.Lack of Capital:

(Generally, all the members of cooperative society are the low income group of the country, and have limited resources, so they cannot contribute a big amount of capital. Owing to this, there is always the shortage of capital and society cannot grow its business

2. Delay in Decision:

(In the cooperative business all the main decisions are made by the consent of all the members of the society, so there is generally delay in making important decisions of the business and some times, the society has to suffer loss due to delay in decisions

3. Poor Management:

(Generally, it is seen that co-operative societies do not function efficiently due to lack of managerial talent. The members or their elected Representatives are not experienced enough to manage the society. Again, because of limited capital they are not able to get the benefits of professional management)

4. Lack of Co-operation:

(The selfish attitude of members may sometimes bring an end to the society

5. Lack of Motivation:

This does not provide enough motivation to the members to put in their best effort and manage the society efficiently.)

6. No Use of Modern Techniques:

As the resources of the cooperative society are limited, it cannot use the modern mechanized techniques of production, which are necessary for the quick progress of the business

7. Lack of Secrecy:

Nowadays, there is still competition in the field of business so secrecy is compulsory for the growth of business. But in cooperative business all the members of the society take active part in the management decisions of the business, so the business secrecy is impossible and due to this, business may suffer loss.)

8.Legal Restrictions:

(The cooperative society had to follow legal restrictions imposed time to time by the registrar of the cooperative societies, which become hurdle in the progress of the society

9. Uneducated Members:

(The members of the society are generally illiterate They cannot conduct the

business of the society economically and efficiently and thus cooperative society

suffers loss

10. Lack of Research and Development:

(It is sometime difficult for the society to introduce new technique of production and to find various uses of the product due to its limited resources. The goods are produced in old designs which are not liked by the members and so its profit is affected.)

Conclusion:

We conclude that cooperative societies are the need of developing countries and (the main aim of cooperative societies is to improve the Dfa ho economic conditions of low-income groups. Cooperative societies can be operated successfully under an effective control. Sincerity and honesty are the basis of its success.