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The following are the reasons of failure or defects and disadvantages of cooperative organization.
1. Lack of capital.
(a).Its members are generally related to the poor group of the society and they are not in a position to invest a large amount.
(b).External financial resources of the society are limited.
(c).It cannot borrow money from non-members.
(d).It cannot issue any kind of debentures.
(e).It share cannot be transferred to nonmembers.
It thus suffers shortage of capital for the operation of business.
2. Limited scale. Due to the various hindrances behind the growth of capital, it is not possible for the cooperative society to start its business at a large scale; it therefore, keeps its business limited in the narrow field of cooperation.
3. Inefficient management. Expert and efficient management is important factor for running the business successfully. But a society cannot afford to hire the services of superior abilities due to its limited resources. Therefore its business cannot be carried on smoothly.
4. Lack of prompt decision. As all the matters are decided by the management committee and complied by another authority, it cannot act with promptness, if a chance comes to make a timely purchase or sale, they have to wait to get others consent.
1. Lack of capital.
(a).Its members are generally related to the poor group of the society and they are not in a position to invest a large amount.
(b).External financial resources of the society are limited.
(c).It cannot borrow money from non-members.
(d).It cannot issue any kind of debentures.
(e).It share cannot be transferred to nonmembers.
It thus suffers shortage of capital for the operation of business.
2. Limited scale. Due to the various hindrances behind the growth of capital, it is not possible for the cooperative society to start its business at a large scale; it therefore, keeps its business limited in the narrow field of cooperation.
3. Inefficient management. Expert and efficient management is important factor for running the business successfully. But a society cannot afford to hire the services of superior abilities due to its limited resources. Therefore its business cannot be carried on smoothly.
4. Lack of prompt decision. As all the matters are decided by the management committee and complied by another authority, it cannot act with promptness, if a chance comes to make a timely purchase or sale, they have to wait to get others consent.
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This is a really useful answer, thank you
=D
=D
Helped me in my project
thankyou
thankyou
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