Cooperatives

[Page 666]A cooperative is an organization that is owned, controlled, and operated for the benefit of its members. Cooperatives can be as informal as a group of individuals working together to accomplish a shared objective or as formal as a legal entity organized to produce, process, or distribute a product or service. Cooperatives are found in many sectors of society but are common in the financial industry (e.g., credit unions), real estate (e.g., homeowner associations and rental cooperatives), agriculture (e.g., farmer cooperatives), and utilities (e.g., electric cooperatives).

Cooperatives function well when their members have shared or similar preferences, interests, and values. Thus, homogeneity of member interests is often a necessary condition for the effective operation of cooperatives. Ethical conflicts arise when the preferences, interests, or values ...