Governmental & Parastatal Applications of Shared-Services Cooperatives

T12/Stage 3/Meso Shared-services cooperatives provide needed benefits, services and opportunities to a variety of members in rural, suburban and urban communities throughout the US today. As membership associations, they are... [ view full abstract ]

T12/Stage 3/Meso

Shared-services cooperatives provide needed benefits, services and opportunities to a variety of members in rural, suburban and urban communities throughout the US today. As membership associations, they are securing economies and efficiencies of scale through institutional or organization collaborations in areas such as purchasing, marketing, processing, distribution, administrative operations, licensing and permitting. They have operated as for-profit, as not-for-profit business entities, and as combinations of the two. Many have tested new and innovative areas of service in respect to food, health, social, energy, IT, and educational services for members. They have appeared in a broad array of industry and public service sectors and have often improved their members’ performance and competitive positions in markets affected by national and multinational corporations and privatized public services.
A good deal of overlap is cited in regard to the form and function of agriculture, purchasing and shared service cooperatives. Little is said about the distinctive attributes of the shared services model, its potential to respond to its members’ changing needs and the innovative role this model can play for communities its members serve.
The overall objective of this study is to examine the shared service nature of private and public sector cooperatives across the United States. After an extensive literature search we interviewed leaders of 24 cooperatives. Some like Seattle Massage, are relatively small in terms of gross revenue and membership; others like Coop Financial Services or CCA Global, earn hundreds of millions of dollars annually for thousands of members and are international in scope. In areas of government services, some operate within counties while others such as the Metropolitan Water District of Southern California (MWD) supply surface water to 26 cities and water districts. Despite their range and scale, we have determined that there are areas where commonality exists in respect to governance, management, patronage and performance.
The purpose of this paper is to examine how shared services co-operatives are used by the public sector and factors that contribute to their efficacy. Research findings based on interviews with cooperatives active in areas of public resource and public service management will be presented. The cohort treated includes quasi-government entities and associations that form or deploy cooperatives. The paper will conclude with lessons that can be learned from these case studies.