Aichi Prefectural Federation of  Small Business Associations


Aichi Prefectural Federation of Small Business Associations

Why so small enterprises need a cooperative?

Since small enterprises are generally small in business scale, weak in fund raising and information collecting, and inferior in skills, they are often at a disadvantage in managing a business.

Small enterprises are significantly affected by today's developing information-oriented society, globalization, diverse and advanced needs from consumers, deregulation, and reduction in working hours. With the need to reexamine business activities and change corporate direction to cope with those trends, small enterprises are now confronted with much severer circumstances. To grow further beyond such harsh conditions, it is important for them to help themselves, but their individual abilities are limited. For this reason it is most effective for small enterprises in similar situations to organize a cooperative where they share skills and knowledge to help each other to improve and strengthen business management. There are various systems of cooperatives in order to encourage small enterprises in the same trade to organize a cooperative, modernize and rationalize their business management, and improve their economic status.

In establishing a cooperative, it is important to choose the type of cooperatives according to what is the intended activity. A cooperative mainly results in the following three benefits:

  1. It is able to modernize and rationalize business management through improvement in transaction conditions; sales promotion; smooth fund raising; improvement in managerial know-how about information, technology, human resources, marketing and so forth; and improvement in productivity.
  2. It is able to maintain established and orderly trade rules, keep stable management of member enterprises and develop the whole industry.
  3. It is able to collect opinions and requests from small enterprises so that they are taken into consideration in making national policies available for many small enterprises.