A New Cooperative Paradigm

A New Cooperative Paradigm

Part 1

  1. Discussing the foundation of the concept of loyalty, and its relevancy in today’s market economy.

The foundation of the concept of loyalty was based on the studies that found out that American firms were losing clients, employees, and shareholders due to lack of loyalty. Loyalty implies being committed to a firm or a business due to the satisfaction achieved from such a relationship. Ideally, is developed after the main stakeholders in a firm are satisfied with the services or products being offered.

Loyalty is quite relevant in today’s market economy because it leads to increased profitability to due customer satisfaction. In addition, the loyalty of employees also ensures low labor turnover and hence they work longer in an organization. With customer loyalty, businesses are likely to thrive because satisfied customers recommend a business to their colleagues and hence increasing the customer base.

  1. Discussing the foundation of the NCP, its convergence with the foundation of loyalty and the inherent advantages cooperatives can develop based on this convergence

The emergence of a new cooperative paradigm (NCP) seeks to respond to the urge to find  a management model that can fit the cooperative form of business organization. Additionally, NCP also aims to address the identity crisis that influences the performance of cooperatives in areas such as banking and agricultural industries.

Loyalty as the foremost component of NCP highlights the convergence between the foundations of cooperative identity and competitive advantage. Through NCP, managers and other elected board members in a cooperative are motivated to come forward with a distinctive identity. As a result, the relationship between NCP and loyalty ensures that customers are offered services that are more advantageous and that focus on their priorities. Furthermore, a cooperative is able to develop a win-win relationship with its stakeholders where their needs are placed before profits. Consequently, stakeholders demonstrate loyalty towards a firm where they also offered an environment that respects their values.

  1. Discuss the implementation issues in dealing with the customer orientation strategy in a cooperative context.

In dealing with a customer orientation strategy in a cooperative context, it is beneficial to consider how value can be added to the stakeholders in a cooperative. In essence, for clients to be satisfied, the managers of cooperatives should find out about the customer current and future needs. Customers should also be given a chance to highlight their opinions and feedback on the quality of products or services being offered. Equally important, is the diagnosis of business practices that are necessary in developing customer loyalty. Also, in implementing the customer orientation strategy, leaders of a cooperative should also focus on external factors that affect them such as competition, technology, and regulation among others. Likewise, it is also critical to consider the market intelligence and how it can help an organization to adjust to different environmental circumstances.


Part 2

  1. The key factors that cooperative leaders should consider in approaching the management of loyalty
  1. Based on St. Roch case study

It is important for the cooperative leaders in an organization to let all the stakeholders understand the need for loyalty. In relation to this, leaders should know that staff loyalty is essential in winning the loyalty of customers. Based on the St. Roch case study, cooperative leaders should inform employees that their participation in a loyalty program is voluntary and hence requires their full commitment for it to be successful.

In the management of loyalty leaders need to analyze the accessibility of the company products and services to the customers. This requires the leaders to find out how customers judge the accessibility of the products being offered. If the access is difficult, then it clearly indicates that the customer loyalty is at the lowest level. However, if an organization facilitates the access to the customer and gives solutions to improving the customer’s lifestyle, then the level of loyalty is high. In addition, cooperative leaders should also consider the experience of the customers and how they are treated in an organization. In this regard, customer loyalty is likely to be low when they are not respected and high when their needs are addressed by an organization.

Another area that needs to be discussed by the cooperative leaders is the prices of the products or services. According to this case study, inconsistent prices lower the customer’s loyalty while consistent prices increase the loyalty. Equally important in the management of loyalty is to have the knowledge of the quality of the products offered by an organization. With high quality products that are consistent and reliable, the customers are likely to have loyalty to the products. Likewise services offered to the customers should also be considered since services that address the customer’s needs also improve their loyalty. In general, cooperative leaders should understand that customers tend to be loyal when they are satisfied.

  1. Based on SCA des Bois-Francs case study

According to this case study, businesses lose 50% of their customers in 5 years, half of their workers in 4 years and half of their shareholders annually. This clearly shows that lack of loyalty may affect the performance of an organization by up to 50%. When cooperative leaders are aware of these statistics, they are in a better position to understand that loyalty is a critical concept in determining the success of a business.  From this information, leaders should make sure that management of loyalty applies to customers, employees, and other stakeholders in a business.

To earn customer loyalty, an organization needs to incorporate some cardinal principles into management. First, the relationship between a customer and an organization should be based on uncompromising ethics and integrity. Customer trust and access to information should also be enhanced while the relationship between the customers and the employees should remain positive. Moreover, the relationship between a firm and its clients should be close where future client needs and expectations should be anticipated.

Cooperative leaders should also be aware that loyalty forms part of the basic corporate strategy. Closely associated with this is that any firm that is ready to pursue loyalty should have its management practices reviewed in order to include loyalty as part of its goals. Some of the factors that should be reviewed include the management commitment, client satisfaction, loyalty measurement methods, identification of the client needs, and practices that focus on continuous improvement. Therefore, cooperative leaders should understand that loyalty involves putting management principles into practice and establishing positive relationships among the customers, employees, and other stakeholders in a firm.

  1. My opinion on the relevance of the NCP when considering a modern approach to cooperative management

In relation to the modern approach used in cooperative management, NCP is quite relevant and practical. This has largely been observed in the value it brings to a cooperative due to the introduction of a management model that is used in the management of cooperatives. It is also of paramount importance to note that NCP is also used in finding response that is effecting or undermining the management in cooperatives. If cooperatives have to cope with the economic and social challenges that have become evident in the 19th century, then adopting the NCP approach is inevitable. Similarly, NCP adds to the people who directly benefit from a cooperative. These include members, employees, customers, as well as communities that benefit from organizations various ways.

In the contemporary society, NCP ensures that stakeholders in cooperatives are appreciated and respected while at the same time facing the challenges associated with competition and in building competitive advantages that are unique. In the modern approach to cooperative management, NCP is applied in dealing with the change of the ‘member’ concept towards individualism. This has seen a situation where the members affiliated to a cooperative are becoming like customers.  As a result membership is increasingly being defined in the context of personal interests of the members.

Due to the public nature of cooperative ownership, cooperatives offer open membership which can be attained at minimum cost. This has led to a situation where the members do not really understand what the cooperative. However, NCP strives to promote the relationship between the members and the cooperative.

Another structural change that has affected cooperatives is the introduction of competition. This has resulted in increased pressure on the management of a cooperative business to be done in accordance to the existing market rules. In fact, this has become even more challenging because principles and rules of cooperative practices are not illustrated clearly. With competition, NCP assists managers to come up with strategies that would attract more customers and additional members to join the cooperatives. Unlike in the past where cooperative managers were paying attention to attracting new customers, the NCP has influenced managers to implement strategies that will increase loyalty to the stakeholders in order to retain them. This has proved to be productive because stakeholders do not join the competitors since they are satisfied in their improved cooperatives.

The NCP is also prominent in the management of cooperatives because it is allowing the managers to come up with strategies that harmonize the various stakeholders in a cooperative. In reality, with NCP, managers understand that loyalty does not apply to customers only but also to other stakeholders including the employees. With this in mind, managers are in a better position to pursue their business in a way that satisfies all the stakeholders in a cooperative. Eventually, this has led to more customers and members joining the cooperatives, a situation that has led to increasing sales and profitability. To sum up, NCP has greatly contributed in increasing revenue collection in cooperatives.

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