Practise IB Business Management HL 1.2.3 by analysing cooperative governance and the balance between social impact and commercial sustainability.
JP
JP produces electric guitars. It is a cooperative owned by a committed workforce who share in the management and success (or failure) of the company and its profits. Workers enjoy having control over the workplace and are productive. However, JP's continued success is threatened by insufficient finance, which prevents them from spending more on traditional promotional methods.
J P 's guitars are expensive relative to the competition but are known for their quality. Its customers are very brand loyal. The use of social media marketing by many famous musicians influences JP's brand loyalty and awareness. Unfortunately for J P, one especially famous musician using a JP guitar on social media recently received negative publicity about his private life.
JP follows strict quality procedures that include quality circles. JP's management believe that teams of workers employed on the production line know the production process best and are in the best position to make any necessary improvements. Staff turnover at JP is very low.
XYZ, a large company known for its kitchen appliances, is considering moving into the musical instrument market as part of a growth strategy - they want the high gross profit margins on guitars (compared to the low profit margins on kitchen appliances). X Y Z wants to take over JP. XYZ has a strong balance sheet and large cash reserves and is an expert at marketing.
The cooperative has refused to consider the takeover bid from X Y Z. The cooperative has argued that the culture of X Y Z is too different to JP's. XYZ's management are viewed as too controlling. However, increased price competition has led to falling sales, forcing JP to make redundancies. Some cooperative members argue that unless JP accepts XYZ's bid, additional jobs will be lost.
Define the term cooperative.
cooperative is a type of 'for profit social organization' that is established owned and managed collectively by members, each of whom has a financial interest in the business and a say in how the business is run.
A cooperative operated by its members for their mutual benefit and can be organized by producers, consumers or employees
Award [1] for a partial answer showing some partial knowledge of cooperatives such as that it is an organization which is owned and run by all its members.
Award [2] if there is a further understanding that cooperatives exist for profit but with some social objectives that benefit its members.
Candidates do not have to identify the different types for full marks
Award [1] for a basic definition that conveys partial knowledge and understanding.
Award [2] for a full definition that conveys knowledge and understanding similar to the answer above.