Cooperative societies are formed based on certain principles which distinguished them from other business organizations. Odey (2009) asserts that such principles may be based upon the new models of scientific management of businesses and applied economics. Similarly, Olayide (2005) and Whethman (2008) asserts that there is a great distinction between cooperative societies and non-cooperative businesses. The introduction of cooperative societies, Whetman argues, is to remove the evil effects of the capitalist system of production which did not go down well with the common man’s aspiration.
Cooperative societies are known to bring about low prices of goods. Goods are bought directly from manufacturers at factory prices and sold to members at controlled prices thereby making their selling prices to be lower than the operating prices in the open market. Cooperatives are managed along democratic lines. Members, for instance, have equal voting rights, equal opportunity to participate in the management and control of the societies and make inputs to policies (Warbasi, 1947).