The Cooperative Bank

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ABSTRACT
This paper examines the foundation and operational systems of the cooperative bank and its attempt to position itself within the context of two generic identities; the cooperative movement and the generic identity of the banking industry. It takes a look at the ethical policy concepts of the bank as its business model and how this has evolved as a differentiation characteristic for the banking industry. It also explores briefly the evolution of the bank since conception, its successes and challenges so far, and its target markets.

INTRODUCTION
The cooperative bank was established in 1872. It has a proud history as part of the cooperative movement whose early foundations are traced back to efforts of peasants to break free from capitalist principles and its social system. Its ethical policy strategy was launched in 1992 and states who it chooses not to do business with. These include but not limited to the following: (i)Businesses with links to environmental damage

(ii)Arms and fur trade
(iii)Genetic modification and animal testing

A report by Nicholls (2007) 1 “defines ethical markets as an aggregated consumer-provider (demand-supply) exchange transactions of goods or services that have as one of their defining product characteristics – a normalised notion of social and/or environmental benefit.” The cooperative bank operates as a business that is not driven solely by capital but also by human rights and social justice. The bank enjoyed tremendous success in the early 80’s and pioneered innovative ideas such as free interest bearing cheque accounts and free in-credit banking.

MITIGATING FACTORS AND SUCCESSES:
Due to change and innovation, the organizational structure of cooperative banks has evolved. Co-operative banks today increasingly consist of complex ownership structures that mimic the organisational models of commercial banks. According to Wyman (2008) 2 ‘‘their defining characteristics are no longer as clear cut as during...
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