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Structure of Small Business Associations


Recommendation of organizing
Structure of Small Business Associations
[Purpose]

Japanese small businesses often find themselves at a disadvantage because of their small scale and their weak credit position. As a result, it is helpful for companies in the same industry to get together and to organize to raise productivity, to better their positions within the industrial structure, and to improve their competitiveness.


[Types and Characteristics of Associations]
Common facility cooperatives

These cooperatives try to improve the economic standingsof and promote managerial rationalization for member small business through cooperative activities in the spirit of mutual assistance. Each member invests in the cooperative, which carries out activities such as:

  • Undertaking joint production, processing, sales, purchases, storage, transportation, inspection, etc for members' enterprises.
  • Loading capital to members
  • Promoting welfare and leisure for members
  • Providing education and information for managerial and technological innovation
  • Signing collective agreements to improve the economic standing of members

The intent of all of these activities is to promote rational management of member enterprises.

Although it is necessary to obtain the prefectural governor's approval for establishing a cooperative, this is relatively easy, since it is enough to have four entrepreneurs in an industry banding together. As a result, such co-operatives are widely utilized for rationalizing small business management, and theyextend their activities even to collective housing projects for industrialand commercial communities and to cooperative lunch programs.


Small common facility cooperatives

The small common facility cooperative is simply a smaller version of the common facility cooperative, and it's operations are similar. To be eligible for membership, a business may not have more than five employees, and less than two employees for business in the retail or service sectors.


Business cooperatives

A business cooperatives is an independent industrial or commercial enterprise created by the labor and capital of small-scale entrepreneurs or individuals. While the common facility cooperatives and small common facility cooperativesmanage only a part of their activities together, business cooperative membersmanage the entire range of their activities jointly. This is most effectivefor very small entrepreneurs wishing to enlarge their enterprises and toimprove their economic standings.


Joint business cooperatives

The associations aim at improving productivity by joint management, either in part or in whole, of an enterprise in which small entrepreneurs have been engaged. It can be partial joint management as in the common facilitycooperative or total joint management as in the business cooperatives. The only restriction is that the members must be experienced entrepreneurswho plan to participate, in part or in whole, in the jointly-managed enterprise.


Commerce and industry trade associations

These are associations of people in the same business who seek to promote and stabilize the general conditions of the industry. The requirements for establishing such a body are that it must encompass an area not less than asingle prefecture and must include more than half of the total number of people in that business. These associations engage in the following activities.

  • Formulating regulatory measures to overcome the ill effects of excess competition
  • Coordinating management rationalization
  • Providing guidance and education, collecting and supplying data, and drawing up research andsurvey plans for members
  • Signing collective agreements for members
  • Signing special contracts concerning advances by bigger businesses
  • Conducting joint management and accounting projects similar to those of the industrial cooperative unlons

Environmental hygiene trade associationss

These include entrepreneurs closely tied with environmental hygiene, such as restaurants,bars, barbers, hotels, public baths, and laundries.

At present,there are 18 categories under this classification. Each association establishes agreements on management rules and standards for the distribution offacilities to see that appropriate sanitary measures are taken and to benefit member facilities.


Shopping district development cooperatives

These are organized by retailers and service agents at a given shopping district. They aim to promote their shopping centers by constructing such joint facilities as street lights, arcades, and parking lots. In addition, they can also engage in joint purchases, joint advertising, joint use of service and gift coupons, and projects to improve working conditions.


Federations

Federations are organized by two or more common facility cooperatives, small common facility cooperatives,commerce and industry trade associations,mutual fire insurance cooperatives,credit cooperatives, shopping district development cooperatives, etc. The national federations of common facility cooperatives and the commerce and industry trade associations engage in such industry-wide tasks as guidance, research and studies, and information-gathering in each field. The federations of commerce and industry trade associations can also set comprehensive regulatory agreements.

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Structure of Small Business Associations

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