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No More Excuses: The Coop Should Restructure Now

Column by Raajnish A. Chitaley

I have always looked forward to the Harvard Cooperative Society's rebate. I think of the Coop rebate as a little unexpected present, sort of like finding a washed dollar bill in your back pocket. With the outrageous prices that we pay for textbooks, tuition, and everything else, the rebate was always a sign that we were not being altogether abused. Other than the rebate, the Coop has always just sort of existed - just another over-priced department store to wander through.

I'm not particularly sure about the Coop's history, but I guess that serving student needs when department stores were few and far between had something to do with it. But does the department store model work today? Its original mission notwithstanding, the Coop has for the most part ceased to serve students. It's time for MIT and Harvard to re-examine the Coop's role on campus.

The latest news about the Coop rebate, or lack thereof, lends credence to the view that MIT and Harvard should scrap the existing Coop. In previous years the Coop served its membership by producing rebates in the double digits. By my freshman year, the rebate just covered Massachusetts sales tax.

When questioned about declining rebates, the classic Coop response has ranged from, "It was a tough year," to, "We're trying real hard." In short, lots of charts, graphs, and equivocation. Fortunately the management of the Coop has created a new textbook rebate to assuage the masses; for the vast majority of students, this rebate will be equivalent to or better than the usual rebate. But to measure our satisfaction by the rebate alone is narrow-minded.

Independent of the rebate question, what sort of service is the Coop providing to the academic community or its members? Consider books. The Coop does remain one of the finest booksellers in the area, but Waterstone's (Exeter and Newbury Streets) and Quantum Books (Kendall Square) are formidable competitors for technical and science books, with distance no longer an advantage. The same is true for music; with Tower Records and HMV, two fabulous music stores, the once noteworthy Coop music department is no longer the best.

And with so many major department stores (including an entire mall complete with Gap) so nearby, the Coop can only marginally compete as a department store. As for things like office supplies, Staples and even University Stationary are hard to beat. That only leaves posters and insignia wear as areas where the Coop can be competitive. (In Harvard Square, insignia sells well and the poster shop is along the street.)

The textbook business deserves more attention because it is indicative of how the Coop operates. Coordinating the bi-annual purchasing and distribution of text books is certainly the Coop's most critical function. Yet the floor space devoted to textbooks is in the most difficult area to reach: a basement corner. And the size of the floor space is woefully inadequate for the number of books and traffic volume.

The Coop does not do much of a coordination job either. Shouldn't the Coop, instead of students, be responsible for nagging faculty and departments, to turn in book orders on time? It seems like an efficient function that could serve both students and faculty well. I wonder whether the Coop thinks about business from this perspective?

So what should we do with the Coop? First things first, I think the Coop should use its valuable real estate to its advantage. I'm not sure whether the Coop owns or leases their space, but I do not see a need for a Coop in Kendall Square. In fact, before the renovation of the Student Center in the late 1980's, the entire MIT Coop was located on campus. If they own the Kendall Square location, they should rent it to someone else, and use the income to subsidize textbooks. In addition to possible financial advantages, everyone (except us poor economics majors in E52) could do without the long march for text books.

More important than real estate is merchandise. The Coop should abandon the department store concept for something more focused on academic needs. In my mind, this translates into specialty books and textbooks, and supplies. And when I say supplies, the Coop will have to sell them in Staples-like quantities and prices. I guess the specifics can be argued about, but the spirit is the same: Abandon the department store concept.

Exclusive of business issues, major governance questions need to be resolved. At this time the Coop is governed by the stockholders. They are really just trustees who only meet a few times a year for governance functions. The management decisions are made by the Board of Directors, half of whom are students (graduate and undergraduate) from MIT and Harvard.

Did you know that we have student members on the Board of Directors? I don't know their names, but we have at least three undergraduates and graduate students. The student directors, elected annually, are there to make our voice heard in important management decisions. But the reality of retail management often leaves the Directors with few options, particularly without the same profit motive that commercial retail enterprises enjoy.

Many might believe that aggressive student action or more democratic (i.e. non-corporate) governance will fix the Coop. I do not agree. I think aggressive student interest is absolutely necessary, but I think our actions must be thoughtful and grounded in a solid analysis of the Coop's business. MIT Senior Vice President William R. Dickson '56 recounts a Coop annual meeting during the 1960's, when students had too much free time, where the students impeded business by refusing to even approve the minutes of the last meeting. (As an avid user of Robert's Rules of Order, I find this amusing.)

Apart from noting that the Coop once had annual meetings, this anecdote suggests that the Coop needs to run like a business, without the "student revolution" attitude and whining. After all, students are just one constituency, albeit a significant one, of the Coop's membership. The governance needs to change to empower the various constituencies that the Coop serves.

In the final analysis, the Coop must be streamlined and re-focused on the academic community. Since I have yet to take a single subject in retail business management, I hesitate to be too specific. But the spirit is clear: The Coop needs to re-embrace the academic community and fundamental services at its core. Only then will the Coop's management be able to muster the necessary forces to move the Coop forward. The news of the non-existent rebate is only one indication that we need to bring the Coop into the nineties.