Trade association is a nonprofit organization that represents a group of business firms. Businesses join their associations voluntarily and manage them cooperatively. The companies work together to accomplish goals that no single firm could reach by itself.
A trade association may have only a few members, as in the ironmaking and steelmaking industry. Or it may have thousands of members, as in an association of retail grocers. The size of the membership has little to do with the effectiveness of the organization. It is more important that the association include most of the companies in the industry.
Trade association activities include promoting business for the industry; encouraging ethical practices in the industry; cooperating with other organizations; and holding conventions. Such associations also work to obtain good relations with the government, the industry’s employees, and the general public.
Trade associations sponsor much industrial research work. This research helps improve the quality of goods or services sold by individual firms. Setting industry standardization is another important trade association activity. By obtaining agreements among firms, the trade association sets standards of size and quality for articles and services.
A trade association acts as a source of information about its industry. It may issue bulletins on business trends and provide statistical information. Some publish magazines that are distributed to the public. Trade associations date back to the guilds formed in Europe beginning in about the 1100’s, during the Middle Ages.
