An Overview of Management Practices in the Cooperative Sector: Basis for a Business Model

Abstract

Cooperatives have become a source of income power and a tool for improving not only the financial capability of the members but more importantly, have become a common ground of power for production of either goods or services.  They are formed to provide goods and services needed by its members where the profits derived from the operation will go to the members themselves in the form of patronage refund. Despite the positive developments in the situation, there are also negative sides.

With this, the study sought to analyze the management practices in the cooperative sector. The study focused on the profile, management practices, compliance to cooperatives operational requirements and the manifestations of the common problems in the management of the cooperatives. The output of the study is a proposed business model for the management practices of cooperatives.

Empirical in nature, the study utilized the descriptive method of research since it centered on evaluating the management practices in the cooperative sector. Data were gathered from two groups of respondents, the officers and members from the top millionaire cooperatives in the CALABARZON area. Descriptive statistics such as frequency count, percentage and weighted mean were statistical tools used to treat data.

As found out, like any other business organization, a cooperative has a vision and mission where cooperative principles are clearly manifested as service-oriented business organization which is owned, patronized, managed and controlled by its members and whose main objective is to serve the needs of the members within the framework of the universally-accepted principles of cooperative.

Selected cooperatives are located in CALABARZON area with Batangas having the most number of areas of operations. Finding revealed almost half of the cooperatives from different provinces had been in operation for 31 to 35 years. Majority of the cooperatives were stable in all aspects of their business and had members ranging from 5,001 to 6,000. Most of the members in selected cooperatives were women. Loan services to members surfaced as the leading function performed by the cooperatives. The different cooperatives complied with administrative and legal requirements and those requirements mandated by the DOLE, BIR, and LGU. Cooperatives may be described in terms of its vision/mission, area of operation and type of cooperative, number of years of operation and size of membership, membership composition, nature of business/service rendered; and compliance with administrative and legal requirements. 

The management practices in cooperative sector in terms of related operational detail was rated highest by cooperative entities. The ratings of the research participants on the management of the cooperatives relative to the COOP indicators were the same indicating no significant difference existed among the ratings of the respondents based on different indicators.

As to problems commonly encountered in the management practices in cooperative sectors, results revealed that rarely were there problems in the management of cooperatives. This was because the cooperatives were included among the Top Millionaire Cooperatives. Generally, however, that the BOD and members did not experience problems with what the management had given to them, administration provided the mandated needs of each employee as well as its members. As contribution of the researcher to management of cooperatives, the researcher’s proposed business model is comprehensive enough to provide the cooperative stakeholders a guide that can serve as basis for their future courses of action.

This study recommended that member-owners be given freedom and responsibility in the formation, organization and operation of the cooperative. Also the Cooperative Development Authority (CDA) should closely monitor and evaluate the performance of cooperatives based on the annual report submitted through a monitoring evaluation system to keep track of the progress and operation of cooperatives.

Further research and case studies about cooperative is encouraged. The researcher, as an academician also suggests the integration cooperative in the curricula of social sciences in the secondary and tertiary levels.

Finally, the proposed business model may be tried out to strengthen the cooperative movement in the region.