Educating, training and retraining of members in general and officers in
particular is always a challenge to cooperatives especially in
developing countries. A cooperative without a strong component of
education is in danger of losing its essential character, that is, the
human and personal characteristics which distinguish it as a
cooperative. Education is of paramount importance to the cooperative
sector. Unless all those responsible for cooperatives (directors,
officers, members, staff) are well informed and knowledgeable,
cooperatives are likely, in some countries, to become much like
capitalist, profit-seeking business, or in other countries to become
handmaids of the State. Education makes people easy to lead, but
difficult to drive; easy to govern but impossible to enslave.
Assuming
the validity of the sector concept (the "mixed economy", as it is often
called), cooperators face such questions as what type of business
activity is most suitable for each of the three sectors, public, private
and cooperative? Are there certain kinds of business that rightfully
belong to the public sector? Are there others, which are best left to
private enterprise? What kinds, ideally, are most suitable for the
cooperative way of business? Are there some fields in which all three
may engage and compete? Hence, one other challenge that cooperative
societies face is the choice of business most suitable for the
enterprise.
Another challenge facing cooperatives is adaptation. No
business in a national economic system is completely independent and
self-sufficient but operates in conditions of dependence and
interdependence. Both capitalist business and cooperatives depend to
some extent on the State and services provided by the State (highways,
water supply, the postal system, etc.). Similarly, the State and public
enterprise depend greatly on private enterprise, or on cooperatives.
Sometimes private-profit business depends on cooperatives. And, of
course, the reverse, cooperatives depending on private business in some
way or other, is quite common. Thus, cooperatives cannot be thought of
as an exclusive economic system but rather as one section of the total
economy. They constantly operate in co-existence with other forms of
business and sometimes in conjunction with them. Co-operatives
therefore, have to adapt themselves by struggle in one place, by
agreement in another - to the elements of a complex environment, partly
free and partly organized. It must now decide what place it means to
claim for itself in the new economy, either organized or in process of
organization.
In addition, the cooperative sector suffers from an internal handicap of
its own making: the frequent failure of various types of cooperatives
to work closely together as a sector. Because of their voluntary and
democratic nature, cooperatives have been reluctant to impose strict
disciplines on themselves - they much prefer to act by common consent
and persuasion. Often, management of cooperatives relies on relationship
or is moved by sympathy to act against even the societies’ bylaws. This
indeed has a lot of repercussion particularly in the developing
economies and is against the 6th principle of cooperatives: Cooperation
among Cooperatives. The different needs of customers, members, patrons,
and owners challenges the cooperative’s board of directors and manager
to make good business decisions. Business earnings of the cooperative
must be great enough to systematically rotate the investment of members,
pay patronage, and offer goods and services at reasonable prices or pay
fair market value for customer’s products. This unique business
structure dictates that the manager, board of directors, and members
understand the business and cooperative structure.
To better tackle
the above problems, Taimni (1997) suggested, in addition to fore
mentioned, that cooperatives should make optimum use of all resources
and strive continuously to enhance productivity of resources; ensure
highest efficiency while providing services to members; improve
management capabilities and competencies through effective
organizational designs and structures; mobilize capital and lay greater
stress on internal capital formation and accumulation; develop and
retain human resources - members, leaders, staff and managers; forge
strategic alliance with key institutional actors in the new
environments; evolve and sustain integrated, vertical structures;
increasingly focus on directly enhancing socio-economic conditions of
their members by undertaking value-added operations; encourage members'
participation through improved, diversified services; and strictly
adhere to the values of honesty, openness, caring and concern for
community and environments.
Once this is done, it is hoped that
cooperatives would be able to overcome the problems and challenges
facing them. It however, calls for maintaining balance between economic
and social purposes, emphasizing differences, relating with other
cooperatives both at national and international levels, and maintaining a
favourable public image.
