Good Governance Practice for Better Performance of Community Organizations - Myths and Realities!!

Journal of Power, Politics & Governance, Vol. 1 No. 1, December 2013

Good Governance Practice for Better Performance of Community Organizations - Myths and Realities!!

R. Dayanandan, PhD

Background

Community organizations (Cooperatives) are unique institutions that balance and negotiate relationships between their members, communities, traders, the state and international commercial traders: social capital facilitates these relationships. According to Folsom (2002), having a businesses owned and controlled on a cooperative basis helps farmers’ entire community. Evidence shows that cooperatives enable farmers to achieve economies of scale, bargaining power and capacity to invest in more advanced stages of the value chain including storage, processing, marketing and distribution. Besides, as community institutions, cooperatives devolve decision making to the community level, build social capital, community spirit and pride (Reynolds, 1998).

The participation of cooperative unions in the economic activities is affected by their management capacity, experience and access to credit. This is due to lack of good governance practices (Bezabih, 2009). From this, it can be concluded that governance practice determine the performance of cooperatives in Ethiopia in general and the study area in particular. The success of cooperatives would depend on the way that cooperative organization structured and apply good governance practice, which is the base for members’ participation. Good governance emerges through honest application of the prevailing laws and respecting the spirit behind this law (Imran, 2009). Hence, it is imperative to evaluate the existing governance practice and its impact on the performance of People’s organizations (Cooperatives).

Formulation of the problem

1. To knowing the selected primary cooperative management practices in the study area?
2. To know the level of awareness of the members of the cooperative against good governance practices?
3. To know the impact of governance practices on cooperative performance?
4. To Know the factors that hamper good governance practices in cooperatives? 

Purpose

1. To understand the governance practices of selected primary cooperatives in the study area.
2. To assess the level of awareness among the cooperative members on good governance practice.
3. To examine the impact of such governance practice on the performance of the cooperatives.
4. To identify the factors that hinders good governance practice in the cooperatives. 

Research methods

Multistage sampling procedure was followed to select the primary cooperatives and sample members. In the first stage, from eight types of primary cooperatives, two primary cooperatives from each type were selected purposively based on seniority of establishment. There are 1627 members registered in the selected 16 cooperatives. When using different standard formulae (Kothari, 2004 and Emane, 2000) to arrive sample size, it becomes more than 300 which are difficult to manage within the limited time and resource. Hence, Carvalho (1984) table was used to arrive the sample size. Thus medium size (m) 125 samples had been arrived from the total of 1627 members in the selected cooperatives. Finally proportionate random sampling technique was used to identify the sample members as respondents. The required primary data was collected using pre tested semi- structured questionnaires. The collected data was analysed by Statistical Package for Social Science (SPSS version 20) and descriptive statistics such as mean, percentages and chi square along with binary logistic regression model were used to arrive the conclusion.

Conclusion

The findings indicate that inadequate business participation, poor responsiveness, lack of awareness about the management, lack of democracy, corruption, poor sense of ownership, double responsibility and lack of members’ awareness were found to be the reasons for weak performance. The binary logistic regression model results show that, four predictor variables such as participation, accountability, transparency and rule of law are found to be significant on the impact of cooperative performance which needs due attention of the concerned stake holders to maintain good governance practice. It is suggested that the identified problems would be addressed through collaborative and deliberate action of both members and the government.

Reference

R. Dayanandan, PhD .(2013). Good Governance Practice for Better Performance of Community Organizations - Myths and Realities. Journal of Power, Politics & Governance, Vol. 1.