Qualitative Meta-Analysis of Success Factors and Challenges Faced by Cooperatives in the Philippines

Date

12-2018

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Melodee Marciana E. De Castro

Committee Member

Dinah Pura T. Depositario, Nohreen Ethel P. Manipol, Agnes T. Banzon, Normito R. Zapata

Abstract

Cooperatives are one of the most effective ways to attain economic growth and equitable distribution of income. Their main purpose is to help improve the life of its members and the members of the community. Cooperatives, just like other business or enterprise, face challenges in their operations. According to the Cooperative Development Authority (n.d.), one of the fundamental causes of failure of some cooperatives is the lack of understanding of the principles and objectives of cooperatives and noncompliance of the objectives and principles in the operations of the cooperative.

The main objective of this study is in order to identify patterns on the common factors to the success and challenges faced by cooperatives from the objectives of studies by the undergraduate students of the University of the Philippines- Los Baños (UPLB) under the College of Economics and Management (CEM). Specifically, it aimed to: (a) present the profile of the cooperatives in the study; (b) identify the issues and challenges faced by the cooperatives associated with the five business functions; (c) determine the key success factors of the cooperatives; (d) analyze the patterns in the challenges faced by the cooperatives and key success factors according to different variables; and (f) formulate recommendations on the identified issues of the cooperatives

Secondary data were gathered through consolidating multiple cases of cooperatives of undergraduate students of the University of the Philippines – Los Baños. The strengths and weaknesses, as well as the challenges faced by the cooperatives were gathered from past special problem reports. In addition, audited financial statements (AFS), were used as source of information for cooperatives in the study.

Qualitative meta-analysis was conducted to compare the status and performance of cooperatives in different functional areas. A problem tree analysis was applied to determine the issues and challenges on every business function. For the financial analysis, financial ratios were calculated to measure liquidity and financial risks of the cooperatives under study.

Seventy-one (71) cooperatives composed the subject of the study. Out of the 71 cooperatives, only 41 are among the still surviving registered cooperatives as of 2015 at the Cooperative Development Authority (CDA). These cooperatives were categorized according to the following: geographical location (region and area), type (cooperative type and commodity), size (asset size), and year of existence (age). Majority (67.61%) of the cooperatives are located in Region IV-A (CALABARZON), residing in rural areas (54.93%), are multi-purpose type (73.24%) of cooperatives, have credit (31.58%) cooperative as their business nature for single-purpose cooperatives, have credit (26.76%) and marketing (26.76%) cooperatives as their business nature for multi-purpose cooperatives, are involved with crops (42.25%) as their commodity, have large asset size (36.67%) or cooperatives with total assets of more than P100 million, and are from 6 to 10 years in operations (42.25%) at the time of study.

The results showed that the significant issues and challenges of the cooperatives came from the financial management (34.45%), mismanagement of the human resources (21.80%), production/operation management (19.54%), marketing management (13.11%) and, lastly, general management function (11.83%) of the cooperatives.

The main problem, causes and effects of the issues for each business function were identified by using a problem tree. The main problem identified in the financial area is the low profitability, ineffective management in the management area, low production in the production/operations area, and low sales in the marketing area.

In the analysis of financial statements, the liquidity ratio was used to measure the liquidity of the cooperatives and the leverage ratio was used to measure the proportion of debt to assets and debt to equity. The trends of the liquidity ratios were declining. But the current and quick ratios in general showed that the cooperatives were still able to pay the liabilities. The leverage ratios of the cooperatives showed decreasing trend as well.

Six key success factors were used to measure the performance of the cooperatives under study. These are: (1) proper management; (2) member commitment and satisfaction; (3) proper training and/or experience of members and management; (4) quality of products and/or services; (5) strong financial structure, and (6) external support.

The average scores of the cooperatives based on the area, type, commodity, and asset size are relatively close. External environment that have an effect on their succession rates include weather conditions and the political-legal factors. Key success factors ratings showed that Makiling Forestry Credit Cooperative has the highest score of 2.45 followed by Nueva Ecija Federation of Dairy Carabao Cooperative with 2.30. Producers Cooperatives Feeds, Incorporated has the lowest chance to succeed having a score of 1.05. As of 2015, Makiling Forestry Credit Cooperative and Nueva Ecija Federation of Dairy Carabao Cooperative are still listed in the registered cooperatives of the Cooperative Development Authority. The average score of the cooperatives is 1.88 which is relatively low based on rubrics made.

Lastly, it is recommended that the cooperatives engage in continuous innovations in terms of the business functions as well as trying to meet key success factors to sustain cooperatives vis-a-vis issues at hand.

Language

English

LC Subject

Cooperative societies--Research

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2018 M17 M68

Notes

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Document Type

Thesis

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