Assessment of the entrepreneural potential and business assistance needs of cooperatives in Cabuyao, Laguna

William C. Ku

Date

2010

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Nanette C. Abelilla-Aquino

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Abstract

In line with the national government goal of alleviating the poverty in the country, regional sectors have made plans to meet the targets and objectives set. Cabuyao, being one of the municipalities in Laguna under Region IV-A CALABARZON, in the course of its vision of uplifting the quality of lives of its people, supported the said primary aim. The Cabuyao Investment and Development Authority (CIDA) was subsequently established to promote entrepreneurship among the citizens of the town. In order to do so, there is a need to assess the entrepreneurial potential and business assistance needs of different types of organizations. Operating cooperatives within the area were identified as one. CIDA was the direct response of the Municipal Government of Cabuyao to exercise its corporate power in accordance with Section 15 of RA 7160 or the Political and Corporate Nature of Local Government Units under the Local Government Code of 1991. Data obtained from the Cooperative Development Authority (CDA) revealed that since 1991 up to present there were already 75 registered cooperatives in Cabuyao. However, only 25 were considered operating. Given this condition suggests that these cooperatives to be placed under research study. The study was conducted to assess the entrepreneurial potential and business assistance needs of the cooperatives in Cabuyao, Laguna. Specifically, it aimed to present the profile of the cooperatives of the study, identify common problems encountered by the cooperatives, assess the Municipal Cooperative and Livelihood Development Office (MCLDO) in its program and services to the cooperatives, present the identified specific business assistance needs of the cooperatives that can be provided by the Cabuyao Investment and Development Authority (CIDA) in its business support service offerings, and assess the capacity of the cooperatives to engage in entrepreneurship. Twenty three out of the 25 operating cooperatives or 92% were included in the study. Respondents of the study were primarily officers of the cooperatives. The study employed descriptive design to answer the research problems and objectives posed at the beginning of the study. Primary data consisted of the answers of the respondents through the survey and self-rating questionnaires. Interviews were done to determine in-depth pieces of information pertaining to the activities and management of cooperatives. A survey questionnaire, test of organizational and managerial efficiency, and Personal Entrepreneurial Competency (PEC) self-rating questionnaire were used as research instruments. On the other hand, secondary data were sourced from the Municipal Planning and Development Office (MPDO) and the Municipal Cooperative and Livelihood Development Office (MCLDO). The Cooperative Development Authority (CDA) was the one that provided the list of operating cooperatives. Preliminary studies related to CIDA were also used. The study also made use of previous special problems and theses related to cooperatives conducted by undergraduate students in UPLB. Some articles published by the Agricultural Credit and Cooperatives Institute (ACCI) were utilized too. Also, electronic journals and articles were sourced from the Internet regarding entrepreneurship and business support services.

It was noted that operating cooperatives were vulnerable to failures considering that most of them are still new together with MCLDO which was also regarded to be still young in handling cooperatives. Thus, given the conditions of the two wherein the former has to enhance its internal management while the latter has to complete its resources including competent staffs, business incubation program cannot be entirely embraced. However, even without the physical appearance of the business incubation program, its core features which are the business support services can still be pushed through. Based from the assessment of the entrepreneurial potential of the cooperatives, majority of them were

remarked as weak considering the five criteria used. These were risk-taking, opportunity- seeking, and persuasion and networking, availability of capital, and members’

participation. Out of the 23 cooperatives, only three surpassed all the criteria. This implied that majority of the operating cooperatives, at present, were not yet ready to promote entrepreneurship to their members. Recommended strategies to address the findings of the study with respect to the assessment of the business assistance needs include capability-building programs, diversification and market development, new product development, strategic alliance, and service development combined with basic entrepreneurship support, business development support, financing and networking services to be initiated by MCLDO. Some of the specific business support services include lectures with regards to cooperative management by either MCLDO or other institutions, seminars regarding risk management, persuasion and networking, debt management, human resource management, credit management, budget preparation and financial statement analysis, access to financial institution or modification of the loan program to solve the lack of operating capital, linkage to research institutions for possible technology transfer and identification of investment opportunities that engaged in agribusiness, conduct of supply chain analysis, establishing partnerships with manufacturing firms around the municipality, formation of federation among the operating cooperatives in Cabuyao and assistance to conduct community development programs. MCLDO is also suggested to have an annual recognition rite for outstanding operating cooperatives in Cabuyao to strengthen and promote the cooperative sector. Key success attributes were shown using the balanced scorecard which were classified in its four domains namely customer, financial, internal business process, and learning and growth perspectives. On the other hand, recommendations in terms of assessment of the entrepreneurial potential include reorienting the loan program of the MCLDO towards promoting entrepreneurship rather than economic activities of the cooperatives. Also, MCLDO should assist the Cabuyao-based cooperatives in forming strategic alliance either among them or to federations. Every cooperative to make their entrepreneurial endeavor a success should have a clear vision of improving the wealth of all the members in terms of earning more than what they received from interest on share capital and patronage refund for the patrons to support the entrepreneurial activity of the cooperative. Finally, it is suggested for the officers coming from cooperatives to undergo seminars, trainings and workshops related to enhancing their entrepreneurial capacity that can influence them in their decision-making and then eventually enabling them to encourage all the patrons to engage in an entrepreneurial activity.

Language

English

Location

UPLB College of Economics and Management (CEM)

Document Type

Thesis

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