Abstract
The study aimed to identify external challenges that influence the success of consumer cooperatives in the case of southwest Ethiopia. An explanatory type of research design method was applied. The study was focused on seventeen (17) selected active consumer cooperatives in southwest Ethiopia. A three-stage random sampling procedure was adopted for the selection of the sample respondents. In stage one, seven woredas were selected from each zone proportionately. In stage two, from those woredas 17 sample consumer cooperatives were selected. Finally, 385 samples of respondents were selected by simple random method. Political, Technology, Management, Bureaucracy, Marketing, Finance and Infrastructure influence were selected as independent factors. Successes of consumer cooperatives were identified as the dependent variable for this study. The finding reveals variables like politics, management, marketing and finance are important factors that affect significantly the target variables. Factor bureaucracy had no significant influence on dependent variables. The study suggests giving special attention given on problems like lack of marketing and finance access shortage, lagging technological advances and political interference. Therefore, Bench Sheko, Sheka and West Omo zones should solve these challenges.
Keywords
Growth, Political and Bureaucracy, Cooperatives, Management, Marketing, Financing
1. Introduction
Cooperatives are defined as an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly owned and democratically controlled enterprise (ICA 1995). Consumer cooperatives are enterprises carefully held by customers and managed democratically that aim at fulfilling the necessities and aspirations of their members. Consumer cooperatives create shops operated by their consumers, like health care, insurance, housing, utilities, and private finance or including credit unions
| [4] | Deresa, T. K. (2017). Role of Consumer Cooperative Society in Price Stability in the Case of Goh Consumer Cooperatives Benchi-Maji Zone, South West of Ethiopia. International Journal of Cooperative Studies, 6(1), 16–24. https://doi.org/10.11634/216826311706708 |
[4]
.
The first consumer cooperative within Great Britain consisted of staff and peasants in the eighteenth and nineteenth centuries. This type of cooperative later found it’s thanks to different European countries like France, and the Federal Republic of Germany. Accoring to Amene Ydetaa, The Rochdale society of Pioneers was the first successful consumer cooperative organization that was recognized in 1844
| [3] | Biset Amene, T., & Yadessa, A. (2018). Determinants Of Multi-Purpose Primary Cooperatives Marketing Performance In The Case Of West Hararghe Zone, Ethiopia. International Journal of Business and Management Invention (IJBMI) ISSN, 7(October), 11–32. www.ijbmi.org |
[3]
.
In Ethiopia, various self-help co-operatives still exist. They are native or traditional level institutions with an organizational base that are indigenous, such as Debo, Mahiber, Iddir, and Iqub. Those traditional informal cooperatives would be a base for formal cooperatives
. The first cooperative organizations were established in the Federal Democratic Republic of Ethiopia in 1950
| [13] | Savira, F., & Suharsono, Y. (2013). New Role of Cooperatives in Ethiopia: The Case of Ethiopian Coffee Farmers Cooperatives. Journal of Chemical Information and Modeling, 01(01), 1689–1699. |
[13]
. Hence, the first consumer co-operative was established in Addis Ababa in 1945 and after decree No. 44 of 1960 modern or imported‘ co-operatives were formally introduced (ILO, 1975). Consumer cooperative in Ethiopia is the one tool management to supply a varied range of goods and services to its members
| [7] | Kikuchi, P., & Yamao, M. (2016). Japanese Consumer Cooperative: An Alternative Institutional Model to Promote Organizational Learning for Cooperatives in. 3(2), 45–51. https://doi.org/10.13140/RG.2.1.2482.3521 |
[7]
. And now the Ethiopian government is attempting to push co-operatives with the target of developing them into independent self-help institutions.
Now a day cooperatives face one or a lot of the subsequent crises: the crisis of ideology, the crisis of capital, the crisis of believability and the crisis of management
. Inefficient technology, inadequate management skills, lack of member’s participation and political interference may affect the expansion of cooperatives
| [9] | Smith, T. A. (2016). Factors Influencing Growth Of Saving And Credit Cooperative Societies In Kenya: A Case Study Of Kajiado East Sub County. August. Stevens, M. H. H. (2010). Book Review: A Primer of Ecology with R. Journal of Statistical Software, 32(BR-3). http://www.jstatsoft.org/v32/b03 |
[9]
. Additionally, policy interventions such as the provision of the infrastructure necessary for accessing market information and subsidiary regulative framework that might permit a competitive market environment
| [24] | Towera, A. N. (2011). Factors affecting sustainability of Agricultural Cooperatives: Lessons from Malawi. 1–146. |
[24]
. For this the researcher was aim on to determine the significant factors of the success of cooperatives.
Difficulties deterring the success of cooperatives within the economic growth were: backward perspectives, lack of dedicated leadership, lack of decent governance, lack of capital
| [6] | Etefa, D. F & Studies, D. (2019). Assessment of the Role of Research in Molding Cooperative Policies. Public Policy and Administration Research, 9(5), 6–12. https://doi.org/10.7176/ppar/9-5-02 |
[6]
. Several challenges lack capital, problem of good governance, poor cooperation between cooperatives, lack of coaching, lack of managerial ability, and lack of integrity among the management that delay cooperatives from maintaining a certain level of accountability
| [11] | Abebaw Y. and Dejen D. (2019). Growth and Challenges of Cooperative Sector in Ethiopia. European Journal of Business and Management, 11(34) 1-13. https://doi.org/10.7176/EJBM/11-34-03 |
[11]
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A number of the challenge they face were competition from private sectors and shortage of the commodity on the supplier side. Cooperatives have been facing challenges of underperformance in the recent years
| [4] | Deresa, T. K. (2017). Role of Consumer Cooperative Society in Price Stability in the Case of Goh Consumer Cooperatives Benchi-Maji Zone, South West of Ethiopia. International Journal of Cooperative Studies, 6(1), 16–24. https://doi.org/10.11634/216826311706708 |
[4]
. The cause for the success and failures of cooperatives is breaking down of cooperative identities to carry the identity as their vision
| [14] | Hailu Zeleke, (2007). Insurance in Ethiopia: Historical Development, Present Status and Future Challenges. Addis Ababa: Master Printing Press, 1(1), P. 308. https://doi.org/10.20372/jbas.v1i1.4497 |
[14]
. This study was focus on determining some important factors of consumer cooperatives. Like – political, Bureaucracy, market, technology adoption, financial and infrastructure influence were practical problems that are frequently manifested in cooperative sectors. Therefore, the overall objective of the study is to assess the relationship between external factors and the success of cooperatives in Southwest Ethiopia with the following specific factors.
1) To determine how management skill and bureaucracy influence affect the success of consumer cooperatives in southwest Ethiopia.
2) To examine how technology and infrastructures affect the success of consumer cooperatives in southwest Ethiopia.
3) To determine how market and finance influence affect the success of consumer cooperatives in southwest Ethiopia.
4) To examine how political influence affects the success of consumer cooperatives in southwest Ethiopia.
5) To identify challenges to consumer cooperatives success in southwest Ethiopia.
2. Empirical Literature Review and Hypotheses Development
2.1. Management Skill
Cooperative management is an essential ingredient to the success or failure of cooperatives. For cooperatives to be a success they should be organized on really homogenous interest
. Literature disclosed that the management of cooperatives is instrumental in making them succeed or fail. Indicators, such as strong finance, good revenues, and capacity in marketing, business planning and management lead to the well-being of cooperatives
| [16] | Elena Garnevska Guozhong Liu Nicola M. Shadbolt, (2011). Factors for Successful Development of Farmer cooperatives in Northwest China, The International Food and Agribusiness Management Review 14(4) 1-18. https://doi.org/10.22004/ag.econ.117603 |
[16].
Leaders' and officials ‘abilities ought to be built upon and developed, to improve their efficiency and effectiveness that interprets to increased performance of the society. This enhancement of their managerial skills can be achieved through training
It additionally, involves investing in people to allow them to perform well and empower them to form use of their natural skills. Members as the user-owner and controller of the co-operative institution should be able to own their co-operative, have a strong attitude towards their institution and readiness to involve in democratic management
| [17] | Jared Matabi Wilson metto Esther Gicheru Kirianki M'Imanyara, (2022). Towards Co-operative Identity I: Re-Visiting the Co- operative Epistemology for Business Modeling Framework. Journal of Business and Management 24(5): 35-56 https://doi.org/10.9790/487X-2405043556 |
[17]
.
H1: Management skills have a positive and significant effect on the success of consumer cooperatives.
2.2. Politics
According to Smith viewed a cooperative enterprise is a business owned and controlled by the people who use its services
| [9] | Smith, T. A. (2016). Factors Influencing Growth Of Saving And Credit Cooperative Societies In Kenya: A Case Study Of Kajiado East Sub County. August. Stevens, M. H. H. (2010). Book Review: A Primer of Ecology with R. Journal of Statistical Software, 32(BR-3). http://www.jstatsoft.org/v32/b03 |
[9]
. There should be diversification of the cooperative business to increase its reserve; Management ought to be a lot more serious in handling the affairs of the society
. Government positive involvement is critical for the success or failure of cooperatives
| [26] | Darrell Hammond, John Luiz, (2016). The co-operative model as a means of stakeholder management: an exploratory qualitative analysis. South African journal of economic and management sciences, 19(4), 1537. http://dx.doi.org/10.4102/sajems.v19i4.1537 |
[26]
. Governments’ part should be to ensure that political, legal and administrative platforms are in place to help cooperatives develop
| [26] | Darrell Hammond, John Luiz, (2016). The co-operative model as a means of stakeholder management: an exploratory qualitative analysis. South African journal of economic and management sciences, 19(4), 1537. http://dx.doi.org/10.4102/sajems.v19i4.1537 |
[26]
. Therefore, cooperation with different partners can be crucial just in case there is no interference in cooperative businesses
| [26] | Darrell Hammond, John Luiz, (2016). The co-operative model as a means of stakeholder management: an exploratory qualitative analysis. South African journal of economic and management sciences, 19(4), 1537. http://dx.doi.org/10.4102/sajems.v19i4.1537 |
[26]
.
H2. Political influence has a negative and significant effect on the success of consumer cooperatives.
2.3. Bureaucracy
According to the literature, it can be stated that bureaucracy may be obstructive as well as effective and it is not true to maintain it at a very strict or very slight level. While Craing thinks that in Japan bureaucracy supports innovation and provides faster production
. Yılmaz pointed out that Hall and Weber's bureaucracy approaches have the same bureaucratic features in Turkey as in Western countries; and that Hall and Weber's theories of bureaucracy are useful and effective tools for examining the school organization structure in Turkey
. An effective school structure provides cooperation among teachers, and teachers help and support each other in solving the problems they face during professional practice
| [21] | Akpinar, S. and Bayhan, G. M. (2011). A Hybrid Genetic Algorithm for Mixed-Model Assembly Line Balancing Problem with Parallel Workstations and Zoning Constraints. Engineering Applications of Artificial Intelligence, 24, 449-457. http://dx.doi.org/10.1016/j.engappai.2010.08.006 |
[21]
. Hoy and Sweet land explained that although there is a widespread view that bureaucracy constitutes negativities regarding employees of the organization, it offers positive sides, and different kinds of structures can be formed based on the level of formalization and centralization
.
H3: Bureaucracy has a negative and significant effect on the success of consumer cooperatives.
2.4. Technology
Failure to develop and integrate technology strategy and business strategy may be a major contributing issue to the decline of a firm‘s competitiveness
| [12] | Muhammad, N. M. N., Jantan, M., & Keong, C. C. (2014). Technology Strategy and Firm‘s Revenue Growth: Empirical Evidence of Malaysian Industrial Automation Industry. International Journal of Business and Management, 3(7), 97–106. https://doi.org/10.5539/ijbm.v3n7p97 |
[12]
. As Simotwo explained technology is formed from discoveries in sciences, development, and improvement in machinery, process, automation, and information technology
| [8] | Simotwo, P. (2017). Differentiation Strategies And Member Satisfaction In Kenya Police Savings And Credit Co-Operative Society. International Journal of Social Science and Economic Research, 2(8), 4088–4102. ISSN: 2455-8834. |
[8]
. Similarly observes that the speed of technology adoption and its overall application in co-operatives within the region is mostly low and the reasons for this include conservatism, prices, and ignorance
| [8] | Simotwo, P. (2017). Differentiation Strategies And Member Satisfaction In Kenya Police Savings And Credit Co-Operative Society. International Journal of Social Science and Economic Research, 2(8), 4088–4102. ISSN: 2455-8834. |
[8]
.
H4: Technology has a positive and significant effect on the success of consumer cooperatives.
2.5. Marketing
Modern marketing practices require a lot of information adequately, accurately and speedily to make informed decisions about the market situation. A common weakness in the business owner/ managers or cooperatives members lies in their failure to understand key marketing issues Stokes and Wilson assessed the overall success features of SACCOS work differently than those of primary Agricultural Marketing Co-operative Societies
| [17] | Jared Matabi Wilson metto Esther Gicheru Kirianki M'Imanyara, (2022). Towards Co-operative Identity I: Re-Visiting the Co- operative Epistemology for Business Modeling Framework. Journal of Business and Management 24(5): 35-56 https://doi.org/10.9790/487X-2405043556 |
[17]
.
H6: marketing has a positive and significant effect on the success of consumer cooperatives.
2.6. Finance
Adequate capital is one of the fundamental requisites for the sound business operation of cooperatives business. Since the cooperative exists to deliver benefits to its members, each member should contribute to capital in direct proportion to usage of services the cooperative provides
| [22] | Birhanu, Z. (2011). Ethno-Botanical Survey on Medicinal Plants Used by Ethnic Groups of Denbia District, North-Western Ethiopia. Journal of Natural Remedies, 11, 119-123. http://dx.doi.org/10.18311/jnr/2011/435 |
[22]
. Know a day cooperatives faces crisis of capital, crisis of believability and crisis of management
. Adequate capital, technical support, co-operative arrangement and government support as the important factors in workers’ co-operatives
| [25] | Corcoran, H., & Wilson, D. (2010a). The worker co-operative movements in Italy, Mondragon and France: Context, success factors and lessons: Canadian Worker Cooperative Federation Calgary, Alberta. http://www.canadianworker.coop/sites/ |
[25]
.
H5: Finance has positive and significant effect on success of consumer cooperatives.
2.7. Infrastructure Influence
Adequate infrastructure facilities like roads, transportation, water, electricity, telephone, etc., more cooperatives would be motivated to perform their work and so this positively contributes to enhancing their success. Infrastructure is the major factor for cooperatives success power; transport and communication are its key elements. It matters a lot for the competitiveness of cooperatives. Acquiring information, input procurement and getting market requires more resources of the cooperatives in countries with poor infrastructures
. There is a lack of access to infrastructure facilities like roads, water, electricity, telephone, etc. This influence cooperative would be to success and significant effect and positive contribution to promoting cooperatives success.
H7: infrastructure has a positive and significant effect on the success of consumer cooperatives.
2.8. Conceptual Framework
Figure 1. Conceptual framework.
H1: Management skills have a positive and significant effect on the success of consumer cooperatives
H2: Political influence has a negative and significant effect on the success of consumer cooperatives
H3: Bureaucracy has a negative and insignificant effect on the success of consumer cooperatives
H4: Technology has a positive and insignificant effect on the success of consumer cooperatives
H5: Marketing has a positive and significant effect on the success of consumer cooperatives
H6: Finance has a positive and insignificant effect on the success of consumer cooperatives
H7: Infrastructure has a positive and significant effect on the success of consumer cooperatives
3. Material and Methods
Explanatory type of research method was designed. Explanatory identifies causal factors and outcome of target phenomena
| [3] | Biset Amene, T., & Yadessa, A. (2018). Determinants Of Multi-Purpose Primary Cooperatives Marketing Performance In The Case Of West Hararghe Zone, Ethiopia. International Journal of Business and Management Invention (IJBMI) ISSN, 7(October), 11–32. www.ijbmi.org |
[3]
. These are cooperatives with known addresses or contact and membership, as provided by the DCO in the southwest hence, the total population of the study was 10,567. In the first stage, seven woredas are selected from each zones purposely due to the high number of cooperatives they have, out of fourteen (14) woredas that have cooperative associations engaged in consumer cooperatives in three zones. In the second stage, considering the total number of fifty-one (51) consumer cooperatives in these woredas (twenty-nine in Bench Sheko fifteen in Sheka and 7 in west omo) a total of seventeen (17) consumer cooperatives were randomly selected by lottery method. Finally, a total of three hundred eighty-five (385) respondents involving cooperative members, cooperative committees and recruited staff were selected randomly using probability proportional to sample size (PPS). Using the Yemane formula (1961) the sample size is computed as follows.
=385
Model Specification
Multiple regressions would be used to determine the nature of the relationship between the independent variables and the dependent variable
| [2] | Azmah, O., Fatimah, K., Rohana, & Rosita, H. (2012). Factors Influencing Cooperative Membership and Share Increment: An Application of the Logistic Regression Analysis in the Malaysian Cooperatives. World Review of Business Research, 2(5), 24–35. URL: http://www.wrbrpapers.com/ |
[2]
. Political, management skills, bureaucracy, technology, marketing, financing and infrastructure are assumed as independent variables. The success of consumer cooperatives is assumed a dependent variable. And they measured by using a Likert scale measurement base.
Regression analysis was done by the utilization of an econometric model:
Y=α+β1PI1+β2MSI+β3BI+β4TI+β5MI+β6FI+β7II----------------------------ε
Where: Y= is the dependent variable indicating the success of the consumer cooperative.
α= may be a constant term for the worth of Y when all Xs are zero
SCC is the success of consumer cooperatives and PI is political influence, MSI is management skill influence BI is bureaucracy influence, TI is technological influence, MI is marketing influence, FI is financial influence and II is infrastructural influence. ε = is the random error term accounting for all other factors not captured within the model.
4. Result and Discussions
4.1. Descriptive Analysis
Table 1 shows there is the highest mean value was gained for the political issues this implies the success of consumer cooperatives is affected by political issues at the mean and standard divisions = 4.22, 1.371 respectively. Management skill has an effect explained variable at mean value and standard division 4.13, 0.927 respectively. For bureaucracy, issues do not affect the success of consumer cooperatives at the mean and standard division values of 1.07 and 1.009 respectively. Technology, marketing, financing and infrastructure also have an effect on success of consumer cooperatives at mean value and standard deviations (4.38 and 0.933, 3.56 and.933, 4.18 and.976, and 2.39 and 1.576 respectively.
Table 1. Descriptive analysis.
Political influence | N | Minimum | Maximum | Mean | Std. Deviation |
Poletical influence | 385 | 1 | 5 | 4.83 | .871 |
Management skill influence | 385 | 1 | 4 | 4.13 | .927 |
Beraoucracy influence | 385 | 1 | 5 | 1.07 | 1.009 |
Technological influence | 385 | 1 | 4 | 4.38 | .946 |
Marketing influence | 385 | 1 | 4 | 3.56 | .933 |
Finacing influence | 385 | 1 | 4 | 4.18 | .976 |
Infrastracture influence | 385 | 1 | 4 | 2.39 | 1.576 |
Source SPSS output
4.2. Correlation Result
As displayed from the correlations analysis table infrastructure and, technology, political and Bureaucracy management skill and bureaucracy, management skill and marketing factors are positively correlated (r= 0.534, 0.278, 0.278, 0.67) respectively. Marketing and management skill factors and financial and marketing factors were negatively correlated (r=-0.048,-0.260) respectively.
Table 2. Correlation.
Model | II | TI | PI | BI | MS | MI | FI |
1 | II | 1.000 | .534 | -.277 | -.005 | .664 | -.394 | -.571 |
| TI | .534 | 1.000 | .278 | .378 | .297 | -.816 | -.035 |
| PI | -.277 | .278 | 1.000 | .278 | -.516 | -.569 | .838 |
| BI | -.005 | .378 | .278 | 1.000 | .367 | -.351 | .097 |
| MS | .664 | .297 | -.516 | .367 | 1.000 | -.048 | -.630 |
| MI | -.394 | -.816 | -.569 | -.351 | -.048 | 1.000 | -.260 |
| FI | -.571 | -.035 | .838 | .097 | -.630 | -.260 | 1.000 |
Source: SPSS out put
4.3. Regression Result and Discussions
Table 3. Regression Analysis.
Model | Unstandardized Coefficients | Standardized Coefficients | T | Sig. | 95.0% Confidence Interval for B |
B | Std. Error | Beta | Lower Bound | Upper Bound |
1 | (Constant) | -9.874 | 2.021 | | -4.886 | .000 | -13.847 | -5.900 |
PI | -.467 | .048 | -.257 | 9.699 | .000 | .372 | .562 |
TI | .865 | .058 | .267 | 14.959 | .000 | .752 | .979 |
MS | .474 | .066 | .154 | 7.208 | .000 | .345 | .603 |
BI | .658 | .061 | -.171 | -10.728 | .124 | -.778 | -.537 |
MI | 3.156 | .091 | -.737 | -34.560 | .000 | -3.336 | -2.977 |
FI | .204 | .057 | -.085 | -3.606 | .000 | -.316 | -.093 |
II | 5.386 | .078 | 1.512 | 68.997 | .061 | 5.233 | 5.540 |
Dependent Variable: SCC
Source: SPSS out put
The regression result shows a negative coefficient association between political influence and the success of consumer cooperatives at a significant level p-value = 0.01 with mean and standard division -.467 and 0.048 respectively. This implies a 1% increase in political influence resulted in a -.467 decrease in the success of consumer cooperatives. Thus, the hypothesis that states political issue has a negative effect on the success of consumer cooperatives in South West Ethiopia is accepted.
The regression result shows there is a positive association between technology adaption and the success of consumer cooperatives. Technology issues affected the success of consumer cooperatives at a significant p-value = 0.01 level with a mean value of 0.865. This implies a 1% increase in technology influence resulted in a 0.865% increase in the achievement of consumer cooperatives. Thus, the hypothesis that states technology issue has a positive and insignificant effect on the success of consumer cooperatives in South West Ethiopia is accepted. This study was supported by Simotwo who observed the speed of technology adoption and its overall application in co-operatives within the region is mostly low
| [8] | Simotwo, P. (2017). Differentiation Strategies And Member Satisfaction In Kenya Police Savings And Credit Co-Operative Society. International Journal of Social Science and Economic Research, 2(8), 4088–4102. ISSN: 2455-8834. |
[8]
.
The regression result shows there is a positive association in between management skill influence and the success of consumer cooperatives. Management skill had an effect on the achievement of consumer cooperatives at a significant level p-value = 0.01 levels with a mean value of 0.474. This implies 1% increase in technology influence resulted in a 0.474% increase in the success of consumer cooperatives. Thus, the hypothesis states management skill has a positive and significant effect on the success of consumer cooperatives South West Ethiopia accepted. The result is consistent with
| [8] | Simotwo, P. (2017). Differentiation Strategies And Member Satisfaction In Kenya Police Savings And Credit Co-Operative Society. International Journal of Social Science and Economic Research, 2(8), 4088–4102. ISSN: 2455-8834. |
[8].
Study indicates that; know a day cooperatives a faces crisis of capital, a crisis of believability and a crisis of management.
The regression result shows there is a negative and insignificant relationship between bureaucracy issues and the success of consumer cooperatives. The bureaucracy issue had an effect on success of consumer cooperatives at a significant level above p 0.10 = Thus, the hypothesis states bureaucracy issue has a negative and significant effect on the success of consumer cooperatives in Southwest Ethiopia. Null hypothesis rejected.
The regression result shows market and finance factors had a positive coefficient association between and the success of consumer cooperatives. Market and finance factors affected the success of consumer cooperatives at a significant level p-value = 0.01 mean value 3.156 and 0.204 respectively. This implies a 1% increase in marketing and finance increase influence resulted in a 3.156% and.204% respectively increase in the success of consumer cooperatives. The hypothesis that states market and finance factors have a positive significant effect on the success of consumer cooperatives in Southwest Ethiopia was accepted. The result is consistent with
The study indicates that, know a day cooperatives face crises of capital, crises of believability and crisis of management.
The regression result shows a positive coefficient association between infrastructure and the success of consumer cooperatives. The regression result shows a negative coefficient association between infrastructure and the success of consumer cooperatives. This implies a 1% increase in infrastructure influence resulted in a 5.386% increase in the success of consumer cooperatives. Thus, the hypothesis states infrastructure issue has a negative insignificant effect on the success of consumer cooperatives of southwest Ethiopia rejected. The study supported as acquiring information, input procurement and getting market require more resources of the cooperatives in countries with poor infrastructures
.
4.4. Multiple Regression Model Results
Table 4. Model Summery.
Model | R | R Square | Adjusted R Square | Std. Error of the Estimate | Change Statistics |
R Square Change | F Change | df1 | df2 | Sig. F Change |
1 | .745a | .730 | .721. | 1.07633 | .730 | 1730.585 | 7 | 377 | .000 |
Source: SPSS output
Y=α+β1X1+β2X2+β3X3+β4X4+β5X5+β6X6+β7X7----------------------------ε
As shown in the model summary the R2 for the model is 0.735 about (73.5%) of variation in the success of consumer cooperatives was explained by the independent variables of this study. Hence, the change in the dependent variable is well explained by a change in the explainer variables of the model.
Table 5. ANOVA Result.
Model | Sum of Squares | Df | Mean Square | F | Sig. |
| Regression | 14033.946 | 7 | 2004.849 | 6.585 | .001b |
Residual | 436.747 | 377 | 1.158 | | |
Total | 14470.693 | 384 | | | |
Source: SPSS output
Table 5 presents the overall significance of the regression. The F value of 6.585 with a significance of 0.001 which is less than 10 percent significance level (0.1 %< 10%). This means that the variation described by this model is appropriate and not occurred by chance. Hence the regression is significant and a linear relationship exists between variables.
4.5. Classical Linear Regression Model Assumption (CLRMA)
Assumption 1: The Mean of the Disturbances is Zero (E (ε) = 0)
The mean of disturbances will always be zero provided that there is a continual term in the regression. If a constant term is included in the regression equation, this assumption will never be violated. Hence, in the model of this study, a constant term is included. As a result, this assumption was not violated.
Assumption 2: Multicollinearity Test
As shown in the table below accordingly, all correlation results are below 0.9, which indicates that multicollinearity is not a potential problem for this study.
Table 6. Culinary Statics.
Tolerance | VIF |
.114 | 8.748 |
.251 | 3.989 |
.176 | 5.678 |
.314 | 3.186 |
.176 | 5.679 |
.145 | 6.875 |
.167 | 5.997 |
Source: SPSS output
Assumption 3: Covariance between the Error Terms over Time is Zero
Table 7. Durbin – Watson statistics.
Model | R | R Square | Adjusted R Square | Std. Error of the Estimate | Change Statistics | Durbin-Watson |
R Square Change | F Change | df1 | df2 | Sig. F Change |
1 | .985 | .730 | .721 | 1.07633 | .970 | 1730.585 | 7 | 377 | .000 | 2.38 |
This assumption test will be conducted when the errors are linearly independent of one another, it would be stated that they are correlated (serially correlated). Hence the Durbin Watson statistics (D-W stat) shows from the regression result 2.38 which is nearer to 2 there is no evidence for the presence of autocorrelation books (2008) Source: SPSS output.
Assumption 4: Homoscedasticity test
Homoscedasticity can be checked by visual examination of a plot of the standardized residuals by the regression standardized predicted value (Osborne & Waters, 2003). If the error terms are distributed randomly with no certain pattern, the problem is not detrimental to analysis. The scatterplot in Figure below shows that the standardized residuals in this research are distributed evenly which shows that no violation of homoscedasticity.
Assumption 5: Normality Test (Errors are Normally Distributed)
This test is performed to confirm the assumption of CLRM which states that the disturbances terms are normally distributed.
5. Conclusions and Recommendations
5.1. Conclusions
The paper has found that the studied consumer cooperatives have members who are politicians, as well as the interference of political persons, has highly affected the success of consumer cooperatives of south west Ethiopia. It shows there is political influence on the decisions and other activities of the consumer cooperatives in south west Ethiopia.
Most consumer cooperatives currently have computer software and hardware in their office for various activities of the cooperatives. However, the results also confirmed that these consumer cooperatives have no access to internet service at all.
Regarding computerization and other technological adoptions progresses the excellence of work in the consumer cooperative and technology-related encounter distress the accomplishment of consumer cooperative in a pronounced way.
The finding shows staff preparing in administration improves the accomplishment of the consumer cooperative and lack of co-operative training in management skills to society officials leads to mismanagement of the consumer cooperative. The descriptive result also showed that consumer cooperative is not offering standardized predetermined services for customers. Bureaucracy has not effect consumer cooperatives.
The management works individually and is not compact with teamwork in carrying out management tasks. Management as teamwork requires the ability to work together, both with fellow members of the management and with other parties. In addition to the inability to work together, administrators do have not adequate levels of education and organizational experience. Education and experience can improve one's knowledge and skills. Included educational factors because through education the insights of management knowledge and skills became wider and had a mindset that could encourage the development of cooperatives.
Consumer cooperatives are successful in providing fairness in the prices of goods and services for their customers. The studies show cooperatives have problems such as a lack of adequate products based on their customers ‘needs, and a lack of timelines of supply of basic goods and services.
Consumer cooperatives in the study area affected by different factors related to resources, infrastructure and administration which have an impact on customer satisfaction. As indicated in the findings infrastructure played a decisive role in achieving better performance due to the perishable nature of consumable goods supplied by consumer cooperatives convenient distribution center/working area was major factor that affect consumer cooperatives. The second most important issue that needs to be addressed in consumer cooperatives were resource factors, such as the inadequate source of capital, lack of skilled manpower and lack of technical know-how to manger cooperatives. From all items, an inadequate source of capital is the major issue that needs to be resolved and has an impact on performance of consumer cooperatives.
5.2. Recommendations
To improve the success of consumer cooperatives in economic and social empowerment, Southwest Ethiopia must have to re-organize all failed cooperatives and must provide loans to them, to keep marketing stability at all seasons and carry out awareness creation as a safe way to help members for inflation which happen in the area.
The management should compact with teamwork in carrying out management tasks. Management as teamwork requires the ability to work together, both with fellow members of the management and with other parties. Administrators need adequate levels of education and organizational experience. Education and experience can improve one's knowledge and skills. Experience is an understanding of a work that is lived by someone so that they acquire knowledge, skills or attitudes that are integrated with the person concerned.
The factors that prevent the success of consumer cooperative need an important task to avoid that improvement to the economic status must develop, lagging technological advance and political interference are the main factor that hinders the development of the cooperatives in the study area. Therefore, southwest Ethiopia cooperative administrators should solve these challenges by setting goals and strategies.
Abbreviations
ICA | International Cooperatives Aliens |
IOL | International Labor Organization |
Conflicts of Interest
The authors declare no conflicts of interest.
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Cite This Article
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ACS Style
Wodajo, S.; Haile, W. Factors That Affect the Success of Consumer Cooperatives in Case of Bench Sheko, West Omo and Sheka Zones Ethiopia. J. Bus. Econ. Dev. 2024, 9(3), 59-68. doi: 10.11648/j.jbed.20240903.12
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Wodajo S, Haile W. Factors That Affect the Success of Consumer Cooperatives in Case of Bench Sheko, West Omo and Sheka Zones Ethiopia. J Bus Econ Dev. 2024;9(3):59-68. doi: 10.11648/j.jbed.20240903.12
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@article{10.11648/j.jbed.20240903.12,
author = {Sitotaw Wodajo and Worku Haile},
title = {Factors That Affect the Success of Consumer Cooperatives in Case of Bench Sheko, West Omo and Sheka Zones Ethiopia
},
journal = {Journal of Business and Economic Development},
volume = {9},
number = {3},
pages = {59-68},
doi = {10.11648/j.jbed.20240903.12},
url = {https://doi.org/10.11648/j.jbed.20240903.12},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jbed.20240903.12},
abstract = {The study aimed to identify external challenges that influence the success of consumer cooperatives in the case of southwest Ethiopia. An explanatory type of research design method was applied. The study was focused on seventeen (17) selected active consumer cooperatives in southwest Ethiopia. A three-stage random sampling procedure was adopted for the selection of the sample respondents. In stage one, seven woredas were selected from each zone proportionately. In stage two, from those woredas 17 sample consumer cooperatives were selected. Finally, 385 samples of respondents were selected by simple random method. Political, Technology, Management, Bureaucracy, Marketing, Finance and Infrastructure influence were selected as independent factors. Successes of consumer cooperatives were identified as the dependent variable for this study. The finding reveals variables like politics, management, marketing and finance are important factors that affect significantly the target variables. Factor bureaucracy had no significant influence on dependent variables. The study suggests giving special attention given on problems like lack of marketing and finance access shortage, lagging technological advances and political interference. Therefore, Bench Sheko, Sheka and West Omo zones should solve these challenges.
},
year = {2024}
}
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TY - JOUR
T1 - Factors That Affect the Success of Consumer Cooperatives in Case of Bench Sheko, West Omo and Sheka Zones Ethiopia
AU - Sitotaw Wodajo
AU - Worku Haile
Y1 - 2024/07/29
PY - 2024
N1 - https://doi.org/10.11648/j.jbed.20240903.12
DO - 10.11648/j.jbed.20240903.12
T2 - Journal of Business and Economic Development
JF - Journal of Business and Economic Development
JO - Journal of Business and Economic Development
SP - 59
EP - 68
PB - Science Publishing Group
SN - 2637-3874
UR - https://doi.org/10.11648/j.jbed.20240903.12
AB - The study aimed to identify external challenges that influence the success of consumer cooperatives in the case of southwest Ethiopia. An explanatory type of research design method was applied. The study was focused on seventeen (17) selected active consumer cooperatives in southwest Ethiopia. A three-stage random sampling procedure was adopted for the selection of the sample respondents. In stage one, seven woredas were selected from each zone proportionately. In stage two, from those woredas 17 sample consumer cooperatives were selected. Finally, 385 samples of respondents were selected by simple random method. Political, Technology, Management, Bureaucracy, Marketing, Finance and Infrastructure influence were selected as independent factors. Successes of consumer cooperatives were identified as the dependent variable for this study. The finding reveals variables like politics, management, marketing and finance are important factors that affect significantly the target variables. Factor bureaucracy had no significant influence on dependent variables. The study suggests giving special attention given on problems like lack of marketing and finance access shortage, lagging technological advances and political interference. Therefore, Bench Sheko, Sheka and West Omo zones should solve these challenges.
VL - 9
IS - 3
ER -
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