Why Cooperatives fail?

Abe Belina, a writer of the The Filipino Entrepreneur jotted down some of the reason why cooperatives in the Philippines fail. Cooperatives or coop in the common term is a group of people who have set up their own enterprise for their common good in which people is a common element. Though many studies attempt to find out the reasons why coops fail, Belina pointed these ideas:

Reason #1. Lack of Education
The so-called experts in the Philippines are well-versed on western type of cooperatives but know little of the homegrown types. They tried to implant this idea to Philippine soil but the rural people are so illiterate to understand modern ideas because they have their own homegrown coops. However, as years pass by, many colleges and universities offered cooperative management but they failed to introduce cooperativism the Philippine style. With the emergence of some coop advocates, cooperative development are being taught but to only few specialized schools.

Reason #2. Lack of Management Expertise
The only way a person could learn how to run a coop is to do so using a trial and error approach. Belina pointed out that at the moment he masters all of the skills needed to run a coop, he will get offer from giant companies which are willing to pay three or four times his pay.

Reason #3. Most Coops Don’t Really Serve Their Members
The most important measures of success of any cooperative is the service it gives to its members. Evidence shows that coops that serve their members well grow to become highly viable.

Reason #4. Government Meddling
Overnight experts from the government sector have gone on organizing without taking into consideration that coops are voluntary associations. Government meddling is not only confined to organizing. Bilena stressed that government official’s limited the activities of privately initiated coops hovering above the economic enterprise of the coop leaving big business alone.

But those who have tried to hurdle the barriers swear that coops do work.

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