Management Methods in Multi-Purpose Co-Operative Societies

Management Methods in Multi-Purpose Co-Operative Societies

In presenting this review, I restricted the literature to the available material I could lay hand on during the period of my work.

Thus, the review of related literature was based on the following:

1. Field of activities that the Anammco workers multipurpose co-operative is engaged in.
   2. The activities and objective for establishing the Anammco worker’s multipurpose cooperative society.
   3. The mode of operation and management of the Anammco worker’s multi-purpose.

• FIELD OF ACTIVITIES UNDERTAKEN BY THE ANAMMCO WORKER’S MULTI-PURPOSE CO-OPERATIVE SOCIETY LTD.

As is indicated from its name, multi-purpose societies engage in all types of business thereby performing more than one function to her members. They can engage in production, offer credit to their members and market their product (Okechukwu, 2001:52). According to S.Chukwu (1990:20), a multipurpose co-operative societies as compare to a single purpose cooperative societies is one which has more than one field of activity.

Anammco worker’s multi-purpose society is engaged in two major field of activities.

1. Credit and thrift savings.
2. Operating a consumer co-operative shop.

2.1.1     CREDIT AND THRIFT SAVINGS.

Credit and thrift co-operatives are one of the most important, if not the most important of all co-operatives. Economics taught us that human and needs are numerous but means of accomplishing them are very scarce.

As a means of providing fund for the operation of the society on the continuous basis, members are often encouraged to save some little amounts on regular basis. Such saving provide some easy and painless method of accumulating capital over a period of time to society.

A member can only withdraw thrift savings for productive purpose (OSITA OBODOECHI 2002, 336). The following are reasons why Anammco multipurpose co-operative society encourage credit and thrift savings.

1. Workers need to save
2. Workers need to borrow

• Workers need to invest their savings.

2.1.1.1     WORKERS NEED TO SAVE

Promotion of thrift is the main factor of credit co-operative, people, regardless of how low their income are capable of saving a part or small amounts of their earning. A credit co-operative is a safe and profitable saving institution. It encourage saving by making people realize the economic and social benefits of thrift and the disadvantages of excessive and unproductive expenditure (BUDEN, 2002: 62)

• WORKERS NEED TO BORROW.

A very little investigation of the conditions of the salary saving classes is frequently enough to reason that when sudden emergencies arise which make an unexpected demand on their salaries; they have to borrow and they do so on most unfavourable terms; and that as a class, they are heavily and in some cases hopelessly indebted. A debt is a well known source of inefficiency and frequency source of dishonesty; it is worthwhile to see whether cooperative can furnish a remedy (CEMPBELL, 1951: 95).   In Nigeria, a working class person finds it extremely difficult to borrow but a credit cooperative organization gives the members a chance of doing so on a favourable and convenient term(s) without facing the high interest rate charged by financial institution.

• WORKER NEED TO INVEST THEIR SAVINGS

With this in mind, the condition of the salaried earner today has to do with the type of co-operative he/she joins as a member such as cooperative has to weld to his/her membership, in terms of reasonable savings, real investment, serious deposits, access to ownership of property and finally adequate preparation for retirement, which is wiser, richer and sooner because of the co-operative effect.

(OBODOECHI 2002, 127).

The co-operative effect can generally be said to be that degree of extra satisfaction which a member derives as a result of participating in the co-operative as compared to working alone (Chukwu 1990: 24).

• OPERATING A CONSUMER’S CO-OPERATIVE SHOP

If member’s of a society are consumer’s of house-hold items (especially food provisions) which they seek to obtain co-operative, then their co-operative is classified as consumer’s co-operative (Chukwu, 1990:20).

The prime objective of the members for stocking all sorts of consumer goods. Direct supply is obtained from the producer’s short-circuiting the middlemen.

In addition to the advantage of economics of large scale purchase the members customers are sure of high quality unadulterated goods at very reasonable price. If the shop is well managed, the members can draw huge patronage dividends at a rate between 8% and 10% of their total purchase in the shop.

They society succeeds if members make it a point of duty to make all purchases for themselves and their families, from the cooperative shop. All purchases will be entered in the member’s ledger.

However, such societies are more difficult and complex to organize. The member’s contribute to the collapse of this type of society by their credit purchase, which tie up the society capital and make it impossible for the shop to grow. Members sometime fail to patronize the shop. Very often there is dishonest on the part of the officers of the society, the employees and outsiders. Because of the existence of many retail shops now which help to beat down the piece commodities, operating a consumer’s co-operative shop are no longer fashionable except for organized sector like the armed forces, police, workers and students. (OKECHUKWU, 2001:50).

• THE OBJECTIVE AND ACTIVITIES OF THE ANAMMCO WORKERS MULTIPURPOSE CO-OPERATIVE SOCIETY.

The Anammco worker’s multipurpose cooperative society is a worker-member co-operative society.

However, from statistics available to the Enugu North local government cooperative division the society has a total membership of 748 workers. If was established on the 30^th of July 1987.   Based on the statutory section of the constitution of the society, they enumerated the following as their basic objectives and activities.

1. Economic activities for meeting needs.
2. Participatory democracy

• Human resource development

1. Social responsibility
2. National and International economic cooperation.

• ECONOMIC ACTIVITIES FOR MEETING THE NEEDS OF ANAMMCO WORKER’S MULTI-PURPOSE CO-OPERATIVE SOCIETY LTD.

This is fully committed to the satisfaction of the economic well being of members. This has always been their main orientation, and the emphasis of need is what give a significance to the idea of cooperation. This includes:

1. Thrift saving and credit
2. Buying and selling of essential consumer goods at a moderate price.

• PARTICIPATORY DEMOCRACY

This highlights the fundamental cooperative role of contributing to democratic relations between people and serving as an instrument of economic democracy. The great emphasis on his objective by the Anammco worker’s M.C.S Ltd is to portray their stance on full member participation rather than on capital. This is to enable members participate fully in their society and also express view as to the running and working of the society.

• HUMAN RESOURCE DEVELOPMENT

This objective is also as important as the basic objective of the cooperative movements goal of increasing people’s human dignity and giving them a voice individually and collectively – in influencing their living condition and communities. This also implies that the cooperative way is based on people working together for their general good and not on exploiting each other. Most times, the society is consulted by the personnel management division of the company on issues involving human resource development, they also portray the well being of their member’s as matter’s affecting the entire establishment.

• SOCIAL RESPONSIBILITY

This is found or embedded in the very motives for co-operative formation. Groups of people establish in order to take on the responsibility for their own condition and for the community at large.

This sense of social responsibility has always been reflected in basic co-operative policies. In the light of the private market economy which will likely continue for a very long time, it is more important to have organization that are able to articulate and provide the needs of the weaker parts of the population.

To this, the Anammco worker’s M.C.S Ltd donates food items and clothing’s to the less privileged on Easter and Christmas yearly.

• Cheshire home (Emene)
• Motherless Babies home
• Red Cross house

• NATIONAL AND INTERNATIONAL ECONOMIC CO-OPERATION.

This is the future expansion of the world-wide co-operative movement.   For Economic cooperative, Anammco worker’s M.C..S Ltd associated to the Enugu consumer co-operative under the auspices and direction of the Enugu North co-operative division, the hierarchy continue up to the Apex co-operative body.

• THE MODE OF OPERATION AND MANAGEMENT OF THE ANAMMCO WORKER’S MULTI-PURPOSE CO-OPERATIVE SOCIETY LTD.

In recent years, cooperatives in different sectors and in different part of Nigeria, particularly those with a large membership have experienced various problem including management control, mismanagement, growing distance between members and their cooperative, failures of democracy, financial scandals and imbalanced relationships between senior management and elected direction. Their experiences appear to be common and therefore, for all cooperative, there are valuable lessons to be learned and dangers to be avoided. Hence the needs which leads to the formation are thus, very different and subsequently, does not bring cooperative objective to life in the same way that the participation of employees in the administrative of the co-operative but does so in other co-operatives.

In trial with this purpose, the management system of Anammco worker’s M.C.S Ltd is purely on democratic principles. In each system, the management is revolved yearning thus, making it a “no-man’s office”.

Any member of the society can be of the management organ, as far as he/she pay his/her monthly dues and other contributions required for him or her in the due process of running the society. In other word, “No matter how large or how small a society is, if the management is not clearly understood, problems and confusion will inevitably result”. (Lilian 2003. 102). Hence, in the management system of Anammco worker’s M.C.S Ltd, it is made clear that the members role is exercised essential through the general meeting sited annually or specially. In exceptional circumstance, members may exercise their responsibilities in the absence of action by the committee by requesting a special general meeting.

Normally, the rules of the ordinary member are performed through the general meeting and equally in normal circumstances.

This function is carried out without problems. Basically, there are (4) essential responsibilities to be attended to by the members at the Annual general meeting they are:

1. The receipts and adoption of the report and accounts.
2. The appointment of member’s to the committee.
3. The appointment of an auditor.
4. The determination of the borrowing power of the society.

The committee’s function is to interpret the policies as determined by the general meeting. In doing this, the committee is required to elaborate in more detail, the way in which one policy of the co-operative should be implemented. The committee is required to establish guidelines for the management and to ensure that management adheres strictly to those guidelines. (A.C.Amahalu 2005, 133).

The committee is the management of a cooperative society and the rule provide that “the committee shall meet as often as the business of the registered society may require and in any case not less frequently than once a month. Where committee meeting are not a fixed day and time agreed by the committee, the secretary shall summon meeting in writing”. Rule 26 C1).

Rule 27(1) of the cooperative societies rule specifies some functions of the committee as follows:-

“The committee shall represent the registered society before all competent public authorities and in all dealings and transactions with their person, with power to institute and suit brought in name of or against the society, and in general it shall carry out such duties in the management of the affairs of the registered society except those rescued for the general meeting and subject to any transaction or restriction duty laid down by the society in a general meeting or in the bye-laws”.

Some other duties of the committee according to rule 27 (2) includes:-

1. To ensure compliance with the law, rule and bye-laws of the society.
2. To maintain true accounts and a true account of the society’s assets and liabilities.
3. To present to the annual general meeting an annual report and accounts approved by the Director of Co-operatives.
4. To assist the inspection and auditing of books of the society by any person authorized to inspect and audit the books annually.
5. To take adequate measure for the safe custody and maintenance of the society’s money, stocks and property.
6. To ensure that money is not borrowed in excess of the society’s maximum liability and that money is not lent to members in excess of their maximum credit limits and,
7. To take prompt action to put right, fault pointed out in the audit reports, Director’s audit comment or inspection reports.

In conducting the affairs of the society, the committee shall exercise prudence and diligence of ordinary men of business. Members of the committee may be held responsible for any lapses discovered in the conduct of the affairs of the society (Rule 27(3).

The role of the management is to see to the oversee functioning of the society that is, to say that the management of the society, has to make sure that all activities and function undertaken by the society are carried out properly and all member’s of the society contribute, to their best ability, to the running of the society. Although there is the primary responsibility of the officers, that is, the chairman and secretary, to ensure that the annual audit are completed and filed. The position of manager of Anammco worker’s multipurpose co-operative society Ltd is in reality clear and simply that of implementing to the best of his ability. The policy decision of the committee. In general terms, he must within the conditions of carrying that committee policies, also ensure that adequate accounting records are kept, that sufficient information is compiled on the bank account within the limits prescribed by the Annual General Meeting; failure to act properly under any of these heading does not exonerate the committee from responsibility to ensure that these matters are properly dealt with.

In another sense too, committee members have an obligation to protect the society against potential liability or loss. Responsibility for the day-to-day management rests on both the society’s committee and its management committee.

Members of the committee and individuals have legal responsibilities for seeing that the firm complies with the law. They are also accountable to the member who elected them and they follow any directions as laid down at the general meeting.

If the members are not satisfied with the performance of the management committee, the members cannot take over the management, but can dismiss any or all of the committees or directors and elect or appoint others to replace them. (ONUOHA, 1995, 23).

This article was extracted from a Project Research Work Topic

“AN APPRAISAL OF THE ACTIVITIES AND MANAGEMENT METHODS OF ANAMMCO WORKERS MULTI-PURPOSE CO-OPERATIVE SOCIETY ENUGU”