P a g e | 1CHAPTER 1INTRODUCTIONBackground of the StudyCooperative Development Authority as cited by Turingan (1995), found outthat some of the reasons for the failure of cooperatives were lack of educationand training, and inadequate information and practical know-how on theprinciples, nature and operations of the cooperative organization which led toincompetent management.Poor performance has led to members’ withdrawal from somecooperatives. Failure to save and repay loans is also an indicator of poorlyperforming cooperatives in the Sub County. This can be attributed toorganizational and leadership challenges, difficult operating environment andinability to adapt to changing socio-economic environment, including markets ofproducts and services offered. These challenges could lead to poor performanceand eventually collapse of a cooperative society if not addressed (Njagi, 2014).While a considerable number of cooperatives in the country were unableto meet sustainability for lack of continuing proper cooperative education,majority of the duly registered cooperatives have displayed themselves asexemplars of putting their vision into reality despite inadequate assistanceextended to them by several government agencies and funding institutions, bothforeign and local. Furthermore, he mentioned that most cooperatives which relied
P a g e | 2solely on mutual and self-help have undeniably reached unprecedented heights(del Rosario, 2004). Cooperatives are great organizations and they have betterchances of survival and thus have the potential to help the world come out ofeconomic crisis (Barberini, 2009).In order to achieve economic viability, cooperatives should conduct theiroperations based on sound management principles and practices includingperforming their corporate social responsibilities. It has been emphasized thatmanagement is the primary force within the organizations for coordinating humanand physical resources and that managers are the one responsible fororganizational performance. Management is actually considered as the link toeconomic progress. Management exists to achieve the goals of an organizationthrough its four functions of planning, organizing, leading and controlling whileapplying resources with efficiency and effectiveness. Therefore, it is noteworthyto know whether these management functions are being realized by thecooperatives (Mina, 2019).The purpose of this study is to know whether the extent of attainment ofcooperative objectives significantly affect the level of performance of CooperativeA. This intends to fill in the gap regarding the relationship between the extent ofattainment of cooperative and its level of performance in terms of managementfunction and financial operation.
P a g e | 3The results of this study will be disseminated to the cooperativemanagement and members of Cooperative A and to the CooperativeDevelopment Authority.