Chapters 1-2.docx - Page |1 CHAPTER 1 INTRODUCTION Background of the Study Cooperative Development Authority as cited by Turingan(1995 found out that

Chapters 1-2.docx - Page |1 CHAPTER 1 INTRODUCTION...

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P a g e | 1 CHAPTER 1 INTRODUCTION Background of the Study Cooperative Development Authority as cited by Turingan (1995), found out that some of the reasons for the failure of cooperatives were lack of education and training, and inadequate information and practical know-how on the principles, nature and operations of the cooperative organization which led to incompetent management. Poor performance has led to members’ withdrawal from some cooperatives. Failure to save and repay loans is also an indicator of poorly performing cooperatives in the Sub County. This can be attributed to organizational and leadership challenges, difficult operating environment and inability to adapt to changing socio-economic environment, including markets of products and services offered. These challenges could lead to poor performance and eventually collapse of a cooperative society if not addressed (Njagi, 2014). While a considerable number of cooperatives in the country were unable to meet sustainability for lack of continuing proper cooperative education, majority of the duly registered cooperatives have displayed themselves as exemplars of putting their vision into reality despite inadequate assistance extended to them by several government agencies and funding institutions, both foreign and local. Furthermore, he mentioned that most cooperatives which relied
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P a g e | 2 solely on mutual and self-help have undeniably reached unprecedented heights (del Rosario, 2004). Cooperatives are great organizations and they have better chances of survival and thus have the potential to help the world come out of economic crisis (Barberini, 2009). In order to achieve economic viability, cooperatives should conduct their operations based on sound management principles and practices including performing their corporate social responsibilities. It has been emphasized that management is the primary force within the organizations for coordinating human and physical resources and that managers are the one responsible for organizational performance. Management is actually considered as the link to economic progress. Management exists to achieve the goals of an organization through its four functions of planning, organizing, leading and controlling while applying resources with efficiency and effectiveness. Therefore, it is noteworthy to know whether these management functions are being realized by the cooperatives (Mina, 2019). The purpose of this study is to know whether the extent of attainment of cooperative objectives significantly affect the level of performance of Cooperative A. This intends to fill in the gap regarding the relationship between the extent of attainment of cooperative and its level of performance in terms of management function and financial operation.
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P a g e | 3 The results of this study will be disseminated to the cooperative management and members of Cooperative A and to the Cooperative Development Authority.
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