Equality is the theme of the 2015 International Day of Co-operatives!!

In our globalizing world inequality is on the rise

The global income gap has continued to widen over the past years. A recent Credit Suisse report estimates that the top 1 percent of the globe’s population possesses nearly half of the world’s wealth, whereas the bottom half of world’s population holds less than 1 percent of its riches.

But inequality comes in a variety of shades. It can apply to ethnic, regional or locational characteristics, or personal features such as gender or age.

Preceding equal voting rights for men and women, gender equality has been a fundamental right in co-operatives, since their inception in the first half of the 19th century. Co-operatives’ typically flat hierarchy encourages a culture of teamwork, where talent is rewarded rather than competitiveness.

How inequality affects us all

Inequality matters because it influences our perceptions about self-worth and justice. All human beings are entitled to the same respect and dignity. Inequality however, has also serious negative socio-economic and security consequences.

  • Bad for the economy – Inequality also slows GDP growth. It hinders human capital accumulation, hurts educational outcomes and long-term economic prospects for those on the lower end of the income ladder.
  • Bad for our infrastructure – When excluded, people cannot participate in the institutions that build a society. Examples of this are medical capacity building, industry requiring schooled craftsmen, or credit and insurance.
  • Bad for our safety – The social impacts of inequality include unemployment, violence, crime, humiliation, and deterioration of human capital and social exclusion. Inequality negatively affects democratic participation, it fosters corruption and civil conflict.
  • Bad for democracy – Politically, inequality erodes the fairness of institutions. Inequality exacerbates the problem of holding governments accountable. Where social institutions are already fragile, inequality further discourages the civic and social life that underpins effective collective decision-making which is necessary for the functioning of healthy societies.

How co-operatives help

  • All owners – By widening ownership, co-operatives are a proven force for economic and social inclusion. If the co-operative model continues to grow, inequality will be reduced.
  • Open to all – Because a coop is open to all, anybody, man or woman, old or young can enter.
  • Decision power not dependent on wealth – Because a coop has 1 vote regardless of the capital, all have equal decision power.
  • Equality means also equal access to goods – The UN have recognized as a critical strategy, at the national level, that of ensuring universal access to good-quality, basic goods and services, the very purpose of a co-operative.

The United Nations state that it is important to ensure that provision actually reaches the sections of the population that are typically excluded. Co-ops focus on meeting the needs of their members rather than financial returns alone.

The co-operative movement, presents a unique combination of global reach and people based business conduct. We can play an important role in poverty reduction. Co-operatives help to reduce inequality by empowering people and by offering them a dignified and sustainable way to make a living.

Read more here

Advertisements

Ushirika Day 2014 Ruiru

SONY DSC

Societies displaying the banners during this year’s Ushirika Day Celebrations in Ruiru

Managing Change in Co-operatives

The economic environment is dynamic and keeps on changing globally. It is therefore imperative for co-operative societies to keep abreast of the global changes or risk being irrelevant. Change is sweeping in nature and non response to change leads to being obsolete.

managing change is saccosIn order for co-operatives to manage change as it occurs the following factors need to be put in place:-

1. Awareness

It is of utmost importance for members of the co-operative to be aware of the changes affecting the economy as a whole i.e. potential socio-economical, technological including information technology and their effect on modern living. To do this the co-operative are required to set aside adequate funds for training and education not only for committee members but also for the general membership. It is the general membership that provides the leadership of the co-operatives and also an enlightened membership is an asset to the society.

2. Amendment of the co-operative society By-Laws

The current liberalized economy requires that co-operatives can rise up to the challenges and pressures of everyday living. The Co-operative Societies Act Cap 490 has made provisions for the amendment of the By-Laws of co-operative societies so that they can incorporate the changes that are occurring to suit current members needs.

3. Professionalism in the management of the co-operative societies

Co-operative societies are essentially business entities with various different products and services, but they are not alone in that line of business. There are other players in their diversified fields competing for the same business. It thus important that co-operatives are managed with utmost professionalism in this age of liberalization in order for them to survive. Other competitors are professional in approach and functioning. They employ the best professionals in their fields found in the open market, they adopt the most economical, cost effective methods and strive for the maximum profit in the market.

4. Marketing strategy as a manner of change in co-operatives

Marketing research is vital to all stages of the marketing plan:-

  • For decisions on the marketing mix, for example product research, pricing research, advertising research, etc.
  • For the implementation and control of the marketing plan, and
  • For assessing the extent to which objectives have been achieved.

Marketing research gives the following information inputs from the market:-

a) Environment audit

This reviews the organizations position in relation to changes in the external environment i.e. social, political, cultural, legal, economical and technological. The audit provides information which directly affects the setting of co-operative objectives. The market place is by definition, part of the “environment” and is a source of revenue and profit.

b) The Competitor audit

Provides competitor intelligence, competitor response models and so on, which again influence the co-operative objectives, strategy and contingency planning.

c) The customer audit

Assesses the existing and potential customer bases to provide information as to whether to develop new markets.

d) Product portfolio

This analysis provides inputs for decisions on whether or not to drop certain products and or add new ones.

e) Provides the basis for all other functional activities as well as marketing.

Information inputs from marketing to the co-operative society planning decisions perform a double duty, apart from planning they also provide objectives and strategies.

From the foregoing discussions, it is apparent that in order to manage change awareness, preparedness and implementation not to forget continuous market research are necessary components that cannot be ignored.

NEW PRODUCT DEVELOPMENT IN SACCO SOCIETIES

new

In view of the changing economic role of the co-operative societies, there is need to properly formulate investment policies for maximum returns to the members.

Prior to liberalization of the co-operative movement and the economy at large, our co-operatives had been too complacent and lacked innovative approaches in performance improvement.

These co-operatives have tended to operate under policies which have led to;

a)      Lack of creative innovation

b)      Reluctance to embrace change

c)       Over-reliance on traditional customer and products

d)      Inward looking policies, etc.

Co-operatives must strictly and urgently address their operational deficiencies. This involves;

a)      Improving service delivery

b)      Focusing on core customer needs

c)       Reducing on waste

Co-operative members are becoming more demanding and knowledgeable. This means that the management cannot assume that its products will be well received forgetting that the members have a wide choice. The co-operative therefore must offer its customers additional services and customised products. This can be achieved if:

–          There exist well thought out investment strategies

–          There is proper implementation of those strategies

Developing a new product

In developing a new product, the society needs to address the following aspects.

–          What product needs to be developed?

–          Who are the targeted customers?

–          What benefits will be derived from the consumption of the product?

–          How will the product be financed?

–          How will the product compare with existing products and harmonizes with the existing market structure?

–          What is the technical capability of the society in implementing the investment/product?

–          Will the implementation be in harmony with the existing legislative and regulatory controls?

In addressing the above the society shall move in the following direction:-

  1. Identify the most important service the members need;
  2. Identify the extend of the market for such need;
  3. Identify the sources of finance of the society;
  4. Conduct a cost benefit analysis to find out if the project/investment is justified and;
  5. Prepare the following:

a)      The staff skills;

b)      The system of implementation;

c)       Structure of the scheme and;

d)      System of evaluation and control.

Target market selection

The following guidelines should be followed by the Sacco when selecting target markets:

i)                    The target should be consistent or at least compatible with Sacco’s goals and image;

ii)                   The Sacco should seek markets that are consistent with its resources and;

iii)                 The Sacco should seek markets that will generate profitable volume of trade.

 

 

%d bloggers like this: