cooperative movement, a small scale farmer owned business organisation, documentary the participant may learn more about cooperative history than he or
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The designations employed and the presentation of material in thispublication do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries.All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechani- cal, photocopying or otherwise, without the prior permission of the copyright owner. Applications for such permission, with a statement of the purpose and extent of the reproduction, should be addressed to the Director, Information Division, Food and Agriculture Organization of the United Nations, Viale delle Terme di Caracalla, 00100 Rome, Italy.©FAO1998 Reprinted 2001
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Index Introduction Current trends in the development of cooperative organisations iAbout this manual iiObjectives of the manual iiStructure and approach of the manual iiiModule 1 Understanding cooperatives Section 1.1 What is a Cooperative? 3Reference Info Seven values and principles of cooperatives5 Conditions needed to create a cooperative6 Essential conditions for continued success of cooperative organisations6 Potential advantages of cooperative organisations7 The role of government and external assistance in promoting cooperative organisations8 Development of cooperatives from other self help organisations8 Section 1.2 Forming a marketing cooperative 9Reference Info Forming and organising a marketing cooperative11 Main steps and activities in forming a cooperative11 Contents of the cooperative statutes/by-laws13 Organs of the cooperative15 Module 2 Participation training & learning Section 2.1 Participation in cooperatives 3Reference Info About participation, learning, training and action5 What does participation mean?5 A typology of participation in cooperative organisations6 Constraints of participation7 Key questions for assessing the level of participation in cooperatives 7Section 2.2 Training in cooperatives 8Reference Info The need for training10Requirements for the trainer10 Participatory learning 11Training content 13The role of the trainer 15Planning and organising training16 Participatory training techniques18 Reactions to participatory methods20 Visual aids22Training with illiterate participants24
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Module 2 Annex Exercises for Participatory Training A. Exercises for introduction and icebreaking 25B. Methods of visualisation27C. Exercises to bring out the variety of ideas and opinions among participants/members 31D. Exercises for enhancing group co-operation 33E. Training evaluation exercises 38Seating arrangements 41Module 3 Communication Section 3.1 Internal Communication Introduction 3Reference Info What is communication? 6Means of communication 6Communication problems 7Examples of conflicts8Improving communications 8Promoting effective communication in cooperative organisations11 Conducting meetings12Dealing with conflicts in training sessions14 Section 3.2 External communications Reference Info The relationship between cooperatives and governments18 Public Relations (PR) and the cooperative image19 Negotiations and contracts20 Module 3 Annex Communications exercises Exercises on communication in cooperative groups Controlled dialogue: Clear speaking – careful listening Whispered message One look into the mirror Exercises to express wishes and needs of participants Role plays on different leadership styles A conflict in a group Role plays on group conflicts The pool (Time: 30 to 60 minutes) Public Relations Exercises
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Module 4: Organisational Development Introduction Section 4.1: Organisational development and the vision statement Reference Info Defining organisational development 5Approaches to organisational development 6The cooperative vision 8Section 4.2: Norms, structures and entrepreneurship Reference Info Norms and cooperative development 14The development of appropriate organisational structures 15Members representation in organisational development 17Leadership structure 17Structures to enhance management effectiveness 19Incentive development 19Cooperative group development 21Maintaining motivation within the cooperative group 22Cooperative enterprise development 23Training versus non-training solutions in O.D. 24Annex Module 4: Tools and checklist for facilitating cooperative organisational development Determining if there is there an organisational development problem at all Initial assessment of the cooperative’s situation Example of structuring promotional activities using a work group Examples of typical situations in which promoters/trainers are asked to advise on organisational development Module 5: Cooperative Management Section 5.1 Managing the Cooperative Group Reference Info Developing leadership 6Meeting members’ needs10The free-rider effect 11Promotion of members economies13 Section 5.2 : Managing the Cooperative Enterprise Reference Info Financial management17Securing finance19Loan finance21Information on finances23Personnel Management 24Performance rating and reward systems28
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Section 6.3 Physical and economic planning: stock inventory, budgeting and reporting Reference Info Inventory and stock planning27 Budgets and cash flows 27Operating, record keeping and financial management systems29 Records needed to manage liquidity, reserves and cooperative assets31 Economic planning and reporting tools32 Profit and Loss Statements (P&L)33 Sensitivity analysis34Source and Application of Funds and the Balance Sheet34 Annex Module 6 Personnel plan – assigning responsibilities Bar chart planning Financial Budget: Kei’s Cooperative Shannon’s Shoe cooperative Module 7: Participatory Appraisal, Monitoring and EvaluationReference Info The importance of a participatory approach to cooperative development4 Appraisal, monitoring and evaluation4 1 Participatory Appraisal 5Perceptions and attitudes 92 Participatory monitoring 93 Participatory evaluation 104 Controlling (see also module 5.3)11 Aspects to be monitored and evaluated12 Setting up a participatory monitoring and evaluation (PME) system14 PME methods and techniques16 Module 8: Accounting Reference Info I. Why keep accounts 3II. How to set up accounting?6 A.Facilities for accounting have to be provided7 B.Vouchers are evidence8 C.Methods of accounting9 D.Simple recording – minimum requirement10 III. Double entry bookkeeping A.What does the accountant do?12 B.Structure of a transaction account12 C.Record book 16D.Ledger E.Worksheet including trial balance22
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IV. Financial reports 27A.Preparation of an income statement B.Preparation of a balance sheet 28V. Analysing financial statements 29A.Assessing the financial strength of the cooperative 34Short-term liquidity Long-term capital structure 35Solvency 36Indebtedness36B.Value of the cooperative 37Net worth per member VI. Computer information systems 40A.Requirements for computer accounting 41 B.What are the advantages of computer accounting? 41C.Computers improve efficiency and competitiveness 42Example training course schedule for cooperative development training Bibliography and further readings
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Introductioni IntroductionIntroductionIntroductionIntroductionIntroductionCurrent trends in the development of cooperative organisations The economies of many countries are currently undergoing transformation to adjust to market oriented reforms. The involvement of governments and parastatals in the national economies has been harmful in many ways and as a result, they are called upon to intervene less, and to let markets work. In a number of countries, government policy has consisted of approaches that resulted in less rather than more effective operation of cooperative organisations. Cooperative organisations have often been created from above without the genuine participation of members. As a result the members have, in many cases, become alienated from what should have been their own organisations, with little or no influence on issues that should be of direct concern to them, such as the marketing and pricing of their own products. The potential of genuine cooperative organisations to contribute to rural development based on popular participation has to a large extent been wasted and the very concept of cooperative self-help has fallen into widespread disrepute. Thus, in many countries a review of policy concerning cooperatives is needed with a revised approach being based on the principles of participation, and consultancy rather than intervention. This does not necessarily mean that existing policies need to be completely abandoned, in many cases, they can be adapted to suit a more participative and market oriented approach. The impact of economic and political changes on cooperatives has been varied with some positive and some negative effects. A positive effect is that cooperatives often benefit from the withdrawal of parastatals through achieving a more sustainable relationship between members and their environment. Cooperatives can also contribute to society more as “schools for democracy” without the state subsidy and support. The growing trend is for privatisation, decentralisation and participation, in which people have far more responsibility for their own development. This will include a much stronger emphasis on mutual self-help and reliance on own resources, and a reduced expectation that governments will intervene with assistance. Many governments have come to accept this approach. However, putting this into practice is a long term process requiring training and organisational growth to develop the business skills needed for a market economy. While the restructuring process taking place in many countries results in a more favourable environment for the development of cooperative organisations, at the same time it exposes them to the tougher conditions of free enterprise and competition with other commercial firms. Through mutual self-help in areas of common interest, cooperative organisations can achieve strength in the market place. Through participatory activities it is possible to mobilise local resources and local knowledge for self-reliant development. That is the way towards developing a genuine cooperative movement, a small scale farmer owned business organisation, one which has successfully been adopted by farmers in many countries throughout the world.
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Introduction iiAbout this manual This manual is intended for cooperative trainers who will either work directly with cooperative organisations and their members, or will train other trainers.It is not intended to be a theoretical textbook, but a source of ideas and suggestions for facilitators or resource persons, in making the work of cooperatives more efficient and effective. Some of the ideas and proposals are of particular use for smaller cooperative organisations or organisations in the process of being formed. Others will be more relevant to larger organisations with wide experience in business transactions that are in the process of being transformed into genuine self-help organisations (e.g. in Eastern European countries). However, many of the principles of participation and self help are of relevance regardless of the size and origin of the cooperative. All cooperatives also need to deal with business aspects to a great extent from the very outset. This manual emphasises the need to base all training and promotional activities on sound principles of first appraising local circumstances. For any promotion/training to be effective it should be based on what the cooperative members feel they need to know, rather than attempting to pass on everything there is to know about a particular subject. Local cooperative members are unlikely to have the time or interest to listen to information that is irrelevant to them. If they are also asked to contribute to the development/ training process either financially or in terms of their input, they will be very unlikely to want to do so unless they can see immediate use for what they have learned. Objectives of the manual This manual deals with ways in which trainers and promoters of cooperatives can support cooperative members and management in the development of their cooperative organisations. Its aims are: to broaden the trainers’ view of their role, and ways in which they can react to circumstances, and to increase their confidence in their own capabilities. In short, to increase their competence. to help the trainer become an effective facilitator and moderator. That is to say someone who can offer new methods for dealing with problems and tasks, assist in solving conflicts, draw attention to alternatives and assist in the more effective operation of the cooperative to equip the trainer with tools to act as a resource person , providing information to the cooperative organisation, its members, leaders and managers. to familiarise the trainer with participatory techniques which involve all parties concerned with the future of cooperative organisations. to support the trainer in the various tasks of raising awareness among cooperative promoters, members, decision-makers, leaders and managers, of their problems/ constraints as well as to their potential/capabilities, without taking the initiative away from them, thus ensuring the greatest possible acceptance of whatever plans are to be followed.
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