Red, Yellow, Or Green: Which Colors Are Your Co-Operatives?

Novita Puspasari,Tiladela Luhita,Meutia Karunia Dewi

doi:10.20884/1.erjpe.2020.15.1.1535

Novita Puspasari, Tiladela Luhita + Show 1 more

Open Access

https://doi.org/10.20884/1.erjpe.2020.15.1.1535

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Abstract

Co-operative is a socio-economic institution which is the most appropriate for Indonesian economic system. Indonesia has the largest number of co-operatives in the world, however, they have not contributed optimally for the Indonesian economy. Co-operative trainings held by the government failed to improve co-operative’s quality, since those trainings were not based on co-operative’s real needs. This study aims to identify and map areas of action for future development of the co-operatives. Using modified Development Ladder Assessment (DLA) as a tool, 74 co-operatives in Central Java, Indonesia, were measured. Four dimensions were assessed using DLA: 1) vision, 2) governance and member engagement, 3) management capacity and business development, and 4) financial management. Total score for each dimension determines whether co-operative is in red, yellow or green areas. Red means poor, yellow means moderate, and green means excellent. Most of the co-operatives are poor in the first (vision) and the third (management capacity and business development) dimensions. The Co-operatives were also found to have moderate governance and member engagement (the second dimension). Finally, the result show that financial management (the fourth dimension) has been well-implemented. Implication of this study is that co-operatives are suggested to get appropriate trainings based on their color areas.

Highlights

In the first phase, identification phase, we conducted focused group discussion (FGD) involving seven key co-operatives in Central Java and government representations (Co-operative Department and Balatkop). This focus group discussion (FGD) discussed trainings held by government (Balatkop) for co-operatives in Central Java
FGD found that most co-operative trainings held by Balatkop did not reach target
Several cooperatives were invited twice or third times for the same trainings, whereas other co-operatives have never been invited for such trainings

Summary

Introduction

Co-operative is considered as the most suitable form of economic institution for the Indonesian economy. Co-operative is often taken for granted as conventional economic institution which has poor management and unprofessional human resources. Indonesia has the largest number of co-operatives in the world with 209,000 co-operatives (Indonesian Ministry Co-operative, 2016). In term of quality, co-operatives in Indonesia only contribute approximately 1.7% to Gross Domestic Bruto (GDP). Approximately 69,000 co-operatives in Indonesia are identified unhealthy and soon will be dissolved by the government

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Conclusion