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How failure breeds success to co-ops
2006-07-19 09:09:06
By Mireny John
Across parts of the world, co-operative societies and their corresponding unions have survived the swings of business cycles because are managed by scientifically proved principles.
Traditionally, seven principles have guided the establishment and operation of co-operatives the world-over.
Where those principles have been grossly violated, co-operative movements have ended burying their heads into the sand.
Several co-operatives and unions in Tanzania are on the brink of financial collapse, for the same good reason of flouting co-ops’ management principles.
Looking closely at the type of viruses which have rocked down Tanzania’s co-operative movement, these have tended to wreck down two of the seven principles.
Back from early 1970s, when the state pretended it could extend its tentacles over all spheres of the national economy, co-ops were not spared.State intervention meant managers were no longer elected by members, contrary to the second principle which provides for ’democratic member control’.
Members ceased from active participation in setting their policies and making decisions. Men and women serving as elected representatives are were no longer accountable to the membership and the control of their co-operatives.
And because the state and ruling party patronage became the order of running co-ops, principle number four providing for autonomy, self-help organizational structures controlled by their members became an afterthought.
Co-operatives and their unions did not enter into agreements with the government on terms that ensure democratic control by their members and maintain their cooperative autonomy.
Co-ops and unions were run as if were an extension of the crudely inefficient and ailing state parastatal sector whose impact to the economy had been ruinous.
Embezzlement of members’ funds and outright fraud are typical features in most state-besieged co-ops because the managers were not accountable to the members.
Now that a number of unions are on the brink of collapse, some opinion leaders have suggested the government should opt to liquidate them, may be as the last resort.
This way of winding up business sounds rational because of its universality, yet it’s a dangerous short-cut whose upshot may mean total demise of the co-operative culture in Tanzania.
On matters relating to bankruptcy, the co-operative law in incredibly clear. The Registrar of Co-ops is empowered by law to place troubles co-ops or their unions under caretaker committee or order them be supervised by regional commissioners.
The danger of liquidation is the long-run probability of creating the documented impression that co-ops will not efficiently work out in Tanzania.
Here we are talking about failure, a thing which is feared by all managers.
But breakthroughs depend on it. The best companies, including co-ops, embrace their mistakes and learn from them.
Before state intervention into the democratic affairs of co-ops, nothing had tragically gone wrong. By then some unions had built up the financial clout to the extent of being able to provide free educational scholarships to their members. Co-operatives trained their managers and accountants.
Co-operative failures in Tanzania were basically due to bad ideas; the flops arising from the wrong assumption that a socialist state had to be all-round powerful.
We give an emphatic ’no’ to liquidation; restructuring is the right strategy. It is a matter of re-invigorating the seven principles of co-operation and allows the past glories to blossom.
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