CHAPTER-10: ISSUES IN COOPERATIVE MANAGEMENT

10.1 ISSUES RELATING TO MANAGEMENT:

The Ethiopian cooperatives have the following issues relating to management.

1. Inexperienced staff;
2. Lack of adequate training;
3. Poor accounting keeping;
4. Lack of cooperative audit.
5. Lack of managerial leadership;
6. Lack of organizational framework for cooperative education and propaganda;

Inexperienced Staff:

The majority of the Ethiopian cooperatives are being manned by personnel who are not
adequately experienced, which in turn, has an adverse effect on effective management of
the cooperatives.

Lack of adequate training:

Trained manpower is very much necessary for every organization and cooperatives are
not exceptions in this regard. In Ethiopian cooperatives, the employees are not
adequately trained. The basic reason is, unlike other countries, in Ethiopia, no definite
structure exists for cooperative training. In other countries, separate cooperative training
structure consists of two-tiers and three-tiers exist.

Poor account keeping:

The accounting system followed by Ethiopian cooperatives is outmoded and not in line
with the typical cooperative accounting practices. Any accounting system, to be
effective, should be simplified to make it transparent to the members. So, scientific
cooperative system based on receipts and payments is a must for Ethiopian cooperatives.

Lack of cooperative audit:

In Ethiopia, there is no separate wing for cooperative auditing. At present, no scientific

system of auditing is done by cooperatives. Every cooperative follow their own system
of auditing. So, there is a need to create a separate audit department with autonomy.

Lack of managerial leadership:

When cooperatives grow, more and more activities are added and branches are to be
opened. This calls for dynamic managers to run the cooperatives efficiently and to face
the competition from private sector. At present, the managers of Ethiopian cooperatives
are less informed and less experiences to face the managerial challenges.

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7. Lack of organizational framework for cooperative education and propaganda and
government initiative.

As cooperative movement in Ethiopia faces ups and downs, an organizational

framework in the form of departmental set-up, and organizational wing for
cooperative education and propaganda were absent. During the formative years of
cooperative development, the government’s initiative in the form of managerial,
legislative, infrastructural, financial, and the like are very much important. We have
to go a long way in fulfilling the above needs in Ethiopia.

10.2: ISSUES RELATING TO LEADERSHIP:

The following are the issues relating to cooperative leadership in Ethiopia:

1. Lack of education of cooperative leaders.

2. Lack of initiation from the general public.
3. Lack of exposure.
4. Sense of fear complex.
5. A mentality for self-less service.

Lack of education of cooperative leaders:

Cooperative leaders in Ethiopia do not have popular cooperative education. In other

countries, when the cooperative movement was started, the cooperative leaders
thoroughly studied the cooperative movement of their neighbouring countries and
other countries. A strong labour movement has provided leadership to the
cooperatives in western countries. Such labour movement was absent till recently in
Ethiopia.

Lack of initiation from general public:

The general public must have enthusiasm to promote voluntary organizations like
cooperatives. Such enthusiasm among the general public can create cooperative
leaders. In the absence of such atmosphere, we cannot expect the emergence of
cooperative leaders and organization of new cooperatives.

Lack of exposure:

Cooperative leaders of Ethiopia lack exposure to the development of cooperatives in

various countries. An exposure of development of cooperatives in other countries can
enrich the knowledge of cooperative leaders in promoting new types of cooperatives
and strengthening existing cooperatives. The time has come for the Ethiopian
cooperative leaders to get the help of world bodies like ILO, and ICA.

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Sense of fear complex:

Cooperative leaders of Ethiopia are not willing to take risks in running the business of
cooperatives. The past political happenings made them not to take any risk in
running the cooperatives. Only by means of taking risks, the cooperative leaders can
meet the challenges from various corners.

A mentality for self-less service:

Cooperative leaders must work for others and they must have selfless attitude. They
should work honorarily for the upliftment of cooperatives. Credit cooperatives in
Germany and consumer cooperatives in England became world famous because of
the selfless service of the founder-cooperators and their followers. Such attitude in
lacking in Ethiopia, which needs to be strengthened in future.