M.Com. (Business Economics) / Please refer to full text to view abstract

Mbhashe Local Municipality is part of eight local municipalities that make up Amathole District Municipality. The study is conducted in Mbhashe local Municipality where two co-operatives have been sampled. The purpose of the study was to investigate the challenges faced by co-operatives in achieving its intended purpose (i.e. alleviating poverty, creating employment and generating income). It is the intention of the researcher to investigate the socio-economic role played by co-operatives in this afore mentioned local municipality. For the research to be able to examine and analyse the performance and challenges faced by co-operatives around Mbhashe certain key aspects were extensively taken into consideration. These aspects are co-operative leadership, management structures, external support from different stakeholders, like different government departments, communities where co-operatives are located, and the role of NGO’s. It was the intention of the researcher to analyse the type of support given by each of the above mentioned stakeholders. It was through the study that the research was able to deduce whether the support given by these various stakeholders was enough or not in ensuring viability and sustainability of co-operatives. In conducting the research a qualitative approach was used whereby various instruments were used to collect data. It was through the variety of instruments used that the researcher managed to capture the challenges faced by co-operatives. Apart from the challenges which were the main focus of the researcher, the findings also reveal that co-operatives play a vital role in socio-economic development. This is more evident in rural areas such as those at Mbhashe Local Municipality. There is undisputed evidence shown by co-operatives that community members do benefit from the produce created by co-operatives. If co-operatives can receive the type of support they deserve, poverty in rural areas can be put to absolute minimum.

The development of co-operatives has been increasingly seen, both globally and in developing countries, as a key strategy for a high economic growth rate, job creation and poverty alleviation. In trying to address these challenges, the South African government has been promoting co-operatives as an instrument for economic growth and socio-economic integration. Despite the realisation of the important role that cooperatives could play, not enough research has been done on the successes and failures of these organisations in achieving economic growth and socio-economic development in countries. The present study is an attempt to address this research gap. The primary objective of this study was to increase the success of co-operatives in South Africa by investigating the prevailing nature of operations of co-operatives and the determinants of the success of these organisations. More specifically, the study gathered qualitative information about co-operatives, identified which factors influence co-operatives in general and investigated which of these factors are the most important determinants of the success of these organisations in South Africa. A census was conducted of the 110 co-operatives registered in the database of the Leadership Academy (LA) of the NMMU Business School. Only 50 executive members of 26 co-operatives participated in the study (response rate of 23.6 percent). The empirical results revealed that the two most critical success factors for co-op success were the handling of finances and leadership; that language groups viewed coop success differently; and that females provide stronger leadership than males in cooperatives. The results also showed that skills development is an important factor in achieving these critical success factors. These results presented important managerial implications for the success of co-operatives.

This publication is not intended to be a scientific study and in fact does not pretend to be as such. It merely poses various perspectives and issues that reflect on the development and growth of the co-operative movement. A great deal of information grows out of personal and other experiences that have been shared at various levels, both individual, group, workshop/conferences and visits of actual co-operatives at work. The main people who have shared these experiences have helped, in one way or another to shape this publication. To them, and they know who they are, a very warm and special word of thanks. A particular note of appreciation for Sonja Sleigh and the members of the Peace Centre, who spent many hours in the typesetting and actual compilation of the publication. It is hoped that at the end of the day, that the questions and issues posed in this publication will serve towards enriching the growth process; the growth toward a richer and more human society.

The social and political effects of mass unemployment in South Africa mean there is an urgent need for strategies of job- creation. In this context, the Congress of SA Trade Unions (Cosatu), the South African Youth Congress (SAYCO), and the National Unemployed Workers' Co-ordinating Committee (NUWCC) have all expressed support for producer co-operatives, which are not only seen to have the potential to create jobs, but at the same time, are seen as providing a democratic alternative to capitalist enterprises. Thus firstly, this dissertation is exploring the potential for producer co-ops to fulfil these roles. However, for co-ops to make any contribution at all, they have to be economically viable. Thus this dissertation also attempts to analyse the terms on which this may be possible. In Chapter One, I analyse the roots of mass unemployment in South Africa, locate the problem and its effects within the framework of the current economic and political crisis, and analyse state strategies for overcoming this problem. I then turn to analysing the social and psychological effects of unemployment, and the implications of this for the growth of democratic organisation in the factories and township communities. I look at the strategies emerging for organising the unemployed, and conclude that the potential to organise the unemployed hinges largely around the extent to which unemployed workers' organisation manages to create jobs. In this regard, co-ops are a strategy of job creation that allows the unemployed to take the initiative in creating their own jobs, and on terms that build different forms of work organisation. On the basis of the priorities defined by the NUWCC, I then turn to analysing the limits and possibilities of co-op production. In Chapter Two, I address the theoretical issues that have emerged in relation to co-ops in capitalist society internationally, and attempt to analyse the reasons for their widespread economic failure, and for their tendency to degenerate into capitalist enterprises. From this, I draw out the potential terms on which collapse and/or degeneration can be countered, and refer to Mondragon in Spain and Lega in Italy as case studies. I then look at the potential political role co-ops can play, and conclude this chapter by focussing the issues discussed onto South African questions. In Chapter Three, I attempt a typology of co-op development in South Africa today, highlighting the extent to which a broad range of social forces see co-ops serving their own interests. Then, on the basis of a list of production co-ops in Addendum A, I analyse some of the overall features of the democratic co-ops that do exist at present, and point to the existence of degenerative tendencies in the South African context, with specific reference to Thusanang. I then focus on three case studies - the Pfananani co-ops, a carpentry co-op, and Nonthutuzelo. Each of these co-ops has arisen under different conditions, and they illustrate different aspects of the issues co-ops in SA will have to address if they are to survive. Chapter Four focusses on the production co-ops of the Sarmcol Workers Co-op (SAWCO), particularly the t-shirt co-op. The analysis of SAWCO constitutes the main case study of this dissertation. I have prioritised SAWCO because at the time I began the research, it was the only co-op with structural links to a Cosatu union; it is a co-op that arose out of the context of a workers' struggle, and contains important lessons for the establishment of co-ops with a clear relationship to democratic organisation. Furthermore, it relies on the 'solidarity' market to sell its products, and highlights certain important features and contradictions within this market. Finally, it highlights key issues in relation to the structures of ownership and control in democratic co-ops. In my conclusion, I attempt to draw together the material in the dissertation as a whole. I apply the theoretical discussion to the South African context, assess the implications of the nature of SA's economy for the development of co-ops, and attempt to provide some pointers to the terms on which democratic co-ops can be economically viable, thus creating jobs, at the same time as making a broader contribution to the extension of democracy in South Africa. / Labour studies research report (University of the Witwatersrand); v 4

The word ‘co-operative’ means to work together for a common goal. A co-operative is a group of people who together own and control an organisation or a business for the benefit of its members. A co-operative is democratic, and so the members of the co-operative are responsible to each other. They work for themselves; and together they decide how to run the co-operative and how to share the profits. / This booklet was put together by members of Cope, with the help of Paul Crankshaw (editing and layout), Leslie Lawson (photographs and interviews) and Sue Beattie (drawings)

Submitted in fulfillment of the requirements for the degree of Master of Management Science (Peacebuilding), Durban University of Technology, Durban, South Africa, 2017. / Conflict amongst cooperative members in Vumengazi, KwaZulu-Natal, is a major cause of concern, growing to an extent that threatens their survival. Lack of management skills tends to create conflict in cooperatives: members vie for a management position in the business, however, they often have no clear commitment or understanding of the duties required in management positions, even enough to handle the day-to-day challenges. Some of the groups formed a cooperative not because they have a joint objective, but because they planned to use the cooperative as a platform to access available resources. In most cases, the groups who formed the basis for this study lacked cohesiveness and this led to internal conflicts and an inability to work together. In most of the cooperatives, there were no professional business plans and they lacked feasibility with identifiable and foreseeable market opportunities. There were no drafted documents constitutions to govern the directors. The researcher undertook this study to investigate the following: • What are the contributing factors to conflict within the cooperatives? • What is the role of the 2005 Co-operatives Act in resolving conflict within the cooperatives? • What are effective ways to resolve conflicts within the cooperatives? A case study design using qualitative methodology was used in this study. In-depth understanding was needed; qualitative methodology was appropriate for a study of this nature. A sample of four co-operatives out of 20 from Wards 84 and 100, eNgonyameni Tribal Area, Vumengazi, was selected to identify the nature, extent, causes and consequences of conflicts, to assess the effectiveness of existing provisions for conflict resolution and the way they are implemented, to plan and implement an intervention strategy aimed at resolving conflicts to provide a foundation to resolve future conflicts. I engaged five people in a participatory action research programme and a focus group to establish the findings. Findings include a low standard of education among members; some members are very old who do not respect the youth. Gossip among the members led to cooperative issues being discussed in the community, thereby exacerbating conflict. Some of the cooperative members have primary education and they are unable to read and write English, however, the Act is written in English. Members of the cooperatives do not deal with conflict nor resolve it; there is no plan in place for such resolution. Members therefore keep grudges and bring them to work and meetings. Mismanagement of funds was found to be problematic. Conflict occurred regularly, partially because of the inability to analyse conflict among members and inability to apply peaceful conflict resolution methods. Recommendations as a result of the study are that peace education, both formal and informal, must be a prerequisite for cooperatives, to help members deal with individual emotions and behaviours and to avoid more aggressive approaches in running a cooperative. Local Economic Development officials and Ward Councillors need to come closer to rural cooperatives because of their stated interest in alleviating poverty in the area through peaceful running of cooperatives. Conflict does not allow cooperatives to flourish. / M

South Africa is faced with much poverty, joblessness and an economy that is not sustainable. Unemployment is on the rise in South Africa with the Eastern Cape having the largest number of unemployed people. Co-operatives can be used as a tool to combat poverty and for job creation, but the problem is that co-operatives are still an unknown entity in South Africa. Co-operatives are only known by a few and those few are still sceptical and not willing to form co-operatives. The already established businesses are also not forthcoming nor showing any willingness to do businesses with co-operatives. The less they do business with them, the less the co-operatives flourish. The present study investigates to what extent co-operatives can be a solution to decrease poverty and unemployment. The primary objective of this study was to make a contribution to the development and success of co-operatives by investigating the performance of co-operatives in the in the important business functions of financial management, general management, human resources management, marketing management and operations management. The study also investigated which of these business functions were the most important determinants of business success in these co-operatives. A sample of 50 co-operatives in the East London area of the Eastern Cape was selected and three members per co-operative were requested to answer the questionnaire. The expected number of respondents was therefore 150. However, only 65 usable questionnaires (response rate of 43.3%) were returned. The SEDA Small Business Assessment Tool was used to measure the co-operatives’ performance in these business functions. The empirical results revealed that the strongest correlates of business success in these co-operatives were financial management (r = 0.57, p < 0.05) followed by human resources management (r = 0.49, p < 0.05) and operations management (r = 0.40, p < 0.05). The results also show that, while the co-operatives do have some form of financial management strategies in place, they do not address some of the major financial management concepts that are really essential in a sound financial management policy. The co-operatives generally do not follow any formal financial costing system at all. The results however indicated that the co-operatives expressed high confidence in their financial, general and human resource management practices and low confidence in their marketing and operations management practices.

This thesis is based on an in-depth assessment of the three rural women co-operatives in the Tsojana village, within the Intsika Yethu Local Municipality, which is the largest and most rural municipality within the Chris Hani District Municipality. 95 percent of households in this municipality live in rural areas or villages (Integrated Development Plan (IDP), 2010-2011). Rural areas are characterised by high levels of poverty, deprivation, poor infrastructure, and poor linkages to markets. Rural women are the ones experiencing poverty at first hand due to the fact that they are less mobile; when food crisis hits, men tend to leave to look for work or income in towns/cities, while women stay behind to look after their families (Moyo-Mhlanga, 2001). In 1975, the World Bank addressed the question of how women can become effective in economic development, hence the establishment of Women in Development Projects to encourage them to be more involved in income-generating activities like rural projects, co-operatives (co-ops) and self-help groups. A co-operative is an autonomous association of people who join voluntarily to meet their socio-economic and cultural needs through a jointly-owned and democratically-controlled enterprise (International Labour Organization (ILO), 2002). The United Nations (UN) recognized the contribution cooperatives can make to achieve the Millennium Development Goals (MDGs) through productive employment, eradicating poverty, enhancing social integration and promoting the advancement of women. This research study was motivated by the fact that- there are various women development projects/co-operatives in Tsojana Administrative Area (A/A) which aim to improve the lives of the rural people for the better, but most of these co-ops are not sustainable and financially viable. Rural women have realized that in order to sustain development they have to integrate themselves into village development structures, as in various co-operatives, informal rural entrepreneurs and agricultural and non-farm income-generating activities. The study proposes to investigate the reasons for the failure of these co-ops to create sustainable rural livelihoods. The study further attempts to explore development strategies that will assist to transform and advance the co-ops towards sustainable development for all. It also aims to explore strategies that will alleviate poverty, create jobs, and address all factors of underdevelopment and deprivation. The overall methodological approach in this study is qualitative in nature, as it is based on the understanding of the situation from the participant‟s point of view, or perspective. It seeks to describe, investigate and explore aspects of development projects, and to also understand the aspects of socio-economic life of rural women. It combines three traditions of enquiry, i.e. case study, phenomenology, and ethnography. A non-probability type of sampling, in particular purposive sampling, was used for the study because the researcher‟s samples are based on her judgement. Interpretive research paradigm was used to allow the researcher to study meaningful social action, not just the external or observable behaviour of people, and various research tools were used to collect data. These co-operatives have been identified as struggling for survival, and lacking training, and material and financial resources. The co-operatives require support for expansion and modernizing their operations.

Many countries that have achieved economic development have a dynamic co-operative sector which contributes substantially to the development of these economies. From a global perspective, co-operatives have been proven to be flexible in meeting a wide variety of social and economic human needs such as job creation, alleviation of poverty and building of communities. With the drive to decrease poverty in South Africa, there has been an increased interest to support co-operatives with the intention to provide employment, social development and building communities/ community care. It seems, however, that South Africa has not yet reached the same momentum in the co-operatives movement as elsewhere in the world and the economy is still characterized by a high unemployment rate and a low growth rate (Van der Walt, 2002). This study is an attempt to determine the factors for business success in co-operatives by assessing the strengths and weaknesses of co-operative businesses within the Nelson Mandela Metropolitan Municipality in the Eastern Cape. The study includes an extensive literature review on the nature and prevalence of co-operatives in South Africa where challenges faced by South African co-operatives and particularly those in the Eastern Cape Province, are indicated. It also highlights international best practice and reveals that for co-operative success, apart for functioning by the International Seven Cooperative Principles, knowledge and expertise in business management are absolutely necessary so that co-operatives can be profitable and sustainable. With this knowledge, an adapted form of the Small Enterprise Development Agency (SEDA) Small Business Assessment Tool was used to formulate the questionnaire and to review business management literature. A survey conducted involved fifty-one co-operative members on the database of the Nelson Mandela Metropolitan University Business Unit. The opinions of the respondents were compared with the guidelines provided by the literature in the study in order to identify the strengths and weaknesses of these co-operatives, which then determine the critical success factors for business success in co-operatives. The empirical results show that the co-operative members understand co-operative principles and function through them. They have a fairly general knowledge of business management. The results also show significantly positive correlations between Marketing Management, Financial Management, Operations Management, Human Resources Management and General Management, on the one hand, and the business success of co-operatives, on the other hand. This indicates that these respondents recognize the importance of these business functions in the success of their businesses. However, failures and weaknesses experienced in these areas lead to the recommendations that they need to be mentored as they cannot put this knowledge into application, and secondly, they need financial assistance and support to sustain the co-operative businesses.