Facilitating "Cooperative" Management Development (1996)


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This document has been made available in electronic format
by the International Co-operative Alliance (ICA)
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December, 1996
(Source: Coop Dialogue, Vol.4, No.4, May-Dec., pp1-6)


           Facilitating `Co-operative' Management Development
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by
Dr. Peter Davis
(Director, Unit for Membership-based Organisations, 
the Management Centre, University of Leicester)


Why `Co-operative' Management Development?
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There is a received wisdom that has prevented any real evolution of the
concept of `Co-operative' management as a focus for management
development. This is that whilst Co-operative membership-based
organisations may hold similar values and principles, co-operative
management operates separately as a technically competent civil service
functioning purely or mainly in terms of functionally specific organisational
and commercial contexts. Today, effective co-operative management
development must combine the Co-operative and the commercial/
organisational context if managers in co-operatives are to succeed in
growing the co-operative association as well as the co-operative business.
As co-operative business itself grows to meet increasing competition in the
conditions of the global market,  managers need to recognise that the co-
operatives social dimension is itself a commercial asset of central importance
in the development of the organisations marketing, human resource, and
service/product delivery strategies. In defining the co-operative identity we
cannot ignore management who are the most central and crucial conduit,
facilitator and controller of information and decision making within the
modern co-operative business. 

In the figure of Robert Owen at the very outset of the industrial revolution in
the 1820s, we have one of the founding fathers of modern co-operation
who was himself one of the earliest examples of a successful modern
manager. A manager, let it be noted, who combined an understanding of the
latest technical conditions of production with the strongest ethical sensibility
and the motivation and acumen to combine both in his model factory at New
Lennark. Owen's ideas were rejected by the contemporary mill owners of
his day but his lead was taken up by social reformers and contributed
greatly to the development of the modern co-operative movement. It is,
therefore, ironic to realise just how far modern thinking now reflects
Owen's recognition of the importance of the socially responsible
management of stake-holder relationships in the modern organisation. The
growth of interest in ethical and socially responsible management is in part a
recognition of growing consumer awareness of the damage to human health
and to the natural environment that can result from the unregulated pursuit
of share holder interests for private capital accumulation and the fastest
possible rate of profit.

However, and this may be the biggest irony of all, the general acceptance of
the importance of culture and values along side the positivistic quantifiable
aspects that define both management development and organisational
development agendas today itself stems from this very market-based
competitive imperative to increase profitability and the rate of growth. Thus
the importance of culture and values is not merely a matter of passing
fashion. It derives from the pressure that is central to modern commercial
organisational development today. Namely the need to effectively
determine, implement and adapt to change. This requires increasingly
greater integration of functional management disciplines in order to remain
within a focused strategic programme that responds to competition without
being diverted by it. The effectiveness of this integration depends upon the
organisations ability to devolve management decision-making and increase
the organisations' ability to act flexibly without loss of quality, cohesion
and direction in the provision of its services.

Co-operative values and purpose, therefore, are not merely a contextual add
on which the modern manager of a co-operative society needs to be aware
of. They are in a real sense a unique management resource that can, when
properly applied, provide a competitive advantage in the co-operatives
positioning in the market place and in its utilisation of human resources.
Modern management writers have recognised in theory the importance of
culture and values in the achievement and maintenance of quality standards
in the organisation1. Modern managers, however, have great difficulty in
achieving quality standards in practice2 because the values they have to
operate in one lack element that is central to the achievement of employee
compliance and customer satisfaction. It is an element that is central to the
co-operative values and identity, namely, mutuality. 	

It is mutuality that determines the stakeholder relationships within the co-
operative and in its external relationships. This is because the co-operative
purpose is to bring social justice to the market place and co-op methods are
based on  mutual membership-based associations to achieve this end. Thus
a co-op does not behave co-operatively if it enters into exploitative
commercial relations with non-members. Social justice and mutuality are not
values that can be applied selectively or one-sidedly.3

The question that faces us then is if Co-operatives have such a crucial
strategic advantage inherent in their very culture, values and principles, why
is their performance so patchy and why are they doing so badly in many
contemporary contexts? Why are they so often the last to innovate rather
than the first? Why have they had such difficulty communicating with and
mobilising their memberships? Why have they struggled to grow market
share? Why are their levels of productivity and price competitiveness so
often lagging behind their rivals? Finally, why at such a time of increasing
social polarisation in economic terms are the long established co-operatives,
particularly in Europe, so often finding it difficult to identify both their
natural membership base and a modern role for themselves? The reason is, I
believe, to be found in the point I started with, namely, the co-operative
movements' failure to define a `co-operative' management in any thing other
than the terms of a civil servant. It is the movements' unwillingness to
develop and empower management so as to be seen as leading as well as
serving the wider membership and organisation (of which management
itself should be seen as forming a crucial part) that is the problem.4 

The myth of lay leadership and the reality of our urgent need for
professional leadership in the context of modern business must be
addressed. It is not a matter of denying the democratic principle but facing
the emptiness of our democratic practise that is central to the development of
co-operative leadership. In saying this, I am not arguing that lay members
on boards must be replaced by expert proxies as some writers and even
co-operative administrators appear to advocate.5  Rather, I argue that,
firstly, lay board members must be supported and lead by professional
co-operative managers as full members of the board, and secondly that this
can only work in the context of a unified co-operative culture that
incorporates members and all levels of management.6 The concept of
professional and its application to the concept of management is a matter of
some controversy in itself.7 I use the term `professional' in its traditional
meaning as a defined body of skill and knowledge that is practised and
whose objective purpose is defined under the application of a definite
human centred ethical standards. It is the achievement of applying co-
operative values and principles themselves to management that provides
both the management purpose and the standards of its application. As we
enter the millennium this is the single most important objective for human
resource development in the co-operative sector. 

2.	What is the content of `Co-operative' Management Development?
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The first point is that `co-operative' management  development must not be
seen as a ghetto. Its content addresses the same problems as other
conventional  management development. Awareness and ability to analyse
the business environment, to recognise the threats and opportunities therein,
to audit organisational strengths, weaknesses and resources. To develop
strategies and policies, to plan, to implement, monitor and control. To adapt
to change by identifying and managing innovation, both technical and
social/organisation. To exercise leadership, motivate, develop, build teams.
Establish effective communication, involvement and the acceptance of
developed responsibility. To identify and maintain the highest standards of
quality in the implementation, human resource management and
development and choices it makes in the procurement of resources, the
development and delivery of products and services, and finally in its
allocation of surpluses between stakeholder.

What is important and powerful about this approach in the co-operative
context is the transparency and authenticity with which it can be applied due
to the mutual status of a membership-based organisation constructed upon
co-operative values and principles, and directed towards co-operative
purposes. Its advantage for logistics and other support and delivery
processes providing customer products and services.

It is in the solutions to these problems that `co-operative' values and
principles can play a vital part by adapting and developing what is best
practise in modern management and blending the insights of co-operative
and mutual values to the service of our distinctive co-operative purpose.

The methodology of `co-operative' or `value-based management' relies on
establishing within the organisation a value-based behavioural quality
standard that reflects and leads customer and members' opinion in order to
sharpen and differentiate the co-operative within the market place on the one
hand and to ensure the reflection of this standard in the culture and values
that guides the organisations' human resource management lies in the
legitimacy that co-operative values and purpose gives to the leadership
management needs to exercise in the common good that in the co-operative
case really is the common good.

3.	How best can we deliver `Co-operative' Management Development?
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It must also provide the individual manager with the flexibility to tailor their
learning to suit their individual development needs both in terms of content
and delivery. This theme was particularly emphasized in the report from
U.S. Department of Agriculture entitled `Co-operative Education - Task
Force Final Report', A.C.S. Service Report 35 published in July, 1993.
The report concluded "Materials must be individualised both in use and in
message.  Distance learning, small group methods, or one on one learning
would be of increasing importance in some circumstances. Materials and
systems that constrain the educator/facilitator or the audience in terms of
time and contents will loose out to those that don't. Materials and
programmes must be built using technologies that allow the individual user
to have complete control over the timing or schedule of use." This American
research identified the need for co-operative management training to broaden
its perspectives to allow for cross fertilisation between various co-operative
sectors: "bridges must be built between agricultural and other segments of
our educational system, especially in the fields of business, economics and
sociology. Collaborative research and curriculum development is required."
That the current provision can be described as segmented and incomplete is
not in doubt. Many audiences for co-operative management development are
inadequately served by materials that rarely go beyond the introductory
level. The way to overcome the perception of the co-operative sectional
exclusiveness and the consequential fragmentation of development
provision that flows from it is to recognise the common co-operative
purpose, values and methods found in all co-operative associations.
Managerial knowledge may be specific to a given field of activity but
managerial culture, values and many of the recognised skills of effective
management are clearly transferable. Building links to the various sectors
within the system of educational system is helpful as the American report
recognises. If such resources are to be successfully adapted to meet the
management development needs of membership based organisations, there
needs to be a recognition by the institutional providers of management
education of the different context provided by co-operative purpose and
structure. This recognition leads to co-operatives at their best to develop a
distinctive co-operative management and organisational culture.

In the United States it was felt that a national clearing house was needed to
collect information and descriptions of co-operative educational programmes
and materials in order that a general upgrading in overall standards of co-
operative management development and member education could be
progressed.  Co-operative case studies capable of use as vehicles for
management development are few and far between at present. 

The fragmented and often invalidated programmes provided for co-operative
management and members does not provide an adequate incentive for
people to undertake co-operative management development. We need to
develop advanced validated management development programmes that will
enable co-operative managers to match the mobility of their capital-based
colleagues and enrich the wider co-operative movement that in today's
global economy does have the size and diversity to sustain the emergence of
a co-operative management with international experience and perspectives.
Such a programme will itself have to be provided necessarily at the
international level. 

An example of the growing recognition of the importance of  the
international perspective in  co-operative  management development is
provided by a recent Swedish Co-operative Centre report on training for
co-operative leadership. This was the result of a series of evaluation
seminars undertaken with African and Asian Co-operative Managers and
Development workers during the period Sept-Oct, 1992.  The participants at
these seminars identified a common stock of co-operative knowledge, skills
and attitudes that would be essential to address in an international training
programme for any identifiable group of co-operative leadership, whether
professional and executive management, lay directors or government
officers and development workers. This common stock of categories
identified were as follows: 

i.	The Political, economic and social changes and development
affecting the co-operatives, both international and domestic,

ii.	Management information systems involving new technologies,
management techniques, strategic planning and control, 

iii.	Leadership skills and attitudes, 

iv.	Co-operative values and principles, 

v.	Gender sensitisation, 

vi.	Protection of the natural environment. 

The Report concluded "in the context of new economic policies oriented
towards the market economy, the need for greater emphasis on these aspects
on the training programme should be stressed, ideally by combining and
analysing linkages between co-operative values, socio-economic objectives
and competitive strengths of the co-operative. Priority should be given to
issues and topics related to technical and commercial aspects of
management." One has to take issue with the report regarding this question
of priority for technical and commercial aspects of management training in
respect of leadership. This priority may be correct at introductory and
immediate levels of management development but those advanced levels of
provision concerned with leadership training must emphasise co-operative
purpose, values and culture in order to ensure the effective application of
macro level managerial skills and knowledge. Particularly those relating to
the definition of objectives and quality, the identification of standards, and
the development of policy and strategy consistent with the successful
growth of the whole co-operative association. 

The particular context within which the co-operative management training
was being delivered was, nevertheless, recognised as being highly
significant by these Swedish conducted seminars. "... Co-operative
leadership training programmes cannot be properly prepared without first
considering what kind of co-operative development the participants are
supposed to be involved in and promote on the completion of their
training." The report concluded that regional and international training
programmes should be designed to provide primarily training in those areas
and for those categories of personnel whom national movements' training
provision was unable to cater. This implies that introductory training would
be provided locally but that the more advanced levels of training,
particularly at graduate and post graduate levels could in fact be more
effectively provided at the international level.

The relevance of international experience for the provision of co-operative
management development was underlined in Report 2 of the meeting of
experts of Co-operatives, Geneva, March 29-2 April, 1993. The report
entitled "The Role of Human Resources Development in the Economic
Viability, Efficient Management and Democratic Control of Co-operatives",
published by the ILO had this to say on the question of learning:

"New approaches to training programmes include distance education for
co-operative staff, managers and board members. Such courses are being
offered in Costa Rica, Kenya, the Philippines, United Republic of
Tanzania, Uganda and Zambia to name only a few. Mass media can be used
for co-operative HRD, especially in those countries where the co-operative
structures are weak or more informal. In the few cases where mass media
was used in the past, it was conceived as co-operative education for the
general public and information for potential members as, for example, in
Botswana, Cameroon, United Republic of Tanzania and Zimbabwe.
Recently mass media has been used for tailor-made distance learning
programmes in co-operative management, e.g., the Costa Rica Programme
of Alice Cop. These training approaches are of particular interest in
countries where co-operatives are disbursed over large areas, for example in
Argentina, Australia and Brazil. 

They can also be an advantage in small island economies such as those in
the Caribbean or South Pacific regions, where co-operatives need to take
advantage of co-operative experiences and potential in neighbouring
countries and where the maintenance and operations of a specialised training
institution are too costly compared to the size of the population. Distance
education and training were also introduced as correspondence courses in
Kenya, United Republic of Tanzania, Uganda and Zambia, because of
financial constraints, the large number of trainees, and the inability of
trainees to absent themselves from the workplace. 

The use of mass media and correspondence courses for distance education
and training also reduces the migratory effects of training which takes place
over long periods in urban areas.

It was recognised by some of the literature that development agencies, both
in the west and the third world that had been supporting co-operative HRD
activities for many decades had not been, in general, particularly successful
and that the issue of setting effective standards for training policies and
programmes conducted by agencies like the ILO had not been effectively
established in all cases. Paragraph 38 of the Report of the Meeting of
Experts on Co-operatives, Agenda item 6 clearly indicated the need for
collaboration with established and recognised providers of higher education: 

"Co-operative Human Resource & Development should form part and
parcel of general education and be promoted at all levels of the education
system. It should be included in the curriculum of educational institutions
and it was noted that co-operative studies should be offered at Universities
and Colleges as part of the course of economics and business management
since co-operatives were among the forms of business enterprises but
having special characteristics. The meeting agreed that the establishment of
school and university-based co-operatives should be encouraged because
they could provide business experience to youth whilst instilling in them the
principles and values of co-operation. Furthermore, Co-operative Human
Resource Development should be linked with vocational training
programmes since co-operative enterprise could provide self-employment
opportunities for the trained. It was also observed that where desired,
recognition be given by the Ministry of Education to Diploma and Degree
courses in Co-operative Studies."

3.1	Distance Learning
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Advanced programmes leading to Masters' level accreditation for 
co-operative management by distance learning are clearly one important
way to meet the needs and the challenges identified in the many reports
(including those cited above) on Co-operative HRD.

Distance learning provides wide access and flexibility at prices that are
affordable to very much wider sectors of the population than would
otherwise be able to have access to University level programmes and
expertise. Distance learning may be more adaptable to the social as well as
economic character of the Co-operative enterprise with its importance for
mobilising vast numbers of the world's poorest and often socially excluded
peoples, both because of its low costs and because of the co-operative
context for its delivery.

There are two elements that could support a co-operative management
distance learning-based programme. 

3.1.1	  Flexibility:

Firstly, such a programme provides the flexible response needed to enable
entrants to cope with the materials at an appropriate level whether
elementary or fast track development.

a)	Assessment structures can permit individuals to work through the
materials at the level of achievement that meets their development needs and
that of the co-operative society to which they belong,

b)	Assessment levels can provide clear criteria for identification of
those individuals capable of development and achieve higher academic
standards that will enable them to benefit from further development,  

c)	Time and place as well as pace and depth flexibility are also
important aspects of distance learning provisions enabling the most effective
individual integration of work and study.

3.2	Co-operative self-help and the social context in individual
development
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Secondly, distance learning does not have to mean learning in an
unsupported environment. 

At the heart of the Co-operative idea is the belief in association or
community as the best grounds for self-help. This is particularly relevant to
the process of learning and self-development. Learning is a social process.
If we apply the idea of mutuality to the learning process in an organisational
context, we note immediately the mutual benefit for the individual student
and their organisation. We can recognise that co-operatives can potentially
provide enhanced resources and support for the distance learning student
because of the co-operative values and culture that may not always be
available to distance learning students in other contexts. These include:

a)	Horizontal strategies 

i.	Co-operative groups in villages and urban communities and
functional settings in more complex co-operative business environments can
provide a framework for peer group learning and course member support
networks,  

ii.    Co-operatives have education as a key principle thus local resources in
terms of facilities, equipment, finance, monitoring and mentoring may be
more readily available to support the student.  

b)	Vertical strategies 	

	Structured guidance for interaction with superiors and subordinates
within management hierarchies to facilitate learning and development is
particularly relevant to organisations which boast that education is one of
their guiding principles and is central to their organisational culture and
development strategies.

c)	Networking strategies

	The widespread network of development and promotional agencies
that exist to support co-operatives such as the ICA, ILO, the & Co-operative
colleges, Government departments, Funded projects, Open colleges, etc.
means that there exists opportunities for otherwise under-resourced
individuals to get access to sophisticated resources and materials to support
their learning such as:

*	Study skills,
*	Access to New Technology, 
*	Access to institutional resources such as libraries,  
*	Access to supplementary/additional training facilities through local
co-operative development programmes.  

	The range of assignments can include some that will encourage
networking and other means of accessing the wide range of development
facilities that exist in most environments where co-operative development is
taking place.  

d)	Individual strategies

	People who join and become active in co-operative enterprises are
motivated individuals who believe in a philosophy of self-help and self
improvement. They have the attitude, commitment and motivation to try
hard to succeed. This is equally true of individuals who aspire to positions
of responsibility in the management of any form of organisation. The
programme materials whilst encouraging candidates to network and to
utilise the various opportunities that exist will also emphasise their personal
responsibility for learning and provide guidance on time management and
other self-management techniques and study methods that can help them.

e)	Towards a distinct Co-operative Management Development
Programme

	The need for progress towards a management development
programme that differentiates co-operative management culture from general
management culture is beginning to be recognised at the highest levels
within co-operative management today. It was very much part of the
international debate on the draft statement of Co-operative Identity finalised
at the International Co-operative Alliance Congress held in Manchester last
September, 1995.

A Diploma/Masters programme in co-operative management could provide
accessible and flexible responses to the general management development
needs of co-operative societies of ll types at post graduate level with a fast
track access to the post graduate level through an endorsed Certificate
programme for able students who have not had access to undergraduate
studies.

A truly international co-operative management programme will help
co-operatives to break their isolation and enable the development of a global
and therefore transferable management culture within the co-operative sector
to rival that of the well defined management cultures of the movements'
trans-national competitors. This will help to facilitate what has long been
acknowledged to be the Achilles heel in the world co-operative movement
the protecting of co-operative purpose and integrity whilst adopting a
professional management structure and culture. Secondly, it could support
the development of improved co-operation between co-operatives. This
latter point is of growing urgency in the face of the opening up of national
markets to growing external competition at the level of the economy, and, at
the level of society the increased levels of urban and rural poverty,
unemployment and social exclusion. Today, we need more than ever
programmes for co-operative management development, which creates the
culture and develops the skills to enable the new generation of co-operative
managers and directors to lead their co-operatives in addressing both sets of
challenges. Professional managers who recognise the relationship of
economic and social structures and the continuing relevance of the co-
operative association in providing a socio-economic strategy leading to
increased social justice and solidarity within the market economy.  

References
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1.	Co-operative Taskforce, Final Report (No.35), United States Dept
of Agriculture, Washington, July, 1993, p. vii. 

2.	ibid. p29. 

3.	ibid. pp29-30. 

4.	ibid. p30. 

5.	Albinson, Folke, Training for Co-operative Leadership, Swedish
Co-operative Centre, August, 1993, p.70. 

6.	ibid. pp86-87. 

7.	ibid. p72. 

8.	Final Report, Meeting of Experts on Co-operatives, Enterprise and
Co-operative Development Department, ILO, Geneva, 29th March to 2nd
April, 1993, p15.

9.	Report of the Meeting of Experts on Co-operatives, ILO, Geneva,
27th-29th May, 1993, p.10. 

10.	See Barker, Davis and Donaldson, Masters Degree by Distance
Learning in the Management of Co-operatives, Feasibility Study Project
Report, Universities of  Loughborough and Leicester Joint Teaching
Initiative, June, 1994.  

11.	See Davis and Worthington, `Co-operative Values: Change and
Continuity in Capital Accumulation. The Case of the Co-operative Bank.'
Journal of Business Ethics, 12:61-71,Kulwer Academic Publishers, 1993,
pp.61-71.  

12.	Volkers, Reimer, `Report on Management Systems and Corporate
Governance', in Review of International Co-operation, Vol.87, No.3,
1994, p45.