The Implementation of Cooperative Policy: Perceptions from Cooperatives in the Umgungundlovu District Municipality (Kwazulu-Natal, South Africa)

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The Implementation of Cooperative Policy: Perceptions from Cooperatives in the Umgungundlovu District Municipality (Kwazulu-Natal, South Africa) THE IMPLEMENTATION OF COOPERATIVE POLICY: PERCEPTIONS FROM COOPERATIVES IN THE UMGUNGUNDLOVU DISTRICT MUNICIPALITY (KWAZULU-NATAL, SOUTH AFRICA) OKEM ANDREW EMMANUEL SUBMITTED IN FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY (POLICY AND DEVELOPMENT STUDIES), IN THE COLLEGE OF HUMANITIES AT THE UNIVERSITY OF KWAZULU-NATAL, SOUTH AFRICA SUPERVISOR: DR ANNE STANTON FEBRUARY 2016 Abstract The thesis explores the evolution of cooperative policies in South Africa and investigates the challenges experienced by cooperatives located in the uMgungundlovu District in KwaZulu- Natal, South Africa. The study adopted a cross-sectional qualitative design with twenty-six conveniently selected cooperatives. Representatives of the participating cooperatives were interviewed face-to-face using a semi-structured questionnaire. This generated detailed empirical data that elucidated the challenges facing cooperatives in the uMgungundlovu District. These cooperatives operated in rural, poverty-stricken, underdeveloped locations. The study found that a number of challenges including a lack of finance, access to inputs, land, transport, market, income, knowledge, and skills hindered the success of these cooperatives. Unfortunately, many of these cooperatives are small in terms of membership and employees. As a result, they have not led to employment creation or local economic development in the uMgungundlovu District. The study also found that a majority of the participant cooperatives in the uMgungundlovu District cannot survive without ongoing government support. The study concludes that the dependence of these cooperatives on government support makes them non-viable, unsustainable, and not conducive to local economic development. The thesis recommends that the government redefine its relationship with the cooperative sector by focusing on creating an environment that fosters the growth of cooperatives rather than being at the forefront of the formation and support of cooperatives. This thesis argues that the nature of government’s relationship with cooperatives is essential in changing how cooperators perceive cooperatives. It recommends changing the perception that cooperatives are a government development programme, or a means to access government funding. Government needs to make it clear that cooperatives are member-owned, self-sustaining business entities. Although the literature suggests that networking is central to successful cooperative activity, this research indicates that participant cooperatives from the uMgungundlovu District do not engage in any meaningful networking activities. In the uMgungundlovu District, it was found ii that cooperatives are not only dependent on government funding; they are not intent on establishing collaborative relationships with other cooperatives. On the contrary, they regard other cooperatives as rivals, competing for government grants and hence many do not trust or collaborate with other cooperatives. In addition, cooperatives are located in extremely poor and underdeveloped environments. The competition among cooperatives for access to funding is therefore high. Furthermore, networking with other cooperatives is difficult in the uMgungundlovu District for a number of reasons (namely, vast geographical distances between cooperatives; the competition for government tenders; the political and religious differences in the local community; and lack of experience and skills in governing cooperatives). The study proposes a renewed emphasis on educating and capacitating cooperatives to value and engage in productive networking activities. To facilitate cooperation among cooperatives, it is recommended that training and support offered to cooperatives is tailored towards emphasising the values and benefits of networks. This can be achieved through the provision of support to groups of cooperatives in order to create networking opportunities that will foster collaboration among cooperatives. iii Declaration 1: Plagiarism I, Okem Andrew Emmanuel declare that: (i) The research reported in this thesis, except where otherwise indicated, and is my original work. (ii) This thesis has not been submitted for any degree or examination at any other university. (iii) This thesis does not contain other person’s data, pictures, graphs or other information, unless specifically acknowledged as being sourced from other persons. (iv) This thesis does not contain other person’s writing, unless specifically acknowledged as being sourced from other researchers. Where other written sources have been quoted, then: (a) their words have been re-written but the general information attributed to them has been referenced; (b) Where their exact words have been used, their writing has been placed inside quotations marks, and referenced. (v) Where I have reproduced a publication of which I am an author, co-author or editor, I have indicated in detail which part of the publication was actually written by myself alone and have fully referenced such publications. (vi) This thesis does not contain text, graphics or tables copied and pasted from the Internet, unless specifically acknowledged, and the source detailed in the thesis and in the references section. ____________________________________ Student: Okem Andrew Emmanuel As the candidate’s supervisor, I certify the above statement and have approved this thesis for submission __________________________________ Supervisor: Dr Anne Stanton iv Declaration 2: Publication Okem, A. E., and Lawrence, R. (2013). “Exploring the Opportunities and Challenges of Network Formation for Cooperatives in South Africa”. KCA Journal of Business Management, Vol. 5(1), 16-33. v Acknowledgements I am extremely grateful to my supervisor, Dr Anne Stanton for stepping in after the retirement of Professor Ralph Lawrence, the first supervisor of this thesis. Your useful insights, suggestions, critiques and comments are highly appreciated. My sincere gratitude goes to Professor Ralph Lawrence who began this journey with me. Your support and encouragement in the preliminary phase of the thesis is much valued. I owe my gratitude to my brother, Okem Ambrose for the late night calls to check on my progress. To my parents and siblings, I say thank you for your support and encouragements. Thanks to friends and colleagues (Oyowe Anthony, Andrew Eloka-Eboka, Dorcas Ettang, Lucky Asuelime, and Catherine Egbe) for the nagging question “how far with the thesis?” Your constant nagging kept me on my toes and reminded me of the need to complete the thesis. My gratitude also goes to Mzolisi Vongogo and Nthokozo Kunene for their assistance during the fieldwork. Your dedication and hard work in taking me round rural areas of KwaZulu-Natal is highly appreciated. To my wife, Anisa, I say thank you for your support and understanding of the late nights and the many weekends spent on campus. I acknowledge the following financial assistance in the course of the study: 1. University of KwaZulu-Natal Doctoral Research Grant (2011) 2. Denis E. Hurley Scholarship (2011) 3. School of Social Science Doctoral Scholarship (2012) This acknowledgment will not be completed without acknowledging the Grace of God that has guided me thus far and will continue to lead me on. vi Table of Contents ABSTRACT ......................................................................................................................... II DECLARATION 1: PLAGIARISM .................................................................................. IV DECLARATION 2: PUBLICATION ................................................................................. V ACKNOWLEDGEMENTS ................................................................................................ VI LIST OF TABLES ............................................................................................................. XII LIST OF FIGURES ......................................................................................................... XIV ACRONYMS ..................................................................................................................... XV CHAPTER 1 ......................................................................................................................... 1 BACKGROUND TO THE STUDY, RESEARCH OBJECTIVES, RESEARCH METHODOLOGY AND THESIS OUTLINE ..................................................................... 1 1.1 INTRODUCTION 1 1.2 BACKGROUND TO THE RESEARCH PROBLEM AND JUSTIFICATION FOR THE RESEARCH 1 1.3 CONTEXT OF THE STUDY 6 FIGURE 1.1: MAP OF THE NINE PROVINCES OF SOUTH AFRICA 7 1.4 PURPOSE OF THE STUDY AND RESEARCH OBJECTIVES 8 1.5 RESEARCH METHODOLOGY 9 1.5.1 Data Collection Methods 11 1.5.2 Study Sample 13 1.5.3 Ethical Considerations 14 1.5.4 Data Analysis 15 1.5.5 Validity and Reliability 16 1.6 LIMITATIONS OF AND REFLECTIONS ON THE OVERALL RESEARCH PROCESS 17 1.7 STRUCTURE OF THE THESIS 18 1.8. CONCLUSION 20 CHAPTER 2 ....................................................................................................................... 21 CONCEPTUALISING COOPERATIVES: A LITERATURE REVIEW OF THE COOPERATIVE MOVEMENT AND PRINCIPLES OF COOPERATIVES .................. 21 2.1 INTRODUCTION 21 2.2 ORIGINS OF THE COOPERATIVE MOVEMENT 21 2.3 DEFINING CHARACTERISTICS OF COOPERATIVES 23 vii 2.3.1 Principles and Values of Cooperatives 25 2.3.1.1 Voluntary and Open Membership 25 2.3.1.2 Democratic Member Control 26 2.3.1.3 Member Economic Participation 26 2.3.1.4 Autonomy and Independence 26 2.3.1.5 Education, Training
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