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Download (1MB) Kleanthous, Akis Steliou (2017) Co-operatives, credit unions and principles: a post 2008 critique. PhD thesis. http://theses.gla.ac.uk/8294/ Copyright and moral rights for this work are retained by the author A copy can be downloaded for personal non-commercial research or study, without prior permission or charge This work cannot be reproduced or quoted extensively from without first obtaining permission in writing from the author The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the author When referring to this work, full bibliographic details including the author, title, awarding institution and date of the thesis must be given Enlighten:Theses http://theses.gla.ac.uk/ [email protected] Co-operatives, credit unions and principles: a post 2008 critique Akis Steliou Kleanthous BSc, MBA, CIA, FCA Submitted in fulfilment of the requirements for the Degree of Doctor of Philosophy in Management. Business School College of Social Sciences University of Glasgow June 2017 Page 2 of 297 Abstract This thesis examines the adherence of credit unions to their co-operative principles. Noting the financial crisis of 2008 and the calls for change to a more ethical, transparent and fairer financial industry co-operatives appear to be a plausible way forward. The analysis of the corporate governance of co-operatives indicates that they are founded on co-operative principles, the cornerstone being the active participation by its members. The study of the previous literature demonstrates instances where co-operatives did not adhere to their principles as well as instances where members were not very active. Credit unions in Cyprus were selected as the specific co-operative industry and geographic location for the collection of data; one of the reasons being that in March 2013, six months prior to the first collection of data, Cyprus suffered a second financial crisis, giving the opportunity to investigate these two issues in a time of scrutiny and pressure. Structured interviews with thirty credit union employees, documents (statistics) from the ex-supervisory body and three focus groups with thirty members (in total) were carried out. The findings show that credit unions do not seem to adhere to their principles and members do not seem to be actively involved with their credit unions. As the warning bells for their long-term survival may have already sounded, credit unions must encourage their members to get involved, rebuild their trust amongst them, among membership and the society in general, provide co-operative-related training and restrict the involvement of the political parties. Finally, ways must be found so that credit unions remain closely involved with the societies they serve. To this extent, Service-Dominant Logic is proposed as a possible way in assisting credit unions to re-focus on their membership. Keywords: Co-operatives, credit unions, co-operative principles, member involvement/participation, corporate governance, Service-Dominant Logic. Page 3 of 297 Table of Contents List of Tables ................................................................................... 6 List of Figures .................................................................................. 6 Acknowledgements ............................................................................ 7 Author’s declaration .......................................................................... 8 List of Abbreviations .......................................................................... 8 Chapter 1: Setting the scene ................................................................ 9 1.1 Co-operatives .......................................................................... 9 1.2 Co-operative governance .......................................................... 11 1.3 Co-operative principles and research intent .................................... 13 1.3.1 Adherence to co-operative principles ....................................... 14 1.3.2 Members’ participation ....................................................... 16 1.4 Structure of present thesis ........................................................ 18 1.5 Summary ............................................................................. 19 Chapter 2: Co-operative governance and principles ................................. 21 2.1 Introduction ......................................................................... 21 2.2 Co-operative governance revisited ............................................... 21 2.2.1 Factors influencing the choice of governance model ..................... 22 2.2.2 Co-operative governance models ............................................ 24 2.2.3 Governance issues relating to the Board of Directors .................... 28 2.2.4 Other governance-related issues ............................................ 33 2.3 Co-operative principles revisited ................................................. 35 2.4 Co-operatives and S-D Logic ....................................................... 42 2.5 Research questions ................................................................. 47 2.6 Summary ............................................................................. 48 Chapter 3: Research intent and research questions .................................. 49 3.1 Introduction ......................................................................... 49 3.2 Qualitative research on the adherence to co-operative principles .......... 49 3.3 Researcher’s personal interest ................................................... 51 3.4 Research intent and research questions ......................................... 52 3.5 Contribution to existing knowledge and practice .............................. 56 3.6 Summary ............................................................................. 57 Chapter 4: Research context .............................................................. 59 4.1 Introduction ......................................................................... 59 4.2 The Cyprus context ................................................................. 59 4.2.1 The economy of Cyprus ....................................................... 62 4.2.2 Banking sector in Cyprus ...................................................... 64 4.2.3 The co-operative movement in Cyprus ..................................... 65 4.2.4 Are co-operative financial institutions in Cyprus credit unions? ........ 68 4.3 Calls for change in the financial industry ....................................... 71 4.4 Financial co-operatives as the industry to collect data ....................... 74 4.4.1 Financial co-operatives ....................................................... 74 4.4.2 Importance of financial co-operatives ...................................... 75 4.4.3 Financial co-operatives Vs investor-owned banks ......................... 77 4.4.4 Credit unions as the sector to collect data ................................ 82 4.4.5 Importance of credit unions .................................................. 83 4.4.6 Credit unions Vs investor-owned banks ..................................... 85 4.4.7 Credit unions in the UK ........................................................ 87 Page 4 of 297 4.5 Impact of research context on present research ............................... 93 4.6 Summary ............................................................................. 94 Chapter 5: Research methodology ....................................................... 95 5.1 Introduction ......................................................................... 95 5.2 Research Strategy ................................................................... 95 5.3 Paradigms ............................................................................ 96 5.4 Epistemology ........................................................................ 97 5.5 Ontology .............................................................................. 98 5.6 Research design ..................................................................... 98 5.7 Quality of Research ................................................................ 100 5.7.1 Reliability ...................................................................... 100 5.7.2 Replication ..................................................................... 101 5.7.3 Validity ......................................................................... 101 5.7.4 Triangulation and interviewees’ validation ............................... 102 5.7.5 Trustworthiness ............................................................... 104 5.8 Ethical issues ....................................................................... 105 5.8.1 Informed consent ............................................................. 106 5.8.2 Access and acceptance ....................................................... 107 5.8.3 Privacy .......................................................................... 107 5.8.4 Anonymity and Confidentiality .............................................. 108 5.9 Research methods ................................................................. 109 5.9.1 Interviews ...................................................................... 109 5.9.2 Individual interviews ......................................................... 109 5.9.3 Individual interviews in practice ............................................ 110 5.9.4 Interviews: Focus Groups ...................................................
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