REVIEW

VOLUME 96 Nº 2 2003

VOLUME 97 N° 1/2004

REVIEW OF INTERNATIONAL CO-OPERATION

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ICA Committee on Co-operativeResearch (ICACCR)

A thematic committee of the International Co-operative Alliance, the ICA Committeeon Co-operative Research is made up of a network of individual researchers from overtwenty countries in Europe, Asia and America.

The Committee acts as a bridge between academic research and the co-operative worldand aims to strengthen activities and make the work of researchers more visible. Selected papers from each conference will be published yearly in the Reviewof International Co-operation.

International Research Conferences are held every two years where possible in conjunction with ICA global meetings (General Assembly and/or Congress) andRegional Research Conferences are held regularly and where possible in conjunctionwith ICA Regional Assemblies.

Opinions expressed in this publication are not necessarily those of theleadership and management of the ICA.

Contents may be reprinted without permission, but citation of source isrequested and three copies of the publication concerned should be sent toICA Review, 15, route des Morillons, 1218 Grand-Saconnex, Geneva,Switzerland.

Editorial and administrative office :

International Co-operative Alliance15, route des Morillons, CH-1218 Grand-Saconnex, GenevaSwitzerlandTel : (41-22) 929 88 88; Fax : (41-22) 798 41 22E-mail : ica@ica.coop

The Review of International Co-operation is also available in Spanish fromIntercoop Editoria Cooperative Ltda., Moreno 1733/41, 1093 Buenos Aires,Argentina.

Review of International Co-operationVol. 97 No 1/2004

Editors : Akira KurimotoGarry Cronan

Editorial Assistant : Patrick Sullivan Vaucher

Contents

Editorial by Akira Kurimoto and Garry Cronan . . . . . . . . . . . . . . . . . . . . . . . . . 3

Non-Traditional Analysis of Co-operative Economic Impacts : Preliminary Indicators and a Case Study by Jessica Gordon Nembhard . . . . . 6

Corporate Social Responsibility and Co-operation by David Seaman . . . . . 22

Accountability, Accounting and Credit Unionsby Noel Hyndman and Donal McKillop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Aboriginal Co-operatives in Canada by Lou Hammond-Ketilson . . . . . . . . . . 38

People’s Participation in Implementing Housing Co-operative Projects,Cultural Distinction, Emerging Trends, Factors for Sustainability : The Philippine Experience by Hilda Felipe-San Gabriel . . . . . . . . . . . . . . . . . . 48

Using Co-operative Child Care to Address the Needs of Rural Residents near Affordable Housing Developments by E. Kim Coontz and Elizabeth Esper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Perceptions of Female Leadership from Three Co-ops in British Colombia by Cheryl Lans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

Making the Social Economy Work within the Global Economy by Mikel Cid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

Companies in Crisis – Worker’s Self Management by Gabriel Fajn . . . . . . . 93

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This issue contains 9 papers by co-oper-ative researchers from 7 countries. Oneis drawn from the Asia-Pacific Co-oper-ative Research Conference held inCebu, the Philippines in February 2003and all others are selected from paperspresented at the International Co-oper-ative Research Conference held inVictoria, Canada in May 2003. The former conference was organizedin conjunction with the Regional Co-operative Forum and ICA RegionalAssembly. It attracted 60 researchersand co-operative leaders from 15 coun-tries and featured themes “Impact ofGlobalization to Co-operative Devel-opment” and “Gender Integration forWider Community Participation in Co-operative Activity”. The latter conference on “Mapping Co-operative Studies in the New

Millennium” was organized by theBritish Columbia Institute for Co-oper-ative Studies, the Canadian Associationfor Studies in Co-operation and the ICAResearch Committee. Over 150researchers attended the conference,this was the largest meeting ofresearchers in the field ever held.It featured over 95 papers and presenta-tions from more than 20 countries. The focus of this conference was onmapping the emerging field of co-oper-ative studies. Several aspects relating toco-operative studies were examinedincluding its capacity to bridge theoryand practice. In addition to theEuropean approaches of social econ-omy and social enterprises, the NorthAmerican approaches including trans-action cost theory or new institutional

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Editorial

Welcome to the latest edition of the ICA Review

economics were presented. So the pri-mary goal of furthering discussion onthis emerging field was achieved. Prof.Ian MacPherson chairing the confer-ence plans to publish several volumesout of these papers. The papersincluded in this collection focus partic-ularly on the practical aspects of co-operation. If there is one theme that unites thesepapers it is about the co-operative dif-ference. Ways of understanding it,measuring it and putting it into practice. The nine papers fall into three broadgroupings. The first three papersaddress how co-operatives and creditunions measure their performance,financial and otherwise and how theyare linked with issues such as corporatesocial responsibility. The second groupof three papers examines very practicalaspects of co-operative operation,including aboriginal co-operatives inCanada, housing co-operatives in thePhilippines and child care co-opera-tives in the US. The last group of papersranges across several topics includingperceptions of female leadership inCanadian co-operatives, making thesocial economy work in a global envi-ronment and finally worker co-opera-tives in Argentina.Jessica Gordon Nembhard notes in herexcellent paper the impact of co-opera-tive businesses on their members andcommunities is often transformational.Dr Nembhard sets out a case for as well as ways of measuring these non-traditional co-operative benefits. Shehighlights the positive human, social,cultural and environmental externali-ties and multiper effects of co-opera-tives and worker owned enterprises.

The paper proposes possible indicatorsand methods to measure such out-comes and impacts.David Seaman positions co-operativeswithin the topical debates on corporatesocial responsibility. He tracks howpublic confidence in for profit compa-nies is decreasing in the wake of recentcorporate collapses and scandals. Usingthe example of the UK Co-op group hemakes the point that co-operative’sbecause of their value base are in anideal position to win and retain publicconfidence. The Co-op Group’sFairtrade initiatives are proffered as acase study of how to do this. The third paper in this group by NoelHyndman and Donal McKillop is onaccountability and accounting withinthe UK Credit Unions. Their papersummaries some of the key themesfrom the first major research project onthe financial accountability of creditunions in the UK. They find that report-ing levels are mixed. This leads to thesuggestion that the future developmentof the sector in the UK may well dependon more detailed reporting by creditunions.Lou Hammond-Ketilson’s paper drawson the findings of an extensive socio-economic study into aboriginal co-oper-atives in Canada. The paper introducesthe context within which Aboriginal co-operatives exist, and draws not only onthe findings of the impact study but alsoeleven case studies to illustrate the con-tribution that co-operatives are makingwithin Aboriginal communities acrossCanada. In her paper on housing co-operativeprojects in the Philippines, HildaFelipe-San Gabriel highlights the role

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these organisations can play in address-ing what is a perennial problem for thecountry’s urban poor. Her paper docu-ments their struggle through people’sown voices. Specifically, it focuses onsocial capital formation in housing co-operatives. It highlights the importanceof people’s participation and the criticalrole of cultural background for theeffectiveness and sustaining of theseinitiatives.The role of co-operatives in childcare isexplored in Kim Coontz and ElizabethEsper’s paper. Their joint paper reportson an investigation into the feasibilityof using co-operative models of child-care to expand the availability of qual-ity child care at or near rural affordablehousing sites in California. They foundmost support for the parent co-opera-tive model. However, the authors notethat until model co-operative pro-grammes at housing developments arein place the proliferation of centres isunlikely. In the first of the third group of papersin this edition, Cheryl Lans presentsresearch she carried out on whetherexisting female leaders of co-operativesperceive differences between their lead-ership style and that of men. Theresearch based on a series of interviewswith female leaders in several BritishColumbia co-operatives concludes per-ceived differences of leadership styleexist. She offers a series of practical sug-gestions to address the issue of differentleadership styles. They include the pro-vision of additional material on gender

leadership styles in traditional start-upmanuals and the use of retired CreditUnion experts to sit on the Boards ofnew co-operatives. Mikel Cid’s paper draws on his PhDresearch into the effect of social respon-sibility on the competitiveness of globalmarket firms to address the question ofwhether one can make the social econ-omy work within this global economy.Using a case study approach headvances his hypothesis that a firmcompeting within global markets canreadily adhere to the seven ICA o-oper-ative principles and still be competitive. The final paper in this research editionof the ICA Review by Gabriel Fajnexamines the new social phenomenonof worker’s self management of compa-nies in crisis in Argentina. The papernotes that the last three to four years inArgentina have been a time of intensesocial struggle. A response to this hasbeen for the workers to take over themanagement of the company. Theauthor analyses this experience draw-ing on a survey of 85 such companies. Finally, we would like to thank PatriciaSullivan Vaucher who helped put thisedition together as Secretary of the ICAResearch Committee.

We hope you will find it interesting andenjoyable.

Akira KurimotoChair ICA Committee on Co-operativeResearch

Garry CronanManager Communications ICA

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* Jessica Gordon Nembhard, Ph.D., isAssistant Professor and economist in theAfrican American Studies Department,and The Democracy Collaborative at theUniversity of Maryland (UMd), CollegePark. She is also a consultant (formerlyResearch Director) to the Preamble Center,Washington, DC. From 1997-2000 she wasSenior Economist at Morgan StateUniversity’s Institute for Urban Research.Dr. Nembhard’s current areas of interestinclude democratic community-based eco-nomic development, alternative urbandevelopment strategies, cooperative eco-nomics, race and economic inequality,wealth inequality, and popular economicliteracy. jgnembhard@civilsociety.umd.edu

nomic, social and democratic skills,and leadership development throughco-operative ownership. Reporting onpreliminary research in communitieswithin the U.S.A., the paper proposespossible indicators and methods tomeasure such outcomes and impacts.The author also provides a case studyof the Federation of Southern Co-oper-atives/Land Assistance Fund.The impacts of co-operative businesseson their members and communitiesare often transformational. The abilityto measure and evaluate not justtraditional business achievements, butalso non-traditional benefits and the

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Non-Traditional Analyses of Co-operative Economic Impacts :Preliminary Indicators and a Case Study

by Jessica Gordon Nembhard, Ph.D*

AbstractThis paper explores ways to expandoutcome measurement and economicimpact analyses of co-operatives. Theauthor analyzes methods and conceptsto measure traditional and non-tradi-tional economic and non-market out-comes and benefits to co-op membersand their communities. In particular,the author examines positive human,social, cultural, and environmental“externalities” and “multiplier” effectsof co-operatives and worker-ownedenterprises. Included are preliminaryfindings about both individual andcommunity wealth accumulation andasset development, enhanced eco-

impacts of both on member-owners,customers (if separate) and thesurrounding community – i.e., on allthe stakeholders – is important tostrengthen co-operative enterprisesthemselves and the co-operativemovement as a whole. How to captureand illuminate such benefits is thechallenge. Understanding and docu-menting the full panoply of co-opera-tive outcomes requires and expandednotion of impacts and outcome meas-urement, and the creative use of inter-disciplinary and possibly newlydesigned tools. Social auditing andsocial accounting methods are increas-ingly being used to help capture andmeasure the human as well as the eco-nomic inputs to, outcomes of, and ben-efits from not-for-profit organizationsand co-operatives (see for exampleQuarter, et. al., 2002). Economists alsohave methods to examine and calcu-late the positive externalities andspillovers gained by communitiesfrom the presence of economic activity.This paper investigates ways and rea-sons to utilize, apply and adapt theseand other methodologies to analyzeco-operative impacts.I have begun to combine theoreticaland applied research on outcomemeasurement and evaluation ofeconomic impacts to co-operatives. Iuse participatory community-basedresearch to involve co-op members, co-op leaders and co-op developers inarticulating social, cultural and politi-cal as well as economic impacts, andidentifying relevant indicators tomeasure traditional and non-tradi-tional outcomes. In addition to gather-ing information from workshops and

presentations and discussions at con-ferences, I utilize case studies andannual reports to glean co-op impactsand benefits, and understand a co-op’smission and history. I also have begunto use informal interviews, and in thefuture plan to use more formal inter-views and focus groups, and formalsurveys to continue to tease out articu-lation of issues and indicators of out-comes and benefits.In this paper I delineate some of the kinds of indicators and measures that begin to illuminate co-operativeimpacts on members and communi-ties. I suggest ways to identify, docu-ment and evaluate the outcomes and economic impacts of co-operativebusinesses. I discuss what we arebeginning to know and understand,emerging concepts and indicators,continuing questions, and researchneeds. I then provide a specific exam-ple of a preliminary case study of theimpacts of the Federation of SouthernCo-operatives/Land Assistance Fund(FSC/LAF). I end with some conclu-sions.

Co-operative Outcomes and Benefits

Co-op leaders often articulate tradi-tional typical activities and benefitsthey provide their members. They areless likely to think “out of the box”about a wider variety of benefits andoutcomes, and often do not know theimpacts of their co-operatives on theircommunities. The situation is similarfor co-op developers and researchers.1Members, funders, government agen-cies, and researchers rarely ask for

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such information, but are beginning to.There are no or few established meas-ures or indicators, and until recentlythe co-operative movement did notfocus on such information. The socialaccounting field is beginning to helpquantify the value of volunteer laborand continuous education and trainingused and provided by co-operatives,and show how certain taxes, wagesand benefits can be considered distri-butions to communities. Outcomes that most co-operatives tra-ditionally report in addition to generalbusiness measures such as jobs, wages,revenues, assets, debts, inventory, are :

• a well trained board of directors; • education and training of members,

and sometimes the community,particularly through orientationbrochures, information boards, andsometimes a workshop;

• the provision of affordable andquality goods and services; and

• an incorporated business (establish-ing a business, getting to the launchor start up stage).

Almost all cooperators agree that thecommitment to democratic participa-tion, economic cooperation, and theprovision of specific affordable, highquality goods and services are whatmake them different from other busi-nesses, and the effort worth undertak-ing. Democratic participation anddemocratic economic decision making,being a decision maker in the business,having a say in co-operative gover-nance - are all considered major bene-fits of being a member of a co-opera-tive, and a major accomplishment ofco-operatives. There is much anecdotal

evidence of such activity and out-comes but little documentation.

Many new urban co-operativesinclude in their mission improving thequality of life and community empow-erment. Most members of co-opera-tives and leaders feel that the benefitstheir co-operative gives to the commu-nity are empowering. Conversationsand information are shared, especiallyabout new kinds of products and newways of doing business. Jobs areanchored in the community and localproducts supported. Good healthfullocal food or green energy are pro-vided. The pooling of resources isempowering. Many co-operatives alsotend to utilize local suppliers, shareresources with other co-operatives andwith community organizations andresidents. Many co-operatives taketheir commitment to “concern for com-munity” seriously, and put aside fundsfor community development and com-munity charities. However, such activ-ities, outcomes and impacts are rarelyquantified and documented.

Erdal (1999) finds that social healthand civic participation are positivelyrelated to measures of democraticownership in Italy. He compares threetowns with similar demographicswhich differ most in levels of co-oper-ative ownership. Similar comparisonscan begin to be conducted in the U.S. inareas with significant co-operativepresence. In addition, co-operativesare much less aware of the effects andimplications of their stability, as a busi-ness anchor in a local economy, in anincreasingly global economy (see forexample Williamson, et. al., 2002). Few

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have a sense of the ways their busi-nesses re-circulate dollars in the neigh-borhood and community. We still haveno good measures of this multipliereffect. However, co-operatives that areconscious about being good neigh-bours and citizens often are also con-scious about buying locally, hiringlocally, borrowing locally - all activi-ties which re-circulate dollars aroundthe community. Large corporations,franchises and branch offices tend tosend dollars and capital out of a com-munity without circulating muchwithin the community first.

I discuss in more detail below the fol-lowing outcomes and/or impacts:leadership development; civic partici-pation; policy and legislative advo-cacy; meaningful work, productivityand livable wages; wealth creation.

Education, Training, SkillDevelopmentCo-operatives are becoming moreaware of developing human and socialcapital among their members. Co-operatives often point to memberswho “grew into” a position or becamea leader within the organization oreven out in the community (PTAleader, credit union board chair, com-munity activist, etc.), but rarely articu-late this as an outcome or impact ofdemocratic ownership. Many worker-owned co-operatives include thedevelopment of human capital (skillsand knowledge development) andsocial capital (team work, solidarity,consensus building, and meeting facil-itation) in their training, and have

begun to share human and social capi-tal development strategies at regionaleducational and networking confer-ences. The Federation of Southern Co-operatives/Land Assistance Fundbought land and established a trainingand agricultural development centre,training thousands of people (includ-ing youth) annually in co-operativeprinciples, co-operative development,board development, credit uniondevelopment, agricultural and forestryskills FSC/LAF 2002a and 2002b).Childspace Management Group is aworker-owned nonprofit child care co-operative in Philadelphia, employinglow-income women and providinghigh quality developmental learningprograms for children.2 Childspaceuses its worker-owned child care cen-tres as demonstration sites and learn-ing laboratories in the region to facili-tate replication and create workerleaders in the field (see Clamp, 2002).

Co-op education, particularly formembers and board members, is oneof the first things every co-op accom-plishes. To begin to document, eventhe small efforts, co-ops could main-tain a check-list of the kinds of educa-tion they provide to their members(introductory “Coop 101,” generalbusiness orientation, board develop-ment), customers and the community;and the ways they provide it(brochures, bulletin board displays,workshops, on the job training). Co-operatives could also begin to track theactivities their members engage in out-side the co-operative. Other questionsto ask and impacts to documentinclude : if and how does the training

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co-operatives provide increase mem-bers’ skills, and how and does this helpindividuals, the co-operative and/orthe community; did the coop trainingprovide the person more confidenceand a job outside the co-operative ifneeded; did member’s financial liter-acy increase; did members use newskills in other areas of their life, civicparticipation, political engagement, athome, in religious institution, etc.

Leadership developmentLeadership development is oftenassumed but not well articulated.Many co-op members talk about feel-ing more comfortable actively partici-pating in their child’s PTA at school,engaging more with their child’steacher, starting a community-basedorganization or being a board memberfirst of the co-operative and then inother organizations in the community,running for office (and in other waysbeing more active and assuming lead-ership outside of the co-operativewhere the leadership was encouragedand groomed). Several of the staff of the Federation of Southern Co-oper-atives/Land Assistance Fund, forexample, believe that leadership devel-opment has been one of the organi-sation’s major accomplishments, inaddition to providing a means of mak-ing a living for, and improving thequality of life of many if not all theirmembers. Many former staff and/orcoop members went on to hold signif-icant positions in their region includ-ing: Congressional representatives,state and local legislators, county com-missioners, school board members,

program directors, and bank man-agers.

Weiss and Clamp (1992) find, by inter-viewing women worker-owners, thoseco-operatives “afford women a num-ber of important benefits, includingempowerment, leadership training,learning opportunities not available in traditional work settings, andincreased self-esteem” (p. 225). Someof the majority women members of theWatermark Association of Artisans inNorth Carolina, for example, becamegenerally active in their communities,completed college degrees, and servedon the local PTA after becoming mem-bers of the co-operative.3

Civic participationDemocratic participation and decision-making, as well as skill and leadershipdevelopment often spill over into other arenas, co-op members becomemore active in civic organizations andpolitics.

Greenberg’s (1986) study of thePlywood Co-operatives, for example,examines the relationship betweenworkplace democracy and politicalparticipation. He observes :

With the exception of voting, about whichno differences are found, worker-share-holders were significantly more active inall phases of political life than workers inconventional firms. Furthermore, the gapbetween workers in co-operatives and con-ventional firms increased over time, sug-gesting the existence of a political learningprocess. Finally, the data suggests that theexperience of participation by worker-shareholders in enterprise decision makingserves as the principal educative tool for

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political participation and increases in-volvement with various voluntary andcommunity organizations (p.131).

Nembhard and Blasingame (2002) findthat the political learning and governanceexperience from democratic workplaces helpto develop transferable skills and capacitiesin their members for increased political par-ticipation. “Co-op members and employeeowners become used to the transparencyand accountability in their own organiza-tions (open book policies, one member onevote, shared management, etc.). They cometo expect transparency and accountabilityand help re-create this in civil society andpolitical arenas.” Networking and workingtogether become normal behavior in similarsituations, and the skills to facilitate this aredeveloped in most co-op members. Co-oper-atives similarly develop and empoweryoung people (although more research isneeded in this area). Members of housingco-operatives are also found to be more civi-cally active (see for example Co-operativeHousing Coalition, 2000; and Kleine,2001).

To document increased civic engage-ment, questions can be asked aboutcommunity involvement, civic andpolitical engagement: are co-op mem-bers more involved in their communi-ties, join more organizations, assumeleadership, run for office, etc.? Do fel-low members or outsiders notice anincrease or notice greater involvementby co-op members ?

Policy and LegislativeAdvocacyWorker-owned co-operatives such asCo-operative Home Care Associates

(CHCA) in New York City, andChildspace are advocates in both thetraining and policy arenas. They bringtogether coalitions, for example, toinfluence policy to increase workingconditions, pay and benefits in theirindustry. CHCA helped to form TheNew York City Home Care WorkGroup to promote restructuring of theindustry; created the nonprofitParaprofessional Healthcare Institute toprovide training in this area and nowalso replication of the CHCA model;and is developing, in cooperation withother health care and consumer organi-zations, the nonprofit IndependenceCare System, Inc., to serve people withdisabilities who receive Medicaid(Glasser and Brecher, 2002). Childspacealso collaborates with unions, child careadvocates, other practitioners and thepublic sector to advocate for publicpolicies to support increased quality oflife for child care workers (Clamp,2002). The FSC/LAF has initiated andsupported legislation at the state andnational levels, and engaged in classaction suits, helping farmers file peti-tions and make legal claims (FSC/LAF,2002a).

Meaningful work/Livable wagesCo-ops often are able to provide mean-ingful work and a good work atmos-phere for their members and/oremployees. Levine and Tyson (1990)find that co-operatives provide supe-rior working conditions and that bothparticipation and ownership have apositive effect on productivity. Many ofthe worker-owned co-operatives, in

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particular, increase industry standardsin wages and benefits, as well as pro-vide self-management or team workbetween management and “labor,” jobladder opportunities, skill developmentand capacity building, and general con-trol over income and work rules.

Are wages in the co-operative higherthan in the industry, were higher wagesfor the sector or in the communityestablished to compete with the co-op’swages ? Were more opportunities foradvancement created in the co-opera-tive ? The answers to these questionsappear to be yes (see NCBA, 1998, forexample), although much moreresearch needs to be done. FifteenMutual Benefit Service Sector Co-oper-atives in California provide higherwages for members than the nationalminimum wage and wages higher thancomparable entry-level jobs (for theunskilled, non-English speaking immi-grants who are their members), engagein profit sharing, return surplus earn-ings to members, and provide someform of benefits (Nancy Conover,Frieda Molina, and Karin Morris, 1993).Childspace’s co-operatives provideabove average salaries for the industry,with full medical coverage, child careservices for all worker-owners, andaccess to a career ladder (Clamp, 2002;and “Providing Living Wages...,” 1998).Rainbow Grocery Co-operative, CheeseBoard, and Ink Works are also workerowned businesses which pay livingwages (above the industry average)with a variety of benefits often includ-ing vacation time and other leaves,health insurance, and/or retirementaccounts (see Off Center Video, 1999).

Here in addition to tallying the kinds ofbenefits, the increased monetary valueof the benefits can be added and we candevelop a multiplier to reflect theincreased benefits that go to membersand/or remain in the community. Howmany jobs were created, what kinds inthe co-operative itself and from theexistence of the co-operative, are otherbusinesses developed to service or sup-ply the co-operative, is a second store orbusiness opened ? Did credit unionsgive loans for new businesses or toexpand businesses – how many, whatkind, what jobs ? Business climatechanges within the organization, thesector or in the community can also benoticed and documented. Did relation-ships between companies in the com-munity or at the workplace improvebecause of the co-operative’s existenceor something specific that the co-opera-tive did ? There are many aspects tomeaningful work, and many ways thatco-operatives can be seen to contributeto that.

Wealth Creation

Many co-operatives are explicitly inter-ested in helping to create wealth in theircommunities, or at least helping theirmembers make good wages, savemoney, and find affordable low costproducts and services. Stable jobs,increased equity in the business,patronage refunds and other returns ontheir investment do provide member-owners with wealth, although this isoften difficult to document. The co-operative development community hasbegun to investigate the ways that eco-nomic co-operatives provide economic

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stability, wealth and quality of life totheir members and their communities,particularly in the forms of livingwages, and asset and equity develop-ment. Housing co-operatives, for exam-ple, provide homeownership opportu-nities for many people who might nototherwise be able to own a home ontheir own or can’t assume all the risk.Recent research suggests that home-ownership provides equity accumula-tion and tax advantages; and homeowners accumulate more wealth ingeneral than renters (NCBA, 1998, pp.27-31; AFL-CIO Housing InvestmentTrust, 2000; Co-operative HousingCoalition, 2000). Credit Unions alsohelp their members create, or accumu-late and store wealth through access tofinancial services, home and businessmortgages and loans, and throughinterest accumulation.

Survey’s and interviews with CEOsand directors about the history ofpatronage refunds and distribution sys-tems help give a picture of individualmember wealth creation through own-ership in co-operative businesses (forassets of farmer-owned co-operatives in1998 see Chesnick, 2000, for example).Co-operative business ventures andemployee ownership provide invest-ment and business ownership oppor-tunities, often to people who might nototherwise be able to afford such oppor-tunities as individuals. Worker-ownersof Co-operative Home Care Associatesearned annual dividends between $250and $500 on their initial investment of$1,000 during the first ten years in exis-tence (Shipp, 2000), and continue to dis-perse dividends as well as earn living

wages with benefits (setting the stan-dard for their industry). The ChildspaceDevelopment Training Institute main-tains an individual developmentaccount program (IDA) to promote sav-ings for its worker-owners in child care(those whose incomes are 200% or lessof the federal poverty level; Clamp,2002).

Successful co-operative businessescreate wealth and help their membersaccumulate wealth in addition to givingmembers control over income genera-tion, production and spending. How-ever, there is a tension in co-operativesbecause often the first mission is notwealth creation but rather the provisionof affordable quality products, oppor-tunity to produce, procure and/ormarket particular kinds of goods andservices, and workplace democracy.Studying and measuring wealth accu-mulation through co-operative owner-ship is difficult and raises questionsabout data collection and access to data,definitions, and measurement. Ques-tions arise about the distinctionsbetween income generation and wealthaccumulation. Even though we knowincome stability contributes to wealthaccumulation, we don’t know by howmuch or how significantly, and oftendistinctions are not made between thetwo. How have profit sharing or thepatronage refund and other additionalincome and disbursements from co-opmembership increase or enhancewealth of members, the co-operativeand the community ? How best do wemeasure individual wealth through co-operative ownership is another ques-

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tion. Is individual wealth from demo-cratic ownership significant ? Perhapsthe significant measure is the collectiveco-operative corporate wealth of theenterprise itself, access to assets andwealth, and the wealth that economicanchoring creates or disseminatesthroughout the community. In addi-tion, tensions between the goals ofaffordability and capital appreciationare significant. Many co-op membersare genuinely ambivalent aboutwhether or not they should be in thebusiness of appreciating assets. How domembers «legitimately» accumulatewealth and benefit from it if the goal ofthe co-operative is affordability or not-for-profit? These questions illustratehow much more research is needed inthis area (see Nembhard, 2002).

Even when difficult to identify individ-ual wealth creation, co-operatives doshow increased revenues and assetswhich increase corporate wealth andthus individual wealth from demo-cratic ownership. The National Co-operative Bank annually publishesstatistics on the top 100 revenuegenerating co-operatives in the U.S.These companies have generally beenincreasing their revenues and assetsover the past five years or more (espe-cially between 1998 and 2000). In 2001they generated over $130 billion in rev-enues. Total assets of these companiesrange from a high of $32 billion to a lowof $27 million in 2001 (the total for all100 of the co-operatives was $245.8 bil-lion). The average value of the assets ofthe Coop 100 in 2001 was $2.4 billion(see NCB, 2002, calculations by theauthor).

Affordable quality productsCo-operatives are proud of the benefitsthey provide to their members and thecommunities in the form of affordableand quality goods and services, some-times environmentally-friendly prod-ucts and practices. They often promotelocal products, inspire the communitywith a vision of the alternative, and pro-vide goods and services that neither thegovernment nor the private sector pro-vides or adequately or affordably pro-vides. This is particularly true in theareas of health food, organic food, alter-native and green energy, as well as childcare, home health care, and house clean-ing. Supporting local agriculture anddeveloping food buying clubs, for exam-ple, are being seen as community build-ing activities (“Building Community...,”1998), and help lessen food insecurity.

In addition to providing lists of the kindsof products co-operatives produce and/or sell, and the competitive pricing, co-opscould highlight the uniqueness and eco-logical benefits of the products they cre-ate and sell, and calculate affordability,savings and/or the value of ecologicaland sustainable goods and services eitherdirectly to the consumer, or to society.

The above provide many general exam-ples of the kinds of impacts and benefitsco-operatives provide for their membersand communities. Below is an example ofhow I begin to document this for oneorganization.

Case Study: The Federation of Southern Co-operatives/Land Assistance FundI have begun to work with the Fede-ration of Southern Co-operatives/Land

14

Assistance Fund (FSC/LAF) to helparticulate and measure the federationand its affiliate co-operatives and devel-opment centre’s impacts on their localcommunities.4 The FSC/LAF maintainsa comprehensive program for co-oper-ative economic development in sustain-able agriculture, land retention andacquisition, marketing, business andcredit union development, affordablehousing, education and training, youthdevelopment, international develop-ment, advocacy and policy develop-ment, institution building, and leader-ship development. The Fede-ration/LAF has held together a mem-bership of over 100 co-operatives, creditunions and community-based eco-nomic development organizations,involving 25,000 rural and low-income(mostly Black) families, including some10,000 family farmers owning a halfmillion acres of land. The Federation/LAF has grown from an organizationwith a budget of $547,473 in 1970 to$3,196,746 in 2001.

The Federation began in 1967 with 22 co-operatives and credit unions inseven southern states, many of whichwere organized through the civil rightsmovement. The co-operatives were pri-marily agricultural marketing and sup-ply, although there were some fishing,consumer, handicraft production,housing and others included. Over itsthirty-five year history, some 200 co-operatives, credit unions and commu-nity based economic development proj-ects in 14 states were organized andassisted by the Federation and its stateassociations of co-operatives. Currentlythere are 65 dues paying members and

another 30 inactive groups carried onour membership rolls.

Over 35 years the Federation/LAF hasleveraged resources five times theamount of direct funding raised (morethan $40 million). The FSC/LAF hasfacilitated the savings of more than$27.4 million by 14,000 people in mem-ber credit unions, assisted 5,000 Blackfarmers to save over 175,000 acres ofland, and assisted over 700 familieswith affordable housing. The Fede-ration/LAF has employed and trainedover 500 people in various positions,including VISTA volunteers, internsand employment trainees, which pro-vide skills, knowledge, awareness andsensitivity to work creatively on behalfof poor people. Many of the former staffwork in positions of significance in theregion, including: Congresspersons,state legislators, county commissioners,school board members, program direc-tors, bank managers, attorneys, socialworkers, college faculty, foundationstaff and other positions.

While the Federation/LAF has pro-vided services, learning and leadershipexperiences, saved family estates,reduced costs, increased revenues andenhanced stability for members(through producer, marketing, con-sumer and credit co-operatives), taughttechniques and skills all of incalculableworth, a beginning estimate of the addi-tional monetary impact of theFederation/LAF, for the past 35 years isover $300 million. This includes :

• $25 million of shares saved and $17.2in loans outstanding; and 50,154loans totaling $97.5 million loaned to

15

low income families since thesecredit unions began operations;

• $75 million in sales through co-oper-ative marketing; an average of $2.5million per year in sales for the pasttwo decades;

• $26 million worth of affordable hous-ing units constructed and rehabili-tated; including four multi-familyrental projects with 126 units;

• $50 million mobilized in resourcesfor support of member co-operativesand credit unions;

• $87.5 million worth of land savedand retained (175,000 acres at anaverage of $500 per acre).

The FSC/LAF’s land retention activitieshave not only allowed members to keepcontrol over inherited property but tomake a living from farming, engage insustainable agriculture, branch intoalternative crops, increase their farmincome, and decrease their off-farmincome (see Table 1). The organizationprovides training and legal services - allwhich contribute to income generation,wealth creation and quality of life inthese rural communities.

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ACRES VALUE

Saved 4054 $3,356,720

Purchased 1633.1 $1,408,550

1995 2000

Farms 125 192

Alternative crops 54% 87% (2001)

Avg gross income $40,665 $55,413

Off-farm income 64% 52%

Table 1 : FSC/LAF Land Retention since 1995

FSC/LAF-sponsored credit unionshave helped their members to gainaccess to financial services and credit,and even accumulate savings. While ithas continued to be a challenge tokeep these credit unions in business,especially when the large employersthat were sometimes a credit union’sbase leave the area, the majority of the FSC/LAF-sponsored credit unionshave remained in business and in-

creased their assets and number ofmembers (see Table 2). In addition,the number of shares that memberssaved continues to increase, althoughassets per member began to decreaseslightly between 2000 and 2001. Notshown in this table, assets per mem-ber did increase steadily between1997 and 1999 (more economicallybooming years).

Calculated by the author from information in FSC/LAF, 2002.

Through the FSC/LAF individualsand communities create opportunitiesfor themselves, find a safe haven andproductive work that not only facili-tate their economic well being andstability but also give them the sup-port they need to improve their livesand remain active in civil rights andpolitical arenas. Co-operative owner-ship provides meaningful and steady,profitable, work; access to financialservices; human capital developmentand a panoply of increased opportu-nities. In addition, the FSC/LAF pro-vides youth with skills, educationalopportunities and economic activitiesthat contribute to their becoming pro-ductive adults, good citizens, andpartners with adults in co-operativeenterprises. Having completed this initial analysisof gross accomplishments, I hope inthe next few years to be able to do themicro level analyses and data collec-tion which will enable us to furtherexamine the level of activity, types ofbenefits, economic impacts, and lead-ership and human capital develop-

ment from FSC/LAF’s member enter-prises in the areas of sustainable agri-culture, land retention, housing,credit unions and financial services,co-operative development and mar-keting, training, international devel-opment, and policy development andadvocacy.

ConclusionsMajor obstacles to helping co-opera-tives evaluate their outcomes andimpacts include lack of time and per-sonnel to engage in such activities,lack of adequate measurement toolsand models to apply, and lack of dataor data collection methods. Many co-operatives are preoccupied withsecuring their viability as a businessbased on traditional business evalua-tions. We researchers and academicscan be the ones to begin to focus onways to measure the externalities –the social benefits; the human, socialand cultural capital created and nur-tured the spillover effects around thecommunity. Some outcomes such asjob creation, buying from and out

17

Table 2 : FSC/LAF Credit Union Data 2000 and 2001

as of Dec. 2000 as of Dec. 2001

Members 12,140 14,633

Assets $23.3 million $27.4 million

Assets/member $1,923 $1,873

Member shares saved $19.35 million $22.45 million

Shares/member $ 1,594 $ 1,534

Outstanding loans $17.32 million $ 17.23 million

Total loans 50,154

Total value of loans $ 97.5 million

sourcing to other local businesses,development of affiliated businesses,increased skill levels are fairly easy tomeasure once we associate them withco-operative outcomes. Others suchas leadership development, morecivic participation, wealth creation,and general community economic sta-bility are more difficult to measure

and more difficult to attribute to co-operative ownership, yet seem to becorrelated. More research is neededon how to quantify these benefits asindicators/measures and how toprove cause and effect from demo-cratic co-operative ownership, notjust correlation. �

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References :AFL-CIO Housing Investment Trust. 2000. “Homeownership and WealthAccumulation.” Presented to the Joint 2000 Co-operative Development Forumand the Co-operative Housing Coalition, October 24, Washington, DC (NCBA).Bromell-Tinubu, Gloria. 1999. “Individual and Community Asset-Buildingthrough Co-operative Enterprises : Economic and Social Justifications.” Paperpresented at the National Economic Association/ASSA Annual Meetings, NewYork, NY, January 3-5.“Building Community with Affordable, High Quality Food. “ 1998. Journal ofCo-operative Development 1:1 (Spring) : 6-8.Chesnick, David S. 2000. “Asset Growth for Largest Co-ops Shows Resilienceto Declining Revenues.” Washington, DC: United States Department ofAgriculture, Rural Development, January. www.rurdev.usda.gov/rbs/pub/jan00/asset.htm.Clamp, Christina A.. 2002. “Case 5 : Childspace Development TrainingInstitute, Philadelphia.” In Jonathan M. Feldman and Jessica G. Nembhard(moderators), “A Discussion about the Requirements of a New Approach toDemocratic Community Development by Scholars in the United States andEurope,” pp. 47-48. In J.M. Feldman and J.G. Nembhard (eds.), FromCommunity Economic Development and Ethnic Entrepreneurship to EconomicDemocracy: The Co-operative Alternative. Umea, Sweden : Partnership for Multi-ethnic Inclusion. Clamp, Christina. No date. “Childspace Co-operative Development, Inc.”Mimeo (Power Point presentation), Southern New Hampshire University.Conover, Nancy, Frieda Molina, and Karin Morris. 1993. “Creating JobsThrough Co-operative Development,” The National Economic Developmentand Law Center, The University of California, Davis, March.Co-operative Housing Coalition. 2000. “People Building Communities :Affordable Co-operative Housing.” Washington, DC: Co-operative HousingCoalition, 2000.

Du Bois, W.E.B. 1907. Economic Cooperation Among Negro Americans. Atlanta :Atlanta University Press.Erdal, David. 1999. “The Psychology of Sharing: An Evolutionary Approach.”Ph.D. dissertation. University of St. Andrews, UK, October.Fairbairn, Brett, June Bold, Murray Fulton, Lou Hammond Ketilson, Daniel Ish.1991. Co-operatives & Community Development : Economics in Social Perspective.Saskatoon, Saskatchewan : University of Saskatchewan Center for the Study ofCo-operatives, revised 1995.Federation of Southern Co-operatives/Land Assistance Fund (FSC/LAF).2002a. Author’s (Nembhard) notes from a meeting to discuss the 35 yearimpact of the Federation, with Ralph Paige, John Zippert, Jerry Pennick, andHeather Gray. April 11, 2002. Federation of Southern Co-operatives/Land Assistance Fund. 2002b. 35th Anni-versary - 2002 Annual Report. East Point, GA: FSC/LAF, 2002.Federation of Southern Co-operatives/Land Assistance Fund. 1992. 25th Anni-versary, Annual Report 1967-1992. Atlanta, GA: FSC/LAF.Freedom Quilting Bee. 2002. www.ruraldevelopment.org/FQBhistory.html.Accessed September 30, 2002.Glasser, Ruth, and Jeremy Brecher. 2002. We are the Roots: The Organization andCulture of a Home Care Co-operative. University of California, Davis: Center forCo-operatives.Greenberg, Edward S. 1986. Workplace Democracy: The Political Effects of Parti-cipation. Ithaca and London, Cornell University Press, 1986.Kleine, Doug. 2001. “Urban Housing Co-operatives - benefits beyond thewalls.” Journal of Co-operative Development 2 : 4 (Spring): 12-13 & 16.Krimerman, Len, and Frank Lindenfeld, eds. 1992. When Workers Decide :Workplace Democracy Takes Root in North America Philadelphia : PA: NewSociety Publishers.Krimerman, Len, Frank Lindenfeld, Carol Korty, and Julian Benello, eds. 1992.From the Ground Up : Essays on Grassroots & Workplace Democracy by C. GeorgeBenello. Boston: South End Press.Lee, Jinkook, and William A. Kelley, Jr. 2001. Who uses Credit Unions ? SecondEdition. Madison, WI : Filene Research Institute.Levine, David, and Laura D’Andrea Tyson. 1990. “Participation, Productivityand the Firm’s Environment,” in Alan Blinder (ed.) Paying for Productivity : ALook at the Evidence, pp. 205-214. Washington, DC: Brookings Institute.MacNeil, Teresa and Rick Williams. 1995. “Evaluation Framework forCommunity Economic Development.” A Report Prepared for National WelfareGrants.National Co-operative Bank. 2002. “NCB Co-op 100.” Brochure, Washington,DC: National Co-operative Bank.

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National Co-operative Business Association (NCBA). 1998. “Co-operativeApproaches to a Living Wage : Reducing Costs and Enhancing Income.” 1998Co-operative Development Forum, October 28-31, Atlanta Georgia.Washington, DC: National Co-operative Business Association.

National Credit Union Administration, www.ncua.gov.

Nembhard, Jessica Gordon. Forthcoming. “Entering the New City as Men andWomen, Not Mules.” In Lewis Randolph and Gail Tate (eds.), The Urban BlackCommunity.

Nembhard, Jessica Gordon. 2002. “Co-operatives and Wealth Accumulation:Preliminary Analysis.” American Economic Review 92: 2 (May): 325-329.

Nembhard, Jessica Gordon. 2000. “Democratic Economic Participation andHumane Urban Redevelopment.” Trotter Review: 26-31.

Nembhard, Jessica Gordon and Anthony A. Blasingame. 2002. “EconomicDimensions of Civic Engagement and Political Efficacy.” Working Paper.Democracy Collaborative-Knight Foundation Civic Engagement Project,University of Maryland, College Park, December.

Off Center Video. 1999. “Democracy in the Workplace: Three Worker-OwnedBusinesses in Action.” Berkeley, CA: Off Center Video, 26 minutes. Awardedthe Bronze Apple award of excellence, by the National Educational MediaNetwork Film Festival 1999.

Pastor, Manuel. 2001. “Building Social Capital to Protect Natural Capital: TheQuest for Environmental Justice.” Program on Development, Peacebuilding,and the Environment, Political Economy Research Institute, University ofMassachusetts, Amherst, January.

Providing Living Wages for Childcare Workers.” 1998. Journal of Co-operativeDevelopment 1:1 (Spring) : 4-5.

Quarter, Jack, Lauri Mook, and Betty Jane Richmond. 2002. What Counts: SocialAccounting for Non-Profits and Co-operatives. Indianapolis, IN : Prentice Hall.

Shipp, Sigmund C. 2000. “Worker-Owned Firms in Inner-City Neighborhoods :An Empirical Study.” Review of International Cooperation 92-93 : 4/99-1/00(March) : 42-46.

USDA. 1985. “What are Patronage Refunds ?” Agricultural Co-operativeService. Co-operative Information Report Number 9. Washington, DC: UnitedStates Department of Agriculture, revised January 1985, reprinted June 1993.

Weiss, Chris, and Christina Clamp. 1992. “Women’s Co-operatives : Part of theAnswer to Poverty ?” pp. 229-232. In Len Krimerman, Frank Lindenfeld, CarolKorty, and Julian Benello, eds. From the Ground Up : Essays on Grassroots &Workplace Democracy by C. George Benello. Boston : South End Press.

Williamson, Thad, David Imbroscio, and Gar Alperovitz. 2002. Making a Placefor Community : Local Democracy in a Global Era. NY: Routledge.

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Notes1. These generalizations derive from the author’s observations over the past

5 years; informal conversations and interviews with co-op members, co-opleaders and co-op developers; participation in and facilitation of co-opworkshops, wrap up sessions, and conferences around the United States;participation on national-level coop committees (particularly on outcomemeasurement and urban cooperative development); and literature reviewsand general scholarly research on cooperatives.

2. Based on Clamp, 2002, and No date; and “Providing Living Wages for ChildCare Workers,” 1998.

3. From Carolyn McKecuen, in Krimerman and Lindenfeld 1992, p. 25.4. Information from this case study comes from FSC/LAF, 2002a, 2002,b and

1992.

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IntroductionThis short paper is based on a presen-tation given at the Mapping Co-oper-ative Studies in the New MillenniumCongress. It covers the emergence ofcorporate social responsibility as amajor and fashionable subject in busi-ness. The view is put forward thatthere is a growing alignment of thethemes of corporate social responsi-bility and the values and principles ofco-operation. This is illustrated by theactivities of the Co-operative Groupin relation to Fairtrade products.

Ethics in businessThe concept of ethics in business isnot new and can be found in theQuaker owned businesses such asCadbury’s and Rowntree’s and thework of Robert Owen in Lanarkshire.The Rochdale pioneers had a strongethical stance in their store at ToadLane offering the “purest provisionsprocurable” at a time when adulter-ated food was the norm.

Declining trust in businessWe live in an age where anti-corpo-ratism is chic. There have been awhole series of books starting withNaomi Klein’s “No logo” and includ-ing “The Silent Takeover” by NoreenaHertz and “Captive State : The Cor-porate Takeover of Britain” by GeorgeMonbiot that have attacked thebehaviour of modern day business.Evidence of this comes from theFuture Foundation who have moni-tored declining trust in companiesover the period 1980 to 2001. As canbe seen in Figure 1 the percentageagreeing that most companies are fairto consumers has fallen to below 40%.

22

Corporate Social Responsibilityand Co-operation

by David Seaman*

* David Seaman is Head of StrategyDevelopment, The Co-operative Group.

“And there is no new thingunder the sun”

Ecclesiastes. Chapter 1, Verse 8

Figure 1

In particular it is the “baby boomer”generation who are particularly cyni-

Figure 2

23

Source: nVision, Future Foundation//Taylor Nelson Sofres

Decreasing trust in companies?

Do you agree that most companies are fair to consumers?70%

1980

1986

1996

2001

60%

50%

40%

30%

20%

10%

0%Agree Neither Disagree

40%

35%

30%

25%

1980

pre-1935 1936-1945 1946-1955 1956-1965

year ofbirth

2002

20%

15%

10%

5%

0%

% who disagree that most companies in the UK are fair to consumers, by birth cohort

Please indicate how much you agree or disagree with the statement: “most companies in this country are fair to consumers.”

Source: ’Changing Lives’, nVision/Taylor Nelson Sofres Base: 1000-2000 adults 16+, UK

Cynicism is on the increase

© the future foundation

Consumers are also prepared to takedirect action and demonstrate if amulti national company had donesomething wrong. Figure 3 showsthat around a third of consumerswould be prepared to demonstrate

against companies’ wrong doings.Between 50 and 60 percent would beprepared to boycott the products ofcompanies who had done somethingwrong. (See Figure 4).

cal about companies being fair to con-sumers as shown in Figure 2.

24

Figure 3

Figure 4

Proportion who agree that they would demonstrate if a multinational company had done something wrong, by age

Please say how much you agree or disagree with statement “I would demonstrate if a large multinational company had done something wrong”

Attitudes to companies' wrong doings

Source: ’Changing Lives’, nVision Base: 1000 adults 16+, UK © the future foundation

40% 2000 2001 2002

35%

30%

25%

20%

15%

10%

5%

0%All 16-24 25-34 35-44 45-54 55-65 65+

Proportion who agree or agree strongly that they would not buy the products of a multi-national company who had done something wrong, by age and gender

Please say how much you agree or disagree with statement “I would not buy the products of a large multi-national company who had done something wrong”

Attitudes to companies' wrong doings

Source: ’Changing Lives’, nVision Base: 1000 adults 16+, UK © the future foundation

2000 2001

All

70%

60%

50%

40%

30%

20%

10%

0%16-24 25-34 35-44 45-54 55-64 65+ Men Women

The percentage of consumers who feelthat in making a decision to buy aproduct or service it is very or fairlyimportant that the particular com-pany shows a high degree of social

responsibility has risen from 70% to82%. Particularly noteworthy is therise in the percentage thinking it isvery important which has climbedfrom 24% to 44% (see Figure 5).

25

Figure 5

The Co-operative Bank has workedwith market research agency MORI to

Figure 6

Q. When forming a decision about buying a product or service from a particular company organisation, how important is that it shows a high degree of social responsability ?

Impact of Purchase

Base: 976 GB adults 16+ July – August 2002 Source: MORI

Very important Fairly important

44% 42%

24% 46%

2002

1997

The Five Clusters of Ethical Consumer

Source: MORI / The Co-operative Bank – October 2000

‘Look after my own’22%

‘Brand Generation’6%

‘Global Watchdogs’5%

‘Do what I can’49%

‘ConscientousConsumers’

18%

The largest segment (49% of the total)are the “Do What I Can “ group. Thisgroup has ethical concerns but doesnot hold them very strongly. They arethe most active recyclers of household

waste but otherwise their altruism islimited. They are unlikely to buy oravoid products because of a com-pany’s reputation for responsibility,but look for recycled products and, to

produce five different types of ethicalconsumer (see Figure 6).

Ethical Consumer Typologies

a lesser degree, GM free items. MORIdescribes them as semi-detached, interms of the homes they live in and theattitudes they hold.

The second largest group is the “LookAfter My Own” segment (22%). Theyare the least concerned with social, eth-ical or environmental causes. Theyfeel powerless and would not regardthemselves as ethical consumers.

The third major grouping at 18%, the“Conscientious Consumers” are moreupmarket. They are more likely thanthe two previously mentioned groupsto be concerned about ethical issues,especially the treatment of workersand companies’ environmental impact.Being interested in companies’ behav-iour, they will both buy and avoidproducts because of companies’ repu-tations.

At the cutting edge of ethical con-sumerism are the “Global Watchdogs”.

This segment is ethical hardliners. Theyare members of campaign groups, theybuy and boycott on ethical grounds andtalk to friends about issues.The “Brand Generation” is branddriven with little time for ethical issues.

Components of CorporateSocial ResponsibilityCorporate Social Responsibility is awide ranging term that embraces anumber of different areas.It includes the promotion of ethical con-sumerism, charitable giving, the treat-ment of the customer, involvement inthe community, the relationship withemployees, socially responsible invest-ment and cause related marketing. Allthese can coalesce to create the trust-worthy corporate citizen. The CSRkaleidoscope shown in Figure 7 illus-trates the many faceted aspects of cor-porate social responsibility.

26

The components of Corporate Responsibility

Treatment of customers

Treatment of employees

CommunityInvolvement

Charitable giving

Ethical Consumerism

TRUSTWORTHY CORPORATE

CITIZEN

Environment

Socially ResponsibleInvestment

Cause Related Marketing

Source: MORI

Figure 7

The notion of Citizen BrandsIn an excellent book Michael Willmot ofthe Future Foundation has introducedcitizen brands as an alternative and,possibly, more appealing term to cor-porate social responsibility. In his bookentitled “Citizen Brands”, Michael Will-

mot argues that being a citizen brandinvolves “putting society at the heart ofyour business”.This brings both direct and indirectimpacts and these can be shownschematically. (see Figures 8 and 9).

27

Figure 8

Figure 9

Direct Impacts of being a Citizen Brand

Source: Citizen Brands, Michael Willmott/Future Foundation, 2001

More motivated workforce

Better/moretrusted supplier

relationships

Improved market/business

intelligence

Active purchasers/ fewer boycotts

All aiding greater innovation

More efficient processes

Direct impacts

Indirect Impacts of being a Citizen Brand

Source: Citizen Brands, Michael Willmott/Future Foundation, 2001

Increases perceived quality

Creates ‘goodwill’ bank

Greater loyalty = higher value customers

Builds reputation / trust

Indirect impacts

The Co-operative Group as a corporate citizen

The Co-operative Group is the largestconsumer co-operative in the world.In the UK, the Group employs over70,000 people, operates more than3,000 retail outlets as well as on lineand business to business operations.In 2002, the sales topped £7.7 billion.The Co-operative Group has taken a

number of specific initiatives todemonstrate its Co-operative valuesby championing a responsible way ofdoing business.The scope of the Co-op’s “champi-oning” role ranges from issues affect-ing an individual and her familythrough to matters of internationalimportance such as the deployment ofcluster bombs. Figure 10 makes thispoint.

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The scope of the Co-op's “championing” role ranges from the individual to wider society.

“Championing”

Safe Food

Honest Labelling

Sond Sourcing

Cluster Bombs

Affects Wider Society

Affe

cts

Me

Figure 10

The Co-operative Group and Fairtrade

The mission of the Co-operative Groupis to be the world’s most successful con-sumer co-operative business. The guid-ing values and principles of Co-opera-tion have strong links to those ofFairtrade. The relevant values areequality, self help, solidarity and socialresponsibility allied to principles suchas autonomy and independence, con-

cern for the community, education andinformation and co-operation amongstco-operatives all chime with Fairtrade.The Co-operative Group has the objec-tive of being the leading supermarketsupporter of Fairtrade. Equally impor-tant is to bring Fairtrade into the main-stream of UK retailing. The first step to achieving this objectivewas taken in January 1999 with a strate-gic stocking move. The intention was tocarry a selection of Fairtrade produce in

all Co-operative grocery stores. Thishad the effect of dramatically increas-ing the availability of Fairtrade prod-ucts and resulted in the Co-op havingmore outlets selling Fairtrade productsthan any other retailer. A further breakthrough occurred inJanuary 2000 when the Co-op becamethe first UK retailer to introducedFairtrade bananas. In March 2000 theCo-op launched the UK’s first ownbrand trade product, a chocolate bar.This was followed in September 2000by the first own brand Fairtrade coffeeand in February 2001 the Co-op becamethe first supermarket of offer a fairlytraded wine. This had the memorableslogan “We trample the grapes not thegrowers”.Other Fairtrade Co-op brand productshave been added; mangoes (January2002), white chocolate (March 2002),instant coffee (September 2002), choco-late cake (October 2002) and pineapples(December 2002). These moves havebeen supported by press advertising toincrease consumer awareness, andmedia coverage has targeted opinionformers. Co-operative customer mem-bers have been particularly supportiveof the move.

The Co-operative FairtradeCase StudyIn December 2002 the Co-operativeGroup was involved in a specific initia-tive to promote Fairtrade chocolate.This involved visiting the Kuapa KokooCo-operative in Ghana accompanied bya BBC film crew. The intention was thatall Co-op brand block chocolate was tobe fairly traded in origin. To highlightthe move a chocolate report was made

available which campaigned for Fair-trade and argued for an end to exploita-tion.The Co-operative initiative lead to adoubling of the UK Fairtrade chocolatemarket. It increased Kuapa’s Fairtradesales by 30% and provided the growerswith the stability of a long term con-tract.The move to make the Co-op brandchocolate range a Fairtrade offeringwas widely acclaimed in the mediaand the Co-operative Group and thecause attracted a great deal of positivepublicity.

Social Reporting PracticeAs a responsible organisation, the Co-operative Group is committed toreporting on its activities in this area.So in 2004, the Co-operative Group planto publish a social accountability report. A set of key performance indicators hasbeen developed which can be measuredthroughout the Group and reported onannually. The key performance indica-tors will offer a Group wide view as toprogress in overall commercial, socialand environmental performance. Acti-vity in relation to Fairtrade will providea major input into this monitor.

ConclusionIt is hoped that the activity in relation toFairtrade carried out by the Co-opera-tive Group demonstrates the fitbetween corporate social responsibilityand Co-operation. The current environ-ment of the early 21st century areuniquely conducive to the values of Co-operation, benefiting people’s lives as well as bringing commercialadvantage. �

29

* Noel Hyndman is Professor of ManagementAccounting in the School of Managementand Economics at Queen’s UniversityBelfast. A Fellow of the Chartered Instituteof Management Accountants. His mainresearch interests centre on performancemeasurement, performance reporting andmanagement accounting in not-for-profitorganizations. Public sector organizations,charities and credit unions have provided aparticular focus for his research.

* Donal McKillop is Professor of FinancialServices in the School of Management andEconomics at Queens University. Heteaches on the undergraduate and postgrad-uate programmes in Finance at Queens.Professor McKillop is currently involved,along with a number of colleagues in severalresearch projects focused on the performanceof credit unions.

30

Accountability, Accountingand Credit Unions : A Study from the UKby Noel Hyndman and Donal McKillop*

Introduction Credit unions are member-owned,voluntary, self-help democratic insti-tutions that provide financial servicesto their members. As member-owned,not-for-profit organisations (NFPOs)

they are value-driven and committedto serving the financial services needsof disadvantaged communities andindividuals, many of whom havebeen abandoned by mainstreambanking. They have a distinct eco-

nomic and social philosophy, and areunique not-for-profit, financial, co-operative institutions. Their co-opera-tive credentials encompass a numberof attributes including open member-ship and democratic control. Equally,limited returns on share capital withany surpluses belonging to membersare also indispensable defining fea-tures. The role of education, so thatmembers can exercise real control oftheir co-operative, is similarly essen-tial to co-operative identity. Given the social consciousness ofcredit unions, an obvious questionrelates to their accountability, particu-larly to their members. Accountabilityhas been defined as ‘being obliged toexplain one’s actions, to justify whathas been done’ (Government Accoun-ting Standards Board, 1987, p. 21).Discussions of this concept in the con-text of NFPOs have been common-place in the last decade (Likiermanand Creasey, 1985). This is an impor-tant issue for credit unions as they arecurrently constituted, and is becom-ing of greater importance as, in theUK, they are provided with greaterfreedom to expand the provision offinancial services. This paper drawsand builds upon a continuing pro-gramme of research undertaken bythe authors to highlight the impor-tance of good accountability by creditunions and the state of current prac-tice (Hyndman, McKillop, Fergusonand Oyelere, 2002).

Accounting, Accountabilityand the Annual ReportThe UK credit union industry is rela-tively young, with a large number ofrecent formations. By 2000 there were

866 credit unions in the UK, of whichapproximately 170 had been estab-lished in the last five years. Totalassets of these organisations are £533million, with a membership base of659,000. A large proportion of thesecredit unions are relatively small (115have an asset level greater than £1million, 242 have assets between£100,000 and £1 million, and 509 haveassets of less than £100,000). A modern view of accounting hasbeen to see it in terms of providinginformation to satisfy the informationneeds of users. With specific referenceto credit unions, this notion of userneeds is promulgated by theCanadian Institute of CharteredAccountants (CICA, 1984) in aresearch study that is the most com-prehensive extant consideration offinancial reporting by credit unions.Here it is argued that (CICA, 1984,para. 4.7) ‘one has to consider who arethe users of financial statements andwhat information would they finduseful in making economic decisions’.This view of accounting seems clearlylinked with ideas relating to account-ability. Rutherford (1983) considersthe need to provide information tousers in terms of the concept ofaccountability. He views the conceptas being the requirement to beanswerable for one’s conduct andresponsibilities. Accounting informa-tion can provide an important andregular mechanism through whichmajor aspects of accountability aredischarged, although, as Jones andPendlebury (1996) highlight, account-ability, in its widest sense, is morethan accounting (however widelyaccounting is defined).

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The above discussion of accountingand accountability highlights theparamount importance of the users ofthe information. A logical progressionfrom this position would be that aconsideration of the informationneeds of users is necessary prior to thedetermination of the information thatwill be provided by the reportingentity. To apply this to credit unionsrequires the identification of thosegroups that have a right to receiveinformation and the determination ofthe information that they need. Thispaper concentrates on the informationneeds of members of credit unions.The CICA (1984) research study high-lighted such a group as a main user ofaccounting information. Members are similar to the users The Corporate Report (AccountingStandards Committee (ASC), 1975)was concerned with when it identifieda large class of general users to whoma responsibility to report is owed whoare not in a privileged position toenforce special demands. The major-ity of members normally have no eas-ily exercised right to demand infor-mation and they must primarily relyon credit union annual reports forinformation. Annual reports (whichnormally include financial statementsand other information disclosures)are recognised as key documents inthe discharge of accountability toexternal users in many organisationsas they are (ASC, 1975, p. 16) ‘the pri-mary means by which the manage-ment of an entity is able to fulfil itsreporting responsibility’. Credit unions must provide account-ing information to various stakehold-ers. This is an aspect of accountability,

with the provision of financial state-ments prepared on the basis of appro-priate generally accepted accountingprinciples (GAAP), and capable ofbeing compared over time and acrossthe sector, often seen as important.Indeed, in other not-for-profit sectors,a lack of consistency in financial state-ments is seen as a weakness (Bird andMorgan-Jones, 1981). Such informa-tion can support the decisions of arange of stakeholders, including creditunion members, as they make judge-ments and decisions.

Research Method and KeyFindingsWhile recognising the importance of‘social performance’ information inthe discharge of accountability bycredit unions, this research seeks : topresent the results of a basic contentanalysis of the financial statements ofUK credit unions; and to present abrief summary of the results of aseries of interviews with key stake-holders (‘Managers’ and ‘Regulators’)with respect to the discharge of finan-cial accountability by credit unions. In judging financial accountability,the focus was on the quality of finan-cial statements, judged in terms of theprovision of financial informationpublished using appropriate GAAP.While there is no definitive list of theprinciples that are appropriate forcredit unions in the UK, issues wereselected by reference to legislativerequirements and research studies. Ina sense, the items of informationselected as the basis for analysis(‘basic items’ of information) repre-sented a normative model of credit

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union financial reporting. The modelwas composed of 16 informationtypes (as shown in Table 1) thatformed a basic framework for finan-cial reporting by credit unions inorder to meet the financial accountinginformation needs of members ofcredit unions. Each one of the 16 infor-

mation types included in the model isjustified by reference to legislation,GAAP or relevant research findings(for fuller explanation, see Hyndmanet al., 2002). The model consisted ofsix broad categories of informationand ten specific accounting policiesand other notes to the accounts.

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Table 1Sixteen Information Types Forming the Model

Information Type

Broad content of financial statements1 Responsibilities2 Audit report3 Income and expenditure account4 Balance sheet5 Preceding year information6 Cash flow statement (or equivalent)

Specific accounting policies and notes to the accounts7 Basis of preparation8 Accounting policy – fixed assets9 Accounting policy – bad debts

10 Fixed assets11 Investments12 Related party transactions13 Bad debts14 Loans15 Shares16 Reserves

One hundred and twenty annualreports of credit unions were analysedto ascertain the quality of the financialstatements (quality being judged interms of compliance with the model’srecommended disclosures). The analy-sis was undertaken across three size-related classifications (large, mediumand small credit unions). In addition, in

order to obtain a more in-depth under-standing of the issues, fifteen inter-views with key stakeholders wereundertaken, focusing on the financialaccountability of credit unions throughthe medium of the annual report. Toencourage interviewees to be as open aspossible, it was stated that the inter-views would be reported in such a way

as to prevent specific statements beingattributed to particular individuals. Thereporting of the interviews (below) isstructured to achieve this by presentingthem in two groupings: the ‘Regulators’(including a senior representative fromthe Financial Services Authority (FSA),the Registrar in Northern Ireland, andsenior individuals within the tradeassociations); and ‘Managers’ of creditunions (senior representatives of indi-vidual credit unions).

The main findings of the research were :

UK credit union reports lack qualityThis research suggests that, at present,financial accountability is weak. Forinstance, when focusing on the qualityof financial statements, it was foundthat the disclosure of 16 fairly basicitems of information was, at best,patchy, with the overall average disclo-sure of these items being 73 per cent.Such a situation may undermine theability of users, and in particular mem-bers, to make appropriate judgementsand decisions. Given that the powers ofdirect interrogation by members ofcredit unions are limited, such weak-nesses can disadvantage members.However, without external pressurethere may be inadequate incentive forcredit unions to change existing report-ing practices. Appropriate credit unionfocused guidance, provided by thetrade associations or by the accountingprofession, would help considerably.Without it to assist preparers and audi-tors of accounts, the danger of misrep-resentation, misunderstanding andfraud is increased. The widespreadadoption of suitable guidance would

also provide for greater confidence inthe control processes within creditunions, which may be a desirable (orindeed necessary) condition for furthergrowth of the sector.

Multiple accountability confusion,and limited resources and expertisemay be possible explanations of low quality reportsThe substantial non-disclosure of fairlybasic and fundamental information inthe annual reports of credit unions maybe related to the problem of creditunions having multiple accountabilitiesand being confused as to priorities andthe information needs of particularstakeholders. This phenomenon may berelated to the issue ‘under accounting’,as each user assumes that another useris taking a close look at finances, actionsand results (a problem identified byEdwards and Hulme, 1995). It is sug-gested that many of the concernsexpressed about weak accountabilityrelate to the difficulties in prioritisingand reconciling multiple accountabili-ties. It is possible in the case of creditunions that the accountability to theRegistrar or the FSA through the needto complete the annual returni, whichdemands fairly significant informationprovision, may take priority over pro-viding information to members andothers through the annual report. Inaddition, UK credit unions, which arerun primarily by unpaid volunteerswho have no particular training indetailed accounting matters, may lackthe resources and expertise to be proac-tive in the provision of comprehensiveinformation. Whereas the FSA and theRegistrar may be perceived as having

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formal authority with respect to thecompletion of the annual return, the rel-atively weak position of individualcredit union members may lead to few,if any, concerted calls for improve-ments in annual reports.

Little difference in financialaccountability with respect to size Overall, there are very few significantdifferences in the quality of financialreporting between credit unions ofdifferent sizes. The overall average dis-closure percentage for all 16 items was 76 per cent for the large credit unionscompared with 71 per cent for smalland medium sized credit unions, yetfew statistically significant differenceswere found. For example, when largecredit unions were compared withsmall credit unions, higher disclosureby large credit unions was only deemedstatistically significant with one item ofinformation (out of 16). Studies in otherNFPO sectors have shown muchgreater differences in financial account-ability when size is the focus of analy-sis, with large organisations being iden-tified as having better quality financialstatements than small organisations(see Connolly and Hyndman, 2002).

‘Regulators’ dissatisfied withcurrent reporting and encouragingchangeThe interviews revealed that a numberof ‘Regulators’ saw current annualreports as deficient in meeting the infor-mation needs of members and arguedfor a radical rethink of information con-tent and form of presentation. One inparticular argued that the style andstructure of today’s credit union annual

report was ‘redolent of the sort of nine-teenth century sort of voluntarism…Iknow it has got to be done, but it’s sortof old-fashioned in a way, and of littleinterest to members.’ However, in gen-eral, they demonstrated a positive viewof the potential of the annual report asa medium through which accountabil-ity could be discharged, and saw it as ameans for effective and direct commu-nication between the credit union andits members. In addition, the ‘Regu-lators’ viewed both financial informa-tion and ‘other information’, parti-cularly relating to a wider social ac-countability and governance, as ofimportance. Such emphases stress theneed for more member-focused annualreports.

‘Managers’ view the annual reportas having limited importanceAdditionally, the interviews high-lighted that ‘Managers’ perceive that theannual report is rarely read by, and oflimited interest to, members of thecredit union. To some extent, these per-ceptions provide some explanation ofthe state of credit union reporting viathe annual report. The interviewsdepicted reporting by credit unions thatwas: constrained by convention; reac-tive rather than proactive; and oftenrelied overly on accountants and audi-tors for direction. While notable excep-tions were identified, most credit union‘Managers’ displayed a lack of motiva-tion, because of limited knowledge ofdetailed financial issues and, perhaps,also because of inadequate resources, inchanging reporting practices. Given that‘Managers’ have some influence regard-ing the contents of annual reports, per-

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ceptions of a lack of readership orunderstanding by members could, atthe very least, lead to an ambivalent atti-tude as to the importance of such docu-ments. However, most ‘Managers’ artic-ulated a desire to improve reporting tomembers, but there was little evidencein the interviews that significantchanges had occurred in the recent past,possibly suggesting that major futurechanges are unlikely without externalintervention.

Concluding CommentsThis paper summarises some of the keythemes from the first major piece ofresearch on the financial accountabilityof credit unions in the UK. Overall, thequality of financial reporting throughannual reports by credit unions ismixed. Because of this, the potential foradverse consequences, including ineffi-ciency, a lack of member-interest focusand, possibly, fraud, is increased.Indeed, the increasing number of creditunions in the UK experiencing financialdifficulties might suggest that change isneeded. While there is an appetite tochange, and this is demonstrated most

clearly with ‘Regulators’, there appearto be limited mechanisms throughwhich change can occur. The credit union movement in the UKis, to some extent, at a crossroads, withthe FSA assuming the main responsibil-ity for its financial regulation. It is likelythat the FSA will place more emphasison detailed reporting by credit unions,in line with the requirements that theFSA already places on other financialinstitutions. It would be a pity if thistranslates into solely the detailedreporting of largely financial data to aregulatory body. This research hasdemonstrated that this, however laud-able it may be, will not encourage stake-holders (with the exception of the regu-lator) to become involved inmonitoring, reviewing and engagingwith the credit union. Given that creditunions are member-owned and mem-ber-run co-operative organisations,which emphasise self determinationand democratic principles, it wouldseem essential that improved accounta-bility to members be encouragedthrough the production of member-focused annual reports. �

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ReferencesAccounting Standards Committee (ASC, 1975), The Corporate Report, London :ASC.Bird, P. and P. Morgan-Jones (1981), Financial Reporting by Charities, London :ICAEW.Canadian Institute of Chartered Accountants (CICA, 1984), Financial Reportingfor Credit Unions (A Research Study), Toronto: CICA.Connolly, C. and N. Hyndman (2002), ‘The State of Charity Accounting inIreland: A Study by Jurisdiction and Size’, Irish Accounting Review, Vol. 9, No. 1, pp. 57-92.Edwards, M. and D. Hulme (1995), Non-governmental Organisations-Performance and Accountability (Beyond the Magic Bullet), London : EarthscanPublications.Government Accounting Standards Board (GASB, 1987), Concepts Statement No 1 : Objectives of Financial Reporting, Stamford : GASB.Hyndman, N., D.G. McKillop, C. Ferguson, and P. Oyelere (2002), Credit Unionsin the UK: A study of their structure, growth and accountability. Association ofChartered Certified Accountants’ Research Report (No. 75), London : CertifiedAccountants Educational Trust. Jones, R. and M. Pendlebury (1996), Public Sector Accounting, 4th edition,London : Pitman. Likierman, A. and P. Creasey (1985), ‘Objectives and Entitlement to Rights inGovernment Financial Information’, Financial Accountability & Management,Vol. 1, No. 1, pp. 33-50.Rutherford, B.A. (1983), Financial Reporting in the Public Sector, London:Butterworths.

Endnote1 An annual return is a document required by the regulatory body and focuses

on financial compliance. The annual return is structured in such a way thatthe regulator can rapidly extract ratios to assess the solvency of a particularcredit union and its efficiency in the use of resources on a comparative basiswith other credit unions.

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AbstractThere are about 133 co-operatives inCanada in which the membership ispredominantly Aboriginal. The largestnumber of Aboriginal co-operatives canbe found in the northern regions of theArctic, mostly among Inuit andInuvialuit. Aboriginal co-operativesserve a wide variety of needs, the mostcommon being the provision of foodand supplies in remote communities.They are also important as marketers ofarts and crafts, wild rice, fish, and shell-fish. A small number have demon-strated the possibilities of housing inurban communities and financial serv-

ices to First Nations communities, cru-cial needs with considerable potentialfor future development.This paper introduces the reader to thecontexts within which Aboriginal co-operatives exist, and draws upon thefindings of a socio-economic impactstudy and eleven case studies to illus-trate the contributions that co-opera-tives are making within Aboriginalcommunities across Canada.

Aboriginal Economic and Social CircumstancesIt is a vast understatement to say thatthe current state of economic develop-

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Aboriginal Co-operatives in Canada1

by Lou Hammond-Ketilson*

* Lou Hammond Ketilson is an AssociateProfessor of Management and Marketing,College of Commerce, and Research Fellowwith the Centre for the Study of Co-opera-tives, University of Saskatchewan, Canada.With Dr. Ian MacPherson, has recentlycompleted Aboriginal Co-operatives inCanada: Current Situation and Potential forGrowth, a federally funded project examin-ing the role of co-operatives in encouragingsustainability in First Nation, Metis andInuit communities. Has published recentlyon the contribution of co-operatives to build-ing social capital; collaborative leadershipand sustainable communities; women, lead-ership and co-operatives. Teaches courses inbusiness and government policy, businessand community. E-mail: hammondk@com-merce.usask.ca

ment within Aboriginal communitiesand nations is far from satisfactory. Anational study by Indian and NorthernAffairs Canada highlights many of theeconomic and social problems con-fronting residents of First Nations com-munities2. While the percentage of peo-ple fifteen years of age and older withno schooling or kindergarten only isdropping, it still stands at 5 percent;over 29 percent of the population overfifteen have less than grade nine educa-tion, more than double the nationalaverage. The percentage of the popula-tion on reserves with university educa-tion, while increasing, is not risingfaster than the general population. Themale labour-force participation ratestands at 58 percent, 15 percent belowthat of comparable non-Aboriginalcommunities and 24 percent behind thenational average. The female participa-tion rate is 45 percent, nearly thirteenpercentage points below that in compa-rable non-Aboriginal communities andnineteen percentage points behind thenational average. The low participationrate among young people is particu-larly troubling : it stands at only 56 per-cent, 14 percent below that of compara-ble non-Aboriginal communities and 18percent below the national average. Theunemployment rate across the entirecommunity is 28 percent, much abovethe 10 percent typical of both compara-ble communities and the nation as awhole at the beginning of the 1990s.Self-employment is only 2.2 percent,significantly below the 9.8 percent to befound in comparable communities andless than half of the national average.The situation confronting Inuit,Inuvialuit, and Innu is similarly trou-bling. Unemployment rates of 50–70

percent are common in many Arcticcommunities. The opportunities foryoung people to build careers withinmarket economies among their ownpeople are difficult to pursue. Toomany of the better jobs are still held bysojourners from the South.Identification of economic and socialdevelopment strategies capable ofaddressing community needs whileremaining consistent with cultural pri-orities is critical as Aboriginal peoplesseek to make the best possible use oftreaty funds; to create sustainable com-munities; as they search for ways to cir-culate financial resources as frequentlyand as broadly as possible within theircommunities; and as they encouragenew forms of entrepreneurial activities.Many different economic developmentstrategies have been initiated inAboriginal communities over the years.In some communities development hasoccurred through publicly owned busi-nesses, while others have embracedentrepreneurship through small pri-vately owned businesses. Some com-munities have worked closely with nat-ural resource companies; others havechosen to pursue more traditionalforms of harvesting activities. Yet oth-ers, more than has generally been real-ized, have used co-operatives as aneffective way to develop their commu-nities economically and socially.The appeal of the co-operative approachis not surprising as it responds well tothe priorities set out in the RoyalCommission on Aboriginal Peoples3, andmeets the criteria for economic develop-ment within Aboriginal communities assuggested by other reports authored byAboriginal organizations.4

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The Extent and Nature of theAboriginal Co-operativeMovement TodayThere are an estimated 1335 co-opera-tives in Canada today in which a sub-stantial proportion of the membership isAboriginal6. Most of these co-operativesare located in smaller, more remote com-munities, although there has beenincreasing evidence of growing interestin communities located closer to thelarger cities and among Aboriginal peo-ple located in urban centres.More than half the co-operatives are inthe Northwest Territories, Nunavut,and Nunavik. They had their begin-nings during the late 1950s andexpanded rapidly during the 1960s and1970s. The co-operative approach hasproved to be very popular in the Arcticand increasingly in the North gener-ally; by the mid-1990s there werehardly any communities in the FarNorth that did not have a co-operative.According to Arctic Co-operativesLimited (ACL), over 95 percent of thememberships of the northern co-opera-tives are Aboriginal, the remaining 5 percent being made up of southernersresiding in the North. Inuit are by farthe largest single group within themembership, particularly in Nunavutand Nunavik. In the western Arctic,substantial numbers of Inuvialuit andDene are also members, and in recentyears the Dene have been joining exist-ing co-operatives in increasing num-bers and starting new co-operatives. The Arctic co-operatives have devel-oped two distinct federations of co-operatives : one, Arctic Co-operativesLimited, serving co-operatives inNunavut and NWT, and the other, la

Fédération des coopératives duNouveau Québec, serving the co-oper-atives of Nunavik. These federationshave been instrumental in stabilizingthe northern co-operatives, in develop-ing system-wide accounting, market-ing, and employment standards, and inpresenting a united voice to govern-ments. In addition, ACL is amember/owner of Federated Co-oper-atives, a Saskatchewan-based co-opera-tive wholesale owned by co-operativesin western Canada (and through ACL,northern Canada).In Québec, a second membership net-work exists associated with theMouvement Desjardins. In addition tosix caisses populaires owned and oper-ated exclusively by Aboriginal people,there are approximately twenty caissespopulaires providing Aboriginal peo-ple with services specific to their com-munities.The only other major concentration ofAboriginal co-operatives is to be foundin northern Saskatchewan—the co-operatives that survive from an exten-sive programme undertaken by theSaskatchewan government during the1940s and the 1950s. The remaining co-operatives are scattered across southernCanada, their origins being highly indi-vidualistic and their purposes quitediverse.The Aboriginal co-operative movementis larger than most people might expect.At the time of the study, the seventy-seven reporting co-operatives7 claimedmore than twenty-four thousand mem-bers. This number is somewhat mis-leading in that the number of northern-ers using the stores is higher than thatnumber would indicate. First, the store

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also serves nonmembers—a persondoes not have to be a member to shopin them. Second, most memberships areheld by families, often includingextended families, so the numbers ofAboriginal people actually affiliatedwith co-operatives is substantiallyhigher than twenty-four thousand.Northern Aboriginal people are fourtimes more likely than southernAboriginal people to be members of aco-operative.

The Aboriginal co-operatives reportingto the Secretariat annually sell nearly$250 million in services and products,and the amount has been increasingsteadily in each of the last ten years.They have nearly $190 million in assetsand member equity stands at almost$90 million. Net savings have fluctu-ated somewhat around $7 million eachyear, depending largely upon theextent to which the co-operatives havebeen improving their physical plant.The importance of the $7 million inannual net savings cannot be over-stated. This money is generated entirelyby business in the community, makingco-operatives one of the most effectiveforms of economic development in thecommunities where they exist.Virtually all of the savings are distrib-uted within the community; most of itis spent in the community, stimulatingfurther business and economic activi-ties. The co-operatives employ more thanfourteen hundred people, the averageco-operative employing about eighteenindividuals. The vast majority of theemployees are Aboriginal, the mostcommon exception being managers,most of whom are non-Aboriginal,

although this pattern is slowly chang-ing. On average, co-operatives tend toemploy slightly more people than com-parable firms owned and operated bynon-Aboriginal people. They alsoappear to be more likely to keepemployees in times of adversity, and topay at a somewhat higher rate. Additionally, co-operatives serve as anincubator for employment opportuni-ties within Arctic communities. Emp-loyees move among the co-operativesassociated with the Arctic federations.Many have moved on to jobs in thepublic service and with private compa-nies after having been trained in the co-operatives. Others have opened privatebusinesses, sometimes competing withthe co-operatives.

Contributions to CommunityBuildingThe following section identifies lessonslearned from eleven cases studies ofAboriginal co-operatives. The sectorsrepresented in the case studies arereflective of where the greatest numberof Aboriginal co-operatives were foundat the time of the study—predomi-nantly in the retail sector, with potentialfor strength in housing, fishery, finan-cial services and the natural resourcessectors. Social co-operatives (healthcare, child care, medical care) have asyet not been developed, but this sectorholds potential for development. Table1 identifies the criteria utilized in theselection of the eleven case studies.

OriginsThe Aboriginal co-operatives includedas case studies grew out of needs not currently satisfied or provided in

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an unsatisfactory manner by existingorganizations.The need for a decent standard of hous-ing and a sense of community, forexample, led to the formation of theNative Inter-Tribal and First NationsHousing co-operatives in London,Ontario. The desire for more affordableand traditional food sources, alongwith a strengthened community,resulted in the creation of Neechi FoodsCo-operative Limited in an inner cityneighbourhood in Winnipeg.The primary objective for establishingCaisse Populaire Kahnawake was tokeep large influxes of seasonal wages inthe community, and to enableKahnawake First Nation to accesscredit and loans using their own lend-ing criteria and rules.The Anishinabek Nation Credit Unionwas established as a solution forAnishinabek Nation communities thathad for many years experienced diffi-culty borrowing funds for economicdevelopment and other projects.Anishinabek Nation communities hadnot been well served by governmentprogrammes or conventional financialinstitutions.In Nova Scotia and British Columbia, a scarcity of employment opportuni-ties led to the formation of theApaqtukewaq Fisheries Co-operativeand Wilp Sa Maa’y Harvesting Co-operative respectively. In the moreremote regions, where service deliveryis provided by few if any businesses,the Akochikan, Ikaluktutiak, andAmachewespimawin co-operativeswere formed by community membersto increase competition and assert con-trol over local economies.

Co-operatives in the Far North werestarted generally within Inuit,Inuvialuit, and Dene communities toprovide competition for existing foodmerchants and to ensure that pricing ofconsumer goods fairly reflected costs.They also were established to providefor the controlled marketing ofAboriginal art. Subsequently, the co-operatives have expanded to meetnumerous vital needs of Arctic commu-nities, including snowmobile sales andrepair, hotel accommodations, postoffices and cable service provision.

Impact on CommunityPrevious studies8 examining theimpact of co-operatives on communi-ties have identified particular benefitsassociated with the formation of co-operatives in the following three areas :building/ strengthening physical infra-structure, building/strengthening per-sonal infrastructure, and building/strengthening social infrastructure(social capital). An analysis of theeleven case studies found similar bene-fits.

Building/Strengthening Physical Infrastruc-ture Co-operatives contribute to thedevelopment of the physical infrastruc-ture—roads, telecommunications, serv-ices—of a community through the con-struction of facilities and provision ofservices inadequately or not currentlyprovided by government or the privatesector. Within the remote North, co-operativessuch as Ikaluktutiak offer retail servicesto provide food and housing essentialsto the community, as well as other serv-ices—cable hook-up, for example.Through operating hotels and a craft-

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marketing co-operative, they provideemployment as well, while facilitatingthe development of the tourism indus-try. In response to the lack of infrastruc-ture in Nunavik, Puvirnituq Co-opera-tive offers a group of services to thecommunity, including cable, banking,consumer loans, and insurance, in addi-tion to a hotel and courthouse as well asa general store.Apaqtukewaq Fisheries Co-operativemanages the Chapel Island Band oys-ter-processing facility in Arichat, NovaScotia, and is exploring the feasibility ofopening an oyster-processing facilityon reserve, further strengthening thereserve community’s ability to provideemployment.Anishinabek Nation Credit Union facil-itates the accumulation of savings, cre-ating a source of credit for its members,as well as providing a full range offinancial services not otherwise avail-able through conventional financialinstitutions.The Kahnawake First Nation had notbeen well served by the traditionalbanks, which often had little or noawareness of Aboriginal laws and cul-ture, and had been reluctant to do busi-ness in the community. The criteria forgranting loans—stable and permanentemployment—was not consistent withthe seasonal workforce living on thereserve in winter, and working con-struction sites during the summer. Thelending rules established by CaissePopulaire Kahnawake recognized thecultural realities of the First Nation,thereby providing a mechanism to sup-port personal and business loans,assisting with economic developmentin the community.

Native Inter-Tribal Housing Co-opera-tive and First Nations Housing Co-operative in London, Ontario, vigor-ously addressed the need for theAboriginal community to haveinputinto and improved control over thequality of housing available to it withinthe city. Native Inter-Tribal HousingCo-operative has grown from twentyhomes in 1983 to sixty-two in 2000. FirstNations Housing Co-operative hasadded forty-two homes to the co-oper-ative since its incorporation in 1987.Demand continues to far exceed thenumber of houses available in the co-operatives.

Building/Strengthening Personal Infrastruc-ture The development of individualleadership (personal infrastructure)within a community has been demon-strated to be one of three aspects criticalfor the development and maintenance ofvibrant and entrepreneurial communi-ties. Education, training, and leadershipdevelopment are central to principles ofevery co-operative, and examples withinthe Aboriginal co-operatives support thecritical role leadership developmentplays in the success of the organizations.In addition to receiving training on therole and responsibility of a board mem-ber, members of the Native Inter-TribalHousing and First Nations Housing co-operatives have gained life skills fromtheir involvement with the co-op’s var-ious committees.The Caisse Populaire Kahnawake hasinvested considerable effort in trainingits employees, with the assistance of theFédération des caisses populairesDesjardins de Montreal et de l’Ouest-du-Québec. Most of the employees hadnever worked in a financial institution

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before, so the caisse offered them com-plete on-the-job training.Young people seem to be attracted tothe jobs provided by Puvirnituq Co-operative, and regard the training pro-grammes offered by the Fédération descoopératives du Nouveau-Québec viathe local co-operative, as a source ofpersonal development.Participation in management trainingprogrammes available through ArcticCo-operatives Limited, as well as theopportunity to take part in leadershiptraining and the democratic processesinvolved in running a co-operative,have contributed to the fundamentalskills required to move on to positionsof leadership in the newly formedNunavut government. A large per-centage of members participating in ahuman resource development initiativeoffered by Arctic Co-operatives Limitedin the early 1980s went on to becomehamlet managers, housing associationmanagers, and Members of Parliament.At the time of the study, ten of nineteensitting members of the NunavutLegislature had significant experienceand training within the co-operatives.

Building/Strengthening Social Infrastruc-ture9 Co-operatives enhance opportuni-ties for the development of social capi-tal within Aboriginal communities. Byworking through Arctic Co-operativesLimited, remote communities haveaccessed not only a broad network ofsuppliers for products and services, butthey have also absorbed new ideas,training programmes, and managerialexpertise not easily available in theNorth. On a local level, Arctic Co-oper-atives, in addition to the employmentthey have provided, have markedly

increased the capacity of people tounderstand effective business practice,to assess economic activities, to reachconsensus on complex issues, and tocontribute to community economic andsocial development.Inuit co-operatives in Québec not onlymet the Inuit’s needs for consumergoods, but also, above all, they createda sense of belonging. From as early as1971, the co-operative movement sup-ported the idea of an autonomousregional government in Nunavik.Caisse Populaire Kahnawake was thefirst banking institution to introduce asystem of guarantees adapted specifi-cally to the Aboriginal community.Under this model, known as a “trustagreement,” trustees are used as thirdparties when loans are guaranteed.Because the trustees are members of theAboriginal community, they mayreceive land as security and sell it toreimburse the caisse, in the event theborrower is unable to repay. Thetrustees are all volunteers and are polit-ically independent—not appointed by afederal or provincial agency, or theband council. The Caisse Populaire Kahnawake hascontributed to the development ofsocial infrastructure by providing amechanism to contain and recirculatefinancial resources within the commu-nity. With the support of the Desjardinsfederation, management training andtechnical support are made available,enhancing the ability of the communityto access additional resources to furthereconomic and social development.The founders of the AnishinabekNation Credit Union believe that hav-ing their own financial institution isessential to achieving the goals of more

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self-reliance, more independence, andmore self-government. In support ofthat goal, the slogan for the credit unionis “Put your money where your Nationis.” In their words, “We have to use ourown money to invest and start it up. Weneed to deposit our own savings in thecredit union so it can continue operat-ing. We need to borrow money fromour own credit union so it can make aprofit.” In typically co-operative fash-ion, forty-three Anishinabek FirstNation communities pooled their com-munity and individual resources tobuild an institution that each of them ontheir own was incapable of establish-ing.Co-operatives enhance social capital bythe ways in which they contribute totheir communities. Members of theNative Inter-Tribal Housing Co-opera-tive developed an Urban NativeParents’ Association, which was instru-mental in having the Native languagetaught in the neighbourhood school.The co-op also provides space for com-munity activities and administrativeassistance to other community groups.Akochikan Co-operative has held manysuccessful socials within the commu-

nity, strengthening social ties among itsmembers.In every co-operative studied, therewere examples of how they provided ameans for advancing Aboriginal tradi-tions, whether it was offering a chancefor employment in traditional pur-suits, or emphasizing traditionalfoods, language, or cultural practices.All have strengthened social relation-ships, thereby contributing to thedevelopment of social capital.

ConclusionsThis paper has summarized a substan-tial record of accomplishment by Abori-ginal co-operatives in Canada. Abori-ginal co-operatives contribute to thedevelopment of physical infrastructurewithin communities; personal infra-structure is enhanced through educa-tion, training, and leadership devel-opment; the development of socialcapital builds capacity and furtherstrengthens Aboriginal communities.Considerable potential exists for furtherdevelopment of co-operative enter-prise among Aboriginal peoples inCanada. �

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Notes1 This paper is based on the findings of a study of co-operative development in

First Nation, Metis, Inuit, Inuvialiut and Dene communities across Canada. Thefinal report, Aboriginal Co-operatives in Canada: Current Situation andPotential for Growth, was prepared on behalf of the Canadian Co-operativeAssociation and le Conseil Canadien de la Coopération. It was made possiblethrough funding from Indian and Northern Affairs Canada and the Assembly of First Nations. The full report, jointly authored with Dr. Ian MacPherson, isavailable in hard copy from the Centre for the Study of Co-operatives, and inPDF format on their website, http ://coop-studies.usask.ca.

2 Comparison of Social Conditions, 1991 and 1996 (Ottawa: Indian and NorthernAffairs Canada, 2000).

3 “Economic Development,” in Report of the Royal Commission on Aboriginal Peoples(Ottawa: The Commission, 1996).

4 See for example Wahbung: Our Tomorrow, Manitoba Indian Brotherhood, 1969;Scone Report, Northwest Territory Councils, 1989; Economic Development amongthe Aboriginal Peoples in Canada : The Hope for the Future, Robert Brent Anderson,North York: Captus Press, 1999; Building a Sustainable Future,” Inuit Tapirisatweb site, (http://www.tapirisat.ca), January, 2001.

5 The author is confident that this number is significantly understated, partiallydue to difficulties associated with identifying co-operatives as Aboriginal. A co-operative has been classified as Aboriginal if it is located in a predominantlyAboriginal community, if the membership or customer base is predominantlyAboriginal, or if the co-op is owned and/or controlled by Aboriginal peoples.Only co-operatives that are formally incorporated as such, have been includedin the data, although the author is aware that there are some Aboriginal busi-nesses that are not formally incorporated as co-operatives but, in essence, followco-operative practices.

6 The term “Aboriginal” has been used to refer to all people who consider them-selves descendents of the first human beings to inhabit Canada: i.e., Amerindianpeoples (status and nonstatus), Inuit, Inuvialuit, Innu, and Metis. The term “FirstNation” has been used to refer to status Amerindians associated with theAssembly of First Nations.

7 Socio-Economic Profile of Aboriginal Co-operatives in Canada, in Aboriginal Co-oper-atives in Canada: Current Situation and Potential for Growth. 2001. Centre forthe Study of Co-operatives, University of Saskatchewan. Co-operatives providea report on a variety of measures on a voluntary basis to the Co-operativesSecretariat, Agriculture Canada. Those reports (77 of 133 identified AboriginalCo-operatives) have been utilized to compile the Socio-Economic Profile.

8 Lou Hammond Ketilson et al., The Social and Economic Importance of the Co-opera-tive Sector in Saskatchewan (Saskatoon: Centre for the Study of Co-operatives,1998).

9 Social infrastructure is also referred to as social capital. Unlike other forms ofcapital, social capital is not a single entity but a variety with elements in com-mon. It is brought about through networks, social norms, and social trust.Community members develop social capital only through co-operation andmutual aid.

46

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* Ms. Hilda Felipe San Gabriel is a SeniorProgramme Coordinator with the Office forPeople Development at the University ofAsia and the Pacific, Philippines. Currentlyshe also serves as a researcher for theInternational Co-operative Alliance-Regio-nal Office for Asia and the Pacific.

– a basic right to shelter has beenshelved. Despite the fact that develop-ment interventions to improve theurban poor people are present toinclude among others: job security,employment generation in rural areasto discourage migrants to the urbancenters, skills training and promotionof co-operative enterprises, and pro-

48

People’s Participation inImplementing Housing Co-operative Projects, CulturalDistinction, Emerging Trends,Factors for Sustainability : The Philippine Experienceby Hilda Felipe-San Gabriel *

IntroductionThe housing problem becomes peren-nial to the Philippine urban poor.Shortage in housing and the sharplyincreasing costs of housing units havecome to the extent that the urban poorare unable to buy them. The currenteconomic system, neo-liberalism ischaracterized by technological ad-vancements. Job security is now anopen question in the context oftoday’s economic order. Recent devel-opments tend to be unreceptive to thegrowth of communal interest frombelow. Middle income, more so thelow income workers are becomingpoorer and poorer in the context oftheir being unable to avail a decentand affordable place to live – a home

vision of basic services, such as health,education, and low-cost housing, theefforts are not adequate. The research undertaken served as animperative material as it looks intohow the urban poor people struggleamidst their condition, and documentpeople’s own voices and sentiments,how conflict was resolved, and howpeople’s participation, cultural back-ground becomes critical for both theeffectiveness and sustainability of theproject. Specifically, it focuses onsocial capital formation in the contextof establishing organizations such asco-operatives that would address theneed of the community the need forshelter. The research looks at insightsinto how communities, acting in par-ticipatory way, organize themselvesand confront issues, difficulties, chal-lenges and opportunities in trying tocome up with their own housing solu-tions and on how these communitiessucceeded in the process. Types of housing project include com-munity-based, parish-assisted, univer-sity-based, homeowner associations,people’s organization which stemsfrom the fact that central to the issue ofhousing is the issue of land problem.Originally, people started to form anassociation with a common bond ofinterest, and would later on converttheir organization into a co-operative tofacilitate collection of monthly amorti-zation. Later on, using the dynamics ofthe organization, it now becomes a co-operative way of life for the communi-ties that were formed using the “con-cept of co-operative housing.” The case study done by the author is adescriptive and expository material

on the initiative of the men andwomen who comprise the followingorganizations : 1. one of the largest people’s organiza-

tion which evolved from a parish-based community, the SamahangMaralita para sa Makatao at Ma-katarungang Paninirahan (SAMA-SAMA); a peoples organizationwithin the National GovernmentCentre (NGC) that formed them-selves into a credit co-op to beefed-up support for their move towardsland tenure;

2. derivative of SAMA-SAMAs initia-tive, germinate another peoplesorganization from the NGC East SideCompound, the Samahang Nagkaisasa Palupa (SANAPA);

3. Habitat for Humanity Philippine’sPolo Transmitting CommunityDevelopment Co-operative, Inc.(PTCDCI) Housing Project, uses thesweat-equity of project-beneficiaries-partners; and tapped volunteers inhouse building, and corporate socialsupport;

4. the Nagkakaisang Bigkis Lakas ngPasacola Dulo Homeowners Asso-ciation (NABIGLA PO) is a mem-ber CMP-originator of the LuzonCMP-PO Network, in response tothe growing need for housing facili-ties had community mortgage pro-gramme which are truly people initi-ated;

5. Baguio-Benguet Community CreditCo-operative housing project;

6. NATCCO-member affiliate withhousing co-op projects in Visayasand Mindanao; the Mindanao StateUniversity-IIT Employees Multi-

49

Purpose Co-operative (MSU-IITEMPC);

7. Couple’s For Christ Gawad KalingaProject; church-led project envision-ing to help the marginalized acquirea decent place to live and providelivelihood assistance;

8. the faculty members and non-teach-ing employees of the country’s pre-miere state university, the Universityof the Philippines, who formedthemselves into a UP EmployeesHousing Co-operative (UPEHCO).

All cases presents “a community”examining their own housing prob-lems and looking for possible solutionto the problem by implementing andsustaining housing projects. It pre-supposes community participationprocesses in the stages of the project.Community participation can beexpressed as the empowering of peo-ple in terms of their acquiring skills,knowledge and experience to takegreater responsibility for their devel-opment. Given the factors and indicators of suc-cesses in the people’s initiatives andundertakings, the theory suggests thepossibility of project replication. In thefinal analysis, the research offers animportant substance for social move-ments in their popular struggle. An analysis of these experiences hasbeen used to derive the following les-sons. Mass of urban poor presentespecially in slum area is widely per-ceived as equivalent to the mush-rooming of squatters and the problemof lack of mass housing for the poor.This circumstance of lack of housingfor the poor is but a manifestation ofpoverty that is prevalent in the coun-

tryside that drove people to seek“greener pasture” in urban areasbecause of the relatively low or no jobopportunities in the countryside. Theentirety of the problem served as awake up call to focal point the devel-opment of the countryside.

Demystifying the Urban PoorThere are 76.5 million Filipinos (as ofMay 2000, National Statistics Office)and approximately 20 million of themare urban poor. Urbanization level inthe Philippines is placed at 11.1%. Thephenomenon of urbanization is a prod-uct of a massive exodus due to extremepoverty in the rural areas. They live inslums and squatter areas. The life of anurban poor is miserable. They, in gen-eral pay more for their basic services.They live in breeding grounds ofdeadly diseases mostly affecting chil-dren and women. Infant mortality rateis 410 per 1,000 live births in the slumand squatter areas while 76 in non-squatter areas. There are approximately7,000 per 100,000 TB patients in thesquatter areas. Problems to access tosafe water and sanitary toilets are also amajor concern. The phenomenon of the urban poor isa direct by-product of various formsof exploitation being suffered by 90%of peasants in the vast rural areas ofthe country. Peasants constitute 80%of the present 20 million urban poorand their continuing exodus fromrural to the urban areas will not ceasebut still continuous to accelerate asurbanization spreads. Consequently,urban workers, composed by the em-ployed, underemployed and unem-ployed as well as the vast number ofsemi-workers.

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Since land is monopolized by a fewbig landlords, peasant families payvarious forms of rent. Many are stilllandless, most owner cultivators andtenants have to work part time as sea-sonal farm workers, marginal fisherfolks, carpenters or tricycle drivers,with an income of about a P50-70pesos or a dollar a day, this harsh real-ity pushes 90% of peasants into utterdestitution. As of year 2000, 7 out of10 farmers are still landless, and worstthey are often victims of all forms ofusury and monopoly in terms of pro-duction inputs. On one side, the gov-ernment’s agrarian reform pro-gramme in its implementation ofComprehensive Agrarian ReformProgramme has achieved way below40% of its target. Worst is the continu-ing threat of exemptions, conversionsof agricultural lands distributed or isstill in the process of distribution, can-cellation of certificate of land titlesand emancipation patents stillabound. More often than not, theseunskilled, illiterate and semi-literatemigrants find their ways in the squat-ter areas.

The Responsibility of theGovernmentThe Philippine government hasembarked on three major socializedhousing programmes: first, Com-munity Mortgage Programme; sec-ond, the Retail Home LendingProgramme of PAG-IBIG or the HomeDevelopment Mutual Fund; andthird, the Resettlement Programme.Defining these three socialized hous-ing programmes as categorizedwould give an over-all picture of :

1) Community Mortgage Programmeis considered to be the most afford-able option with a monthly amor-tization of up to Philippine Pesos159.00. Communities need toorganize themselves first to availof a loan to buy the land on whichthey reside. Credit is payable for25 years with a 9-12% interest.

2) Retail Home Lending/ HomeDevelopment Mutual Fund is alending programme for low-income members. It requires atwo-year membership and a regu-lar employment for borrowers,typically, workers, teachers, andsoldiers. Non-members and in-formal workers are thereforeexcluded. Average monthly amor-tization is Philippine Pesos1,650.00.

3) Resettlement seems to be the gov-ernment’s primary response to thehousing problem. While mosthouseholds could hardly cope withthe initial amortization of PhilippinePesos 400.00 a month, this figureincreases by Philippine Pesos 200.00every year for five years. On thesixth year up to the 30th year, therelocates would be payingPhilippine Pesos 1,200.00 a month. The Direct Housing Programmewhich is done primarily by the pri-vate sector and the LocalGovernment Units through a jointventure arrangement with theNational Housing Authority couldbe considered as an effort toaddress the problem, aside fromPresident Gloria Arroyo’s initia-tive on facilitating the fast process-ing of housing requirements,

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under Executive Order 45 “Pres-cribing Time Periods For Issuances ofHousing Related Certifications,Clearances, and Permits and Impo-sing Sanctions for Failure to Observethe Same.” Executive Order 45 hasthe potential of solving a bigaspect of the procedural bottle-necks in housing project applica-tion processing. The immediateissuance of these implementingguidelines and information dis-semination complementing schemeshould be the main concern.

THE PEOPLES’HOUSING SOLUTION:

Peoples’ Inventiveness in ApproachesInventions and struggles go togetheras a means so people would live andwould have a place to live. In-dividually it has been proven, that it’sa herculean task, collectively, it iseven harder due to cultural differ-ences. The cases demonstrate thatthere are significant dissimilarities inthe way housing initiatives startedand follow through. These differencesreflect levels of economic develop-ment, culture, local history. Theapproaches used by the urban poorand low-income earners vary; oneuses the co-operative housing conceptand the other, and the communitymortgaged programmes. In theprocess the various types of housingproject becomes synonymous in theirbenefit from social capital, sweatequity, and the community resources– such dynamics proved advanta-geous in the organization.

Housing project’s social orientationreaffirms the following: 1) cultivates self-help, 2) decentaccommodation at low cost, 3) secu-rity of occupancy, members savingsmobilization, 4) ensures quality onimproved standards in housing, 5)creates amenities, 6) reduces specula-tion, 7) creates suitable environmentalconditions, and 8) fosters communityparticipation and development.

Housing projects may be perceived asinitiatives of nongovernmental organ-izations that serve as conduits in thetransformation of communities toavail housing projects. The cases high-lighted the paradigm of housing projectfor the poor as a viable option in the devel-opment of housing project with a strongsense of community participation. If theobjective of a project is to encourageownership and responsibility, then itwill be important to monitor howpeople’s participation in the projectevolves over time from an initial morepassive involvement to eventualactive participation and responsibil-ity. Indeed people’s participation iscritical for both the effectiveness andfuture sustainability of the project.People’s inventiveness and participa-tion recognizes empowerment. Thestudy convoluted on the experiencesof urban poor people that strive tobring about the conditions in whichevocative democratic organizationcan exist.

Education and OrientationComponents The education component of the proj-ect serves as a strong move and aneffective tool to correct misinterpre-

52

tations on the projects and servicesbeing offered by the organization.Findings in key informants interviewand focus group discussion revealedthat majority of the members have avery high interest and participationduring the building and constructionof the houses. Continuous education for members ofthe coop using seminar modules forhousing co-operatives has been inplaced along side with its aggressiveinformation dissemination campaigns.Their orientation manual has the fol-lowing components: 1. Organizationalprinciples in general, 2. Housing co-opera-tives/housing project structure, 3. Mort-gage servicing, 4. The proposed by-laws,that deals with the specific rules reflectingthe organization’s culture, distinct historyand direction.The housing project therefore, can begauged as successful in using consulta-tion, assemblies, meetings, and sense ofinvolvement of the community mem-bership in the actual project. Seminars,and technical, and skills training ofmembers were dynamically done usingthe expertise of support and advocacygroups. Later on, the POs/COOPs arethe one’s conducting their own semi-nars.

Vibrant CommunityParticipation The intensity of people’s involvementis based on their individual aspira-tions. An aspiration is rooted inresponding to a basic necessity—theneed for a decent place to live. In thiscontext, where housing project is aparadigm, a second look as an alterna-tive to a structure needs to be assessed

in as far as how it was formed andwhat are the factors that made it suc-cessful. A large degree of the process, on theother hand, which are qualitative incharacter have been explained andtranslated to achieve an understandingof how the transformation took placefrom the organizing nucleus, to thedesign and development of the project. The Philippine culture of Bayanihanand Kapitbahayan are felt and prac-ticed by all communities in the study.The people carry out the concept ofsweat-equity. In the development andimplementation of housing projects,what provide members with the basisfor their direct involvement in devel-opment initiatives include: mobilizingmembers to unite on the housing issueand to struggle towards its concretiza-tion, meet and seek consensus on impor-tant issues, organize formal and informalgatherings to facilitate discussions anddraw concerns of members, expansion ofmembership base, disseminate informa-tion actively through channels, and con-tinuous education programmes skills-and-issues-based. Site search, construc-tion and improvement, land developmentfocus on the over-all communitydevelopment concept. Devising short-term gestation projects that give wayto longer-term programmes such assavings mobilization co-operative forma-tion, livelihood projects in the housingsite, day-care centers, coop health clin-ics/centers, and the conduct of teach-inprogrammes for the children of the mem-bers of the organization. Census conducted by community vol-unteers, engineers and surveyors inthe area have been tapped. The maxi-mization of community waste and

53

sanitation management, and environ-mental concerns (cleaning the imme-diate surroundings, planting trees)has been brought to the fore. Eachcommunity family constructs a septictank and an allocated for the garbagedepot.Crime busting uses community secu-rity volunteers, employing a policy ofshifting on security roving on theassigned area and implementingcurfew.

The Politics and Secondmentfrom Supporting AgenciesThe political nature of housing proj-ects makes relationships with localleaders crucial to the success of theproject. A strong political support isneeded to the implementation andsustainability of the housing project.It relates to relationships with localleaders, cooperation across sectorsand re-allocation of resources that areall critical to bring about changes inthe project. Strong political support isessential to the implementation andsustainability of housing project.Inputs of non government organiza-tion working in the communitiesserved as models of community par-ticipation which evolved with biasedto local traditions.

Internal Strengths :Effective Leadership and An Efficient Secretariat Consistency in the leadership isimportant. Leadership assists in conti-nuity and is often a feature of sustain-able and effective projects. Effectiveleaders are those who can work with

people from a diversity of sectors andwith community members. Conflict-resolutionist in nature, communityleader facilitates, and serves as aninspiration and an ideologue to thepeople in the community. Vibrant,enthusiastic, and with good commu-nication skills are also attributed tothe community leaders. As leadersrepresent the community in numer-ous rallies and dialogues, negotiatingskills and willingness to questionexisting practice necessitates as anadvantaged leadership skills. Womenleaders play a major role. Maternalrole model-leader has had its positiveeffects in organizations especially inresponding to domestic needs andfamilial concerns.

External Support and Advocacy GroupsCrucial to the success of these initiativesis the external support from nationalcoordinating units, and internationaldevelopment institutions agencies.Advocacy work is a tool for people/community empowerment as it is amechanism whereby community mem-bers are mobilized to collectively act onissues that they encountered andresolved the same by exerting pressureon specific targets such as governmentagencies and individuals. It increasesthe people’s bargaining power in thesense that their collective strength isrealized when acting on specific issuesthat needs to be resolved, collectiveaction is a manifestation of unity and assuch issues that are resolved as a resultof collective action is more empoweringand it can only be achieved throughconscientiousness of masses doing sus-

54

tained advocacy work. Institutionalsupport from other funding agencieshas been tapped by all the communi-ties.

Constant Monitoring and Evaluation The benefit of evaluation is to assess theeffectiveness of the project. Evaluationrequires more critical reflection on thechallenges posed by the projects andthe reasons for successful initiatives. Itis significant to monitor how people’sparticipation in the project evolves overtime from an initial non-involvement,to a relatively passive involvement, andwould later be to eventual active partic-ipation. The monitoring and evaluationof people’s participation would have todo with the output of the project, itsimpact and influence. It therefore,involves some concrete outcomeswhich are visible and are quantified,and which can be eventually measured.Fundamentally, there is a need to knowwhat has happened as a result of thepeople’s involvement. The monitoringof people’s evaluation would have todo wit the output of the project, itsimpact and influence. This involvesconcrete outcomes which are visibleand are quantified and which can beeventually measured such as number ofhouse and lot units awarded to mem-ber-beneficiaries, and financial stand-ing or viability of the project.

Ensuring Sustainability of Peoples InitiativesCrucial factors to the housing projectinclude community ownership, main-taining political support, and com-munity commitment. Sustainability

depends on keeping the values, visionand concept. Local resource mobiliza-tions and micro-credit schemes and co-operatives would allow economic sus-tainability of members of the com-munity. The tasks undertaken differsignificantly with development levels.In poorest of the poor areas, the provi-sion of clean water and sanitation andbasic urban infrastructure are of out-most importance, otherwise, an out-break of air-and-water-borne-diseases.The typical arrangement in the organi-zation that has been studied was that ifa member fails to pay the house that heor she has availed or could not pay theloan amortization, she or he may beevicted from the house and lot that heor she got. Encouragingly, the officersof the Homeowners Associations andCo-operatives ensure the members onthis aspect.

Government should therefore, reas-sess its urban planning capacity. Itought to recognize and support theroles played by co-operatives, indi-viduals, private voluntary organiza-tions, corporations, and civil society,that pursue alternative housing proj-ects by institutionalizing it, providingincentives, and extending financialmechanisms and technical support. Itis exasperating to expect more froman institution that has futile perform-ance in the field of housing the poor-est sector of society.

Housing project sustainability de-pends on various factors, of outmostimportance and is central to the peo-ple involved, their financial standing,their capability to pay. Another aspectof project sustainability in housing co-operative project is the fact that

55

members do not have to feel the pres-sure of being evicted because theirshare contributions in the co-opera-tive serve as their collateral.Microfinance schemes such as co-operative credit formation and thelike ensured peoples livelihood andadditional capital for their informalbusinesses. Internally-generated fundswere sustained by recruiting addi-tional members and continued capitalbuild-up. Such generation of fundsserved as additional sources of capitalfor future housing project sites.Member’s contribution in the form ofshare capital was extended to thedevelopment of their housing unitsup to the land development. Self-build houses were facilitated by thePOs using the savings that were gen-erated from volume of units that moreaffluent would build. Financing is amajor concern in the delivery of hous-ing services. It is where the govern-ment is expected to provide for thepoor the utilization of developmentaland housing materials loans. Andmaking such loans accessible with acomplementing easy payment schemes.Institutional development concentrat-ing on the creation of Department ofHousing and Urban Development)would boost the existing housingframework and the initiatives of thepeople. This context should furtherpushed the government to involvePOs, HOAs, Co-ops in the conceptual-ization, and implementation of itshousing initiatives. Relocation, demo-lition that has caused the lives ofmany urban poor leaders shouldbring to an end. Since, housing initia-tives has been concretely felt and seenas advocated by NGOs, institutions

and civil society groups. Idyllically,all sectors should enjoin in preventingillegal demolition since it is inhu-mane.

Models of Successes and Learning InstitutionsIn substance, the housing projectinitiated succeeded as espoused byCommunity-based Associations, People’sOrganizations and Co-operativeswhich are society based formationsin general, characterized by trust,reciprocity and mutuality. Their pro-cesses help people to understand theirneeds and abilities and that their mar-kets take up the character of the cul-ture and social structure in whichthey operate. Their sociopolitical and economicdimensions have created a broad con-sensus for social change and havebrought together formal and informalalliances between interest groups insociety which could help bring aboutstructural reforms. The housing proj-ect challenges the technical expertiseof the officers and required the maxi-mization of skills of members andtheir representative leaders. The non-technical people howeverwere maximized in their respectivelines of work, namely, marketing thehousing project and information dis-semination and community organizing.Indeed people’s participation is criticalfor both the effectiveness and futuresustainability of the housing projects. Itwill be vital that its evaluation shouldbe built into the project’s monitoringand evaluation system. Approaches to monitoring and evaluat-ing people’s participatory development

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not merely on quantitative measure-ments and instead, concentrated infocal pointing the qualitative measure-ments which are processes. Essentially,there is a dire need to know what hashappened as a result of the people’sinvolvement. The examination of peo-ple’s participation would have to dowith people’s efforts in confrontingissues and the lack of security of tenure,and getting consensus on issues andmobilizing their own ranks to addressvarious issues at a given period. Themonitoring and evaluation of peoplesown initiative as they narrate it and asit is being documented is an honestappraisal of how they view, monitorand evaluate their own development.Illustrating the participation andinvolvement of an urban poor organi-zation that has emerged out of theinherent threat of dislocation and inse-curity of land tenure in an urban set-ting, and to address a common need,should constantly be monitored andevaluated to serve as learning institu-tions and models of successes. Community involvement happens atall stages of the housing project. Thequalitative character of participationfocused on the transformation that tookplace from member’s non-participationat the start of the project, and a level ofinhibition. But such initial passive char-acter was overpowered by members’attendance in meetings that puts for-ward in the agenda the design of thehouse and the site where the houseswill be built, and other componentspertaining to project implementation. This development process requirestime and resources because of the con-cept of peoples stakeholdership as ittake account of the peoples interests

and struggles. It is high time that thepeoples organization’s housing proj-ects initiatives paradigm be consid-ered so that the poor sector of oursociety can avail of the constitutionalrights of citizens to have a decentplace to live. Indeed, the project if managed andoperated by people’s organizations,given its dynamics and benefits, withless government intervention, isworth replicating. The next genera-tion should learn the commendableoutput and harvest of the men andwomen who initiated the housingprojects employing communalresponsibility, and utilizing sharedcommunity resources, expertise andskills.

A Call for PeoplesParticipation Where the need for mass housing is pal-pable, the call is for everyone to partic-ipate. The problem of housing thepoorer sector of society, as it is rooted inthe issue of land security. Therefore,has to be dealt with urgency. Being ableto work on a project, developing astakeholder’s esteem is what makesorganization tick. When people are ableto surpassed challenges within, over-coming such, and seeing their capaci-ties as a group. These dynamics is whatmake peoples organization cohesive, asit is anchored on the collective strengthof people. Such strength of people isreflected in their participation in craft-ing their own destiny. By virtue of theirinternal dynamics, communities areempowered to solve their own prob-lems, and their liberating potentials areenhanced.

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The housing project is a technical, aswell as an economic social activity.Development means more than par-ticipation in economic benefits. It is aprocess that ranges from information,consultation, to local people’s owner-ship of and responsibility for thedevelopment initiative. Developmentshould intensify and emphasize thelevel of enjoyment of basic familyrights as well as uplift the human con-dition and the quality of life itself. People’s participation is a battle cry. Itcenters on the active involvement ofgrassroots communities in whateverundertaking that is aimed at upliftingand developing the socio-economic,political and cultural well being of thepeople. Participation takes place inreference to the idea that the govern-ment has the responsibility to providedirection in the development of thesociety and as such the people’sinvolvement in what ever directionthe development should go should bea major consideration because of thefact that the main reason for underde-velopment of communities be it at therural or urban setting is the lack ofpeople’s participation. Participation or the lack of it, takes offfrom the standpoint that any visionfor development is not the soleresponsibility of the government, assuch people’s participation becomes anecessity because of the fact that anydevelopment shall accrue to the peo-ple and without them taking part inthe process renders developmentfutile. It is therefore appropriate toview participation in the context ofgovernment providing a venue for it,however, it becomes more empower-ing on the part of communities that

they are the ones coming to termswith the kind of participation theywanted to be involved in. Meaning,tokenism and not being able to pro-posed and advocate their experiencesin their communities is not participa-tion at all. People’s initiative differen-tiated from participation tells of a sit-uation wherein communities actingcollectively on their own to achieve acommon goal of either attending tocommunity issues or strategic issuessuch as land tenure security and hous-ing by doing what they can, withwhat they have, without necessarilyseeking legitimacy from governmentas long as they can visualize, andimplement the same with the partici-pation, and cooperation of each andevery member of the community. To promote people’s participation, asin concretely be seen in sweat-equityconcept, to people’s engagements,from land acquisition to the progres-sion of the housing project, is to be anexplicit objective of a developmentprogramme, then both its outcomeand effect will need to be both moni-tored and evaluated. It is an approachto evaluating people’s participation,with its fastidious methodology thatcould be used across a whole range ofdevelopment projects. It is paramount to emphasize that par-ticipation in development meansmore than participation in economicbenefits; it is a process that rangesfrom information, consultation, tolocal people’s ownership of, andresponsibility for the developmentinitiative. If the objective of a project isto encourage ownership and respon-sibility, then it will be important tomonitor how people’s participation in

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the project evolves over time from aninitial passive involvement to even-tual active participation and responsi-bility. Under these circumstances andgiven the intractability of poverty andinequities, sectors with the naturalstrength can help rebuild communi-ties and cities in a sustainable manner.

Summing-upThe global effort to make our cites andcommunities accessible, safer, health-ier, more productive and sustainablehas come to the fore from the co-oper-ative movements of the world includ-ing the Philippines. About one billionpeople live in health-and-life threat-ening situations in slums, ghettoes, ordepressed areas in the cities of theworld. Nearly half of the world’s pop-ulations live in cities. Social scientistsestimated that more than two-thirdsof all people will be city dwellers bythe year 2005. The Habitat CitySummit and the succeeding worldconferences served as vital step in theglobalizing movement and efforts tofocus on the communities and humansettlements which we make andwhich we decide.The Philippines has 80 million peopleand with a current growth rate of twoand a half percent per year, two mil-lion Filipinos are added to thePhilippines’ population each year –one million of which reside in citiesand towns. More than twenty percentof the additional urban populationwill be living in Metro Manila – theNational Capital Region is the 16thlargest mega-city in the worldAs for rural to urban migration as oneof the many causes of over popula-

tion, the need to focal point develop-ment in the countryside should begiven priority, along with delivery ofbasic services to the urban poor popu-lace.There are about 14 million urban poorwhose lives need to be improvedthrough better jobs, adequate services,healthy environments and opportuni-ties for advancement. The rural poorequally deserve the same benefits.Efforts in the past to address this con-cern proved to be inadequate. ThePhilippine government embarked onthe «social reform agenda» with majorreforms focusing on: 1) meeting thebasic human needs utilizing their ownenergies with minimum governmentassistance, 2) widening their share ofresources from which they can earn aliving and increase the fruits of theirlabor, and 3) enabling them to effec-tively participate in the decision mak-ing processes.The radical concept of poverty allevia-tion that developed strategies thatwould eventually fulfill the basic needsof the poor and hopefully would effec-tively deliver service. The establish-ment and holding of national anti-poverty summit and its respectivecommissions has been an overwhelm-ing effort of the government to addressthe problem. Still the programmes fallshort. The inadequacy has been feltstrongly in large cities. This is where the people’s organiza-tions, non-government organizations,and co-operatives, the private sectorplays as an important tool. Devel-opmental non government organiza-tions work hand in hand in providingcapacity-building programmes to bene-

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fit their member-owner, disadvantagedgroups, marginal sectors and the urbanpoor.The Philippines co-operative move-ment are shaping and charting itsown development not only to im-prove the quality of life of its mem-bers but also to ensure its shelterrequirements. With the experiences ofstarting with credit co-operative andsimultaneously forming capital forthe guarantee of their members sus-tainable community.Co-operative organization becomesan essential factor in people’s partici-pation in land and housing issues.The co-operative become the people’svoice, identity and culture. Peoplewant a place to live, they get itthrough the co-operative organiza-tion.The emergence of organizationsaddressing the problem of securing aplace to live became the focus of theco-operatives that are providinghousing services. The life of theseassociations, its struggles and gainsare worthy of a second look. Thealliances they create, the systems theymake, the organizational dynamism,collective leadership, and activemembership played crucial in theimpact of the housing project.Multi-sectoral participation increaserapidly as the problem of housinglingers.Through the various support, housingis now viewed as a social responsibil-ity. It is but a call to the government toprovide financial mechanism or to cutbureaucracies in the processing ofpapers, encouragement by givingconcrete incentive to private and co-

operative sector participation, provi-sion of government lands for with thePresident’s proclamation to low costhousing, and the promotion of co-operative housing. Thus, furtheradvocating for the need to review thePhilippines housing and urban devel-opment act. It is paramount to empha-size that people’s participation indevelopment means more than partic-ipation in economic benefits; it is aprocess that ranges from information,consultation, to local people’s owner-ship of and responsibility for thedevelopment initiative. If the objec-tive of a project is to encourage own-ership and responsibility, then it willbe important to monitor how people’sparticipation in the project evolvesover time from an initial more passiveinvolvement to eventual active partic-ipation and responsibility.The provision of infrastructure andbasic services to meet increaseddemand is another urgent concernthat these sectors attend to. Throughpublic-private partnerships and theexpansion of participants, localizationand promotion of community partici-pation has widen. Systems and meth-ods have been uniquely designed bythese people’s organizations, co-oper-ative groups that encourages theiractive participation, from project con-ceptualization — to implementation.The self-help concept and mutual aidis a precise demonstration of this peo-ple’s initiative.Capital formation from the co-opera-tive has been tremendously improvedthrough the credit operations thatthey operate. This is done with thepresence of check and balance, inter-nal and external auditing, and the

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presence of control mechanisms. Suchbuild-up and pooling of resourcesserved as capital based of co-opera-tives in their housing project, specifi-cally, generating members contribu-tion and equity for the co-operativehousing project.Tapping private institutions, school-based and corporation-based, whichserved as volunteers, has been bene-fited from by the co-operative organi-zation. These volunteers providemanpower in the construction ofhouses, and building materials.Sweat equity and volunteerism are allsocial capital that has been maxi-mized in human settlements. Thepresence of human resources tangiblyseen in many non government, peo-ple’s organizations and co-operativehousing initiatives through “sweatequity” should be given value. Sweatequity and volunteerism served asemerging trends in the co-operativemovement which are all rooted in the“bayanihan concept” that Filipinosare known for. The culture of helpingone another in the community and isalso renowned as a national symbol ofunity. Involvement in co-operative activi-ties, people, who are member-ownerthemselves, begin to realize what theco-operative organization can do fromconceptualizing the housing project, tomobilizing all their resources, imple-menting the project, and sustaining themomentum. Indeed such are the won-der of what the organization and unitedaction can accomplish.The steps when enumerated in detailwould give us an over-all picture ofconscientious progression of commu-nity participation and empowerment :

block identification, visual structuralsurvey, census verification, authentica-tion of members eligibility, planningdesign, approval of design, communitydiscussion of design structure, prepara-tion of subdivision plan, land develop-ment, housing structure development,movement of residents to the newly-built houses, preparation of certificatesof ownership, awarding of certification,amortization of respective housingunits, and the development of co-oper-ative support systems such as play-grounds for children in the community,co-operative school, co-operative mar-ket, and co-operative clinics.Community census as a pre-requisite ofthe housing project has been dynami-cally done using community volun-teers, and generating resources to con-duct such has been faultless. Intra-community dynamics which includewaste management, reblocking pro-cesses and uniformity of housing con-struction, crime busting techniques andvolunteerism has been effectively done.Fund generation initiatives to serve ascommunity fund reserve has been inplaced.A process on community empower-ment through housing co-operativismhave transformed the way in whichpeople of various social standing inter-acted and supported each other, thus,creating economies of scale.The moral fiber of the organization canbe traced from its leadership. Co-opera-tive practicing its dealings in participa-tory way solicits active member’sinvolvement in all aspects of the hous-ing development. Such consciousefforts of the women and men that leadthese people’s organisations, and co-

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operatives into what they are now, theirvaluable contribution, their dedication,expertise, commitment, and selfless-ness, their profiles and their leadershipstyles deserve a commendation.The initiatives and tremendous effortsexerted by the members of the co-oper-ative to cope with their family’s dailyexpenses and the way the members ofthe co-operative place value on thriftand savings for worthy and beneficialprojects is worth replicating, an1dpropagating.When people are able to surpassedchallenges within, overcoming such,and seeing their capacities as a group.These dynamics is what make peoplesorganization cohesive, as it is anchoredon the collective strength of people.Such strength of people is reflected intheir participation in crafting their owndestiny. By virtue of their internaldynamics, communities are empow-ered to solve their own problems, andtheir liberating potentials are enhanced.Ultimately, the silhouette value of self-

help labor concretized as sweat-equityshould be accounted, mathematicallycomputed as an element of total invest-ment in housing by the members ofthese co-operative societies, and peo-ples organizations. Expound, intensifyand deepen the co-operative commu-nity practice of such model could serveas strong foundation for the future. This can be exemplified by enhancingand living the co-operative way of life –the presence of co-operative commu-nity. It should be supplemented withcontinued promotion of communityand co-operative consciousness throughseminars, community meetings andfocus group discussions. Existentially,and has been proven include “commu-nity-mutual-help-projects” which in-volves digging trenches for watermains, road concreting, obtainingbuilding materials and soliciting sup-port from private corporations, pro-moting environmental consciousnessare among co-operative qualified suc-cesses. �

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* E. Kim Coontz has been a Co-operativeSpecialist with the Centre for Co-operativesat the University of California since 1990.Kim administers the Centre’s programmesfor child care, worker, and other non-agri-cultural cooperatives. She holds an MA inSociology from the University of California

at Davis. ekcoontz@ucdavis.edu* Elizabeth Esper has an MS degree in

Community Development from theUniversity of California at Davis. Liz hasbeen working with the Centre for Co-oper-atives as a Post-Graduate Researcher since2001. elesper@hotmail.com

Using Co-operative Child Careto Address the Needs of RuralResidents near AffordableHousing Developmentsby E. Kim Coontz and Elizabeth Esper *

In the United States, the 2000 censusfound that three-quarters of allAmerican mothers were in the work-force. i The magnitude of the labor forceparticipation of parents with small chil-dren makes child care a social issue of

particular concern to employers, educa-tors, community planners, child wel-fare advocates, and parents. High costs,quality, shortage of services, proximityto work and home, hours that accom-modate work schedules, and compati-

bility with cultural and parental valuesare among the issues that make childcare an ongoing concern for workingfamilies. Each of these issues is exacer-bated for rural residents, and intensi-fied for low income rural residents.In 1997, when the US federal socialassistance program, Aid to Families withDependent Children (AFDC) was abol-ished, a gradual transition began for itsreplacement, Temporary Assistance toNeedy Families (TANF). Little attentionwas paid to the significant ideologicalassumptions involved in the shift fromone program to the next. AFDC wasfounded on the ideology that youngchildren are best cared for at home by aparent. TANF mandates that each stateestablish mechanisms for moving par-ents on assistance into the workforce.The entrance of large numbers of lowincome mothers into the workforceincreases the need and intensifies theissues surrounding child care. Other US social service programs aredesigned to assist low income familiesproviding grants and low interest loansto housing developers who must rentthe housing units to residents whoseincomes meet income eligibility. Anumber of private, non-profit corpora-tions specialize in the development ofthese “affordable housing develop-ments” in rural communities. Many ofthese developments contract with otherorganizations to offer a range of residentservices that can include child care.

Project OverviewThis project was launched as a prob-lem-solving effort to investigate the fea-sibility of using co-operative models ofchildcare to expand the availability of

quality child care at or near ruralaffordable housing sites in California. Aportion of the study focused on discern-ing why programs that encourage thedevelopment of child care at or nearrural affordable housing developmentswere not showing results. It also soughtto examine whether co-operative mod-els of child care were viable methods ofaddressing unmet child care needs inrural communities.The feasibility study began by identify-ing opportunities and impediments tothe development of co-operative childcare in rural areas in California.Relevant literature was examined;existing US federal and state programsinvolved with child care for lower-income groups, as well as applicablepublic and private funding sourceswere identified and analyzed.Interviews were conducted with thoseinvolved in low income housing, earlychildhood development, welfare-to-work programs, and economic devel-opment in rural communities.Interviews also helped identify ruralcommunity housing sites to include inthe site specific feasibility studies.The thirteen rural sites selected forintensive, directed study met the fol-lowing criteria : 1) they were in commu-nities with acute child care needs; 2)non-profit housing developers demon-strated an interest and willingness toassist with co-operative development;3) the housing facility or real estate envi-ronment near the facility was conduciveto co-operative development. Sitesselected were all rural but varied in pop-ulation size, location, and accessibility. Site-specific co-operative child care fea-sibility studies focused primarily on the

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compatibility of co-operative models ofchild care with the needs and interestsof parents, affordable non-profit hous-ing developers, and community lead-ers. Visits to the sites helped to assesspotential construction needs and costs,and to clarify existing, site-specific serv-ices. Community child care resourceand referral agencies and communitydevelopment organizations providedinformation about regional and localchild care needs and existing services.Resident surveys, focus groups, andmeetings were used to discern residentneeds and interests.

Characteristics of Child Care in Rural AreasRural communities face unique childcare challenges that are magnified forlow income residents. Population pat-terns, shortages of licensed child care,the special employment characteristicsof parents, transportation problems,and limited education and training ofboth caregivers and parents combine torestrict the child care options availableto rural families.Many child care problems stem frompopulation patterns inherent to ruralcommunities. Because the population is small and dispersed there are fewerchild care providers.ii Center-basedcare is rare in rural communitiesbecause the scattered population makesthe care less practical and transporta-tion problems affect parent’s ability toget to and from child care centers.Labor market and employment consid-erations intensify child care problems inrural communities. Rural parents oftentravel farther to jobs, which means theyneed child care for longer hours, and are

more likely than urban ones to worknon-traditional hours, which narrowsthe child care available to them.iii Inrural resort areas, seasonal fluctuationsin employment causes the supply anddemand for child care to fluctuate, mak-ing it difficult for child care providers tosustain a stable business.ivRural caregivers tend to be less edu-cated and trained than their metropoli-tan counterparts.v Interviews con-ducted with community child careprofessionals and regional data onlicensed facilities revealed that center-based child care was rarely availableand all of the communities involved inthis study had a shortage of licensedfamily day care homes.The child care needs of rural parentsare met primarily by informal carearrangements with kith (friends andneighbors) and kin (family and otherrelatives).vi When these arrangementsare possible they tend to be moreaffordable, and they may be better ableto satisfy parent’s specific cultural orchild-rearing objectives.vii The pri-mary (and sometimes significant) dis-advantage with such informal arrange-ments is that they are usuallyunlicensed and the quality of childcare is uncertain.

An Overview of Co-operativeModels of Child CareCo-operative models of child careexpand the options for quality, afford-able, child care available to families. Allco-operative models are non-profit,democratic, member-controlled pro-grams for children. The primary differ-ences among co-operative modelsrevolve around the member/owners.

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Parent Co-operatives are the most com-mon co-operative program for chil-dren.viii It provides center-based careand enrichment programs for mem-ber-families. The co-operative is gov-erned by a parent-elected board ofdirectors, who make policy decisions,and hire a program director. The pro-gram director is an expert in earlychildhood education who makes otherpersonnel decisions and runs the day-to-day operation of the center.

Employers, non-profit organizations,public agencies, or other entities maychoose to form a Child Care Consortiumso that they can jointly share the costs,risks and benefits of a child care pro-gram for their employees or clients.

A Child Care Worker Co-operative isowned by the program director, teach-ers, and sometimes classroom aides.Worker-owners may hire non-memberemployees. By combining their energy,capital, and skills, worker-membersgain steady employment and income,participate in workplace decisions,and share the business profits madefrom their investment and labor.

In a Family Home Child Care ProviderCo-operative each family home remainsa separate business, but decides onkey elements that member-homesshare in common for marketing pur-poses, such as accreditation and spe-cial training. The co-operative is usedfor marketing, to improve purchasingpower through bulk buying, ongoingeducation, and sharing business sup-port services such as back-up carewhen the provider is ill or goes onvacation.

A Babysitting Co-operative consists ofparent-members who exchange baby-sitting services with one another.Parent-member control assures thatthe organization reflects their ideals,needs, and values. Instead of payingfor services, a system of points orcoupons tracks parents’ use and pro-vision of services. Babysitting co-operatives are very useful for occa-sional child care needs but can beproblematic when used as the soletype of child care.

The Case for Parent Co-operatives at or Near Housing DevelopmentsEstablishing child care facilities at ornear affordable housing developmentsprovides needed care for working fam-ilies. Site-based care addresses familypreference for child care that is close tohome, as well as one of the significantobstacles to child care in rural areas:transportation.ix

Integrating a child care center into ahousing development makes financialsense. Financial incentives and pro-grams at various levels of governmenthave been established to encouragecollaborations between child care pro-viders and housing developers. Suchprograms can be an effective strategyfor acquiring difficult to access capitalfor construction of new facilities.Developers also gain an important resi-dent service that can strengthen its con-nection to the larger community.x

In this study, site visits, results of parentsurveys, meetings and interviews withchild care resource and referral officialsand housing developers all showed amarked preference for the Parent Co-

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operative. The most appealing aspect forall groups was the parent involvement.Indeed their preference is supported bydecades of independent research docu-menting positive child outcomes fromparent involvement—including ele-vated school achievement, increasedchild IQ scores, and reduced chances ofadolescent crime, pregnancy, and drugproblems.xi

As co-operative members all parentsare involved with making key policydecisions that affect their child’s out-of-home child care experiences. Parentparticipation and fundraising activitiescut overhead costs and bring in sourcesof revenue. Even employed parentswith schedules that don’t allow work-day participation are involved withvoting, participating in fundraising andparent meetings, and contributing sup-port to the program. Dialogue between the parent and earlychildhood educator is encouraged byparent involvement in the co-operative.The ongoing, simultaneous interactionof parent, child, and early childhoodeducator has something to offer eachmember of the triad. The parent isexposed to knowledge about how chil-dren develop, problem prevention anddiscipline strategies, and age appropri-ate behavior expectations that encour-age more effective parenting. Theteacher benefits in the co-operativebecause he/she is able to implementpractical elements of training anddevelop ‘hands on’ approaches to shar-ing this knowledge and experience. Theteacher is also able to more fully knowthe child and his or her individualneeds by sharing information with theparent. At the center of the triad is the

child who benefits from the supportivelinkages of home and preschool andshares important life experiences withhis/her parent.The interaction among parents, teacher,and children promotes parent empow-erment and strengthens social capital.xii

As parents participate, important deci-sions about the co-op, review financialstatements and organize events theydevelop knowledge and skills that helpthem be better parents and moreengaged in civic activities. Parents cometo see themselves as partners in theirchild’s education experience and becomeadvocates for their children once theyenter primary and secondary schools.Parents in co-operatives are activelyinvolved in establishing participationrequirements. The hours devoted toworking in the program are establishedby parents. Parents who are unable todirectly participate in the classroom per-form administrative and service roles. In California some 300 preschool andchild care co-operatives serve about9,000 families.xiii Research demonstratesthat they provide high quality care forchildren. The operating ratios of Cali-fornia parent co-operatives exceed thestandards recommended by the highlyrespected National Association for theEducation of Young Children and theAmerican Public Health Association.xiv

Challenges to the Developmentof Parent Co-operatives at or Near Rural AffordableHousing DevelopmentsThis study identified many encourag-ing positive reasons that child care co-operatives can meet the needs of ruralworking families. It also identified

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several challenges to co-operativedevelopment. The primary challengesidentified involve financial impedi-ments and perceptions (including mis-perceptions) that make some key community stakeholders reluctant toembrace co-operative development.

FinancialAccess to start-up capital and initialoperating funds is a significant hurdle tothe development of a child care co-oper-ative. The financial feasibility of a childcare co-operative depends on securingfinancing for construction and renova-tion, equipment and related costs, aswell as generating sufficient revenue tosupport initial operating costs andexpenses.xv Given the income level ofmembers, and elements intrinsic to thistype of service co-operative, it isextremely unlikely that sufficient fundscan be acquired through members. This study identified a number ofpotential private and public grant andloan funding sources for developmentand start-up costs.xvi Still, the applica-tion process can add a year or more toco-operative development. Additionallythe perception of co-operatives as“experimental” can hinder the likeli-hood of funding.Once a co-operative is established, it isexpected to be self supporting. Parentparticipation and fundraising activitiesreduce the overall costs of providingcare, and federal government subsidyvouchers for qualifying families can beused to pay for child care at the co-oper-ative because it is a licensed facility.

Perceptions and MisperceptionsInterviews with housing developers

revealed a myriad of reasons why someare hesitant to embrace on-site childcare. The explanations shared in inter-views revealed thoughtful, reasoneddecisions, as well as misperceptions.Probably the most cited reasons hous-ing developers gave for their reluctanceto embrace site-based child care serv-ices were their previous experiences.Many of the housing developers inter-viewed had past or present Head Startprograms, federal child care programsdesigned for qualified low income fam-ilies, located in an on-site building. Themost common complaint was that theseprograms were serving fewer andfewer of the children from the housingdevelopment. The ‘triage’ allocation ofHead Start services displaced residentsbecause they were replaced with moreimpoverished non-resident families.Housing developers were frustratedthat valuable community space wasbeing used by a program that served asmany, or in some cases more, childrenfrom outside the housing developmentas it did residents. Misunderstandings about site-basedchild care included incorrect beliefsabout licensing requirements, housingregulations, and funding restrictions.For example some developers thoughtthat some of the primary public fundingsources for affordable housing didn’tpermit child care at their housing sites(in fact the same funders have programsthat encourage the provision of childcare). Some developers thought thatfunding and size restrictions preventedthe development of child care centers. Several government programs suggestthat integrating child care facilities intothe overall land use planning and hous-ing development process is financially

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advantageous to the housing develop-ment and the child care center.xvii

Indeed, affordable housing sites canbenefit from planning for child care innew construction.xviii The center can belocated in a vicinity of a developmentthat allows for easier access for off-sitefamilies, while being convenientlylocated for residents. For the purposes of this feasibilitystudy, the receptiveness of the housingdeveloper to the idea of an on or near-site child care co-operative was animportant factor in site selection and inthe feasibility assessment. A conditionfor initiating a site-specific feasibilitystudy was that the housing developerwas receptive, even welcoming, to thedevelopment of a co-operative childcare center.A perception expressed in various waysby housing developers, communityleaders, and others in professional andleadership positions involves the ideathat low income parents lack the skillsnecessary to be co-operative membersor co-operative board members. Theirconcerns centered around their percep-tions that low income parents have lowlevels of education, inexperience withdecision making, and in some cases,limited English language skills. Whilethe idea that low-income parents lackskills crucial to co-operative leadershipcould be the topic of an entire paper,there are numerous successful co-oper-atives that contradict this perception.xix

ConclusionsInnovative strategies need to be utilizedto address the issues involved with

developing child care programs thatmeet the needs of rural families. Aswelfare policies become more focusedon employment for parents of youngchildren, the increasing need for childcare, combined with the likelihood thatsubsidies for care will probably be inad-equate, make the case for innovativestrategies even more compelling.xx Thewide variety of co-operative modelsthat can be used to address rural childcare needs represent this kind ofneeded innovation. This study found the most support forthe parent co-operative model. Whilethis guided the feasibility analyses atthe sites selected in this study, the othermodels should not be overlooked.The development of co-operative childcare centers at or near affordable hous-ing sites is a viable method of address-ing parental need for child care, and can address many of the concernsexpressed by housing developers inthis study. Nevertheless, until modelco-operative programs at housingdevelopments are in place the prolifer-ation of centers is unlikely. This analy-sis is a first step in this process. A final issue not previously addressedis the fact that many rural areas lackdense affordable housing develop-ments.xxi Co-operative models of childcare can also be a useful strategy for child care expansion in thesecommunities. To reap advantages similar those gained by linking co-operative child care with housingdevelopments, the co-operative can beintegrated into schools, libraries, or reli-gious facilities. �

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ReferencesAmerican Public Health Association/American Academy of PediatricsRecommendations. 1997. In Issues in Child Care Settings [online]. Atlanta:Center for Disease Control, Division of Healthcare Quality Promotion.Available from World Wide Web : (http://www.cdc.gov/ncidod/hip/abc/practic3.htm)

Beach, Betty. “Perspectives on Rural Child Care.” Eric Digest, DOC ED1.331/2:EDO-RC-96-9 (1997).

Bailey, S. and Warford, B. “Delivering Services in Rural Areas: Using ChildCare Resource-and-Referral Networks.” Young Children 50 (1995) pp.86-90.

Bronfenbrenner, U. The Ecology of Human Development : Experiments by Natureand Design. Cambridge : Harvard University Press, 1979.

Child Care Resource and Research Unity, Centre for Urban and CommunityStudies, University of Toronto. “ What Does Research Tell Us About Quality inChild Care ?” Factsheet 4 (1996).

Colker, L. and Dewees, S. “Child Care for Welfare Participants in Rural Areas.”Rural Welfare Issue Brief. Macro International Inc. November (2000).

Community Care Licensing Division. 1998 (reprinted April 2000). CaliforniaDepartment of Social Services. Title 22. Manual of Policies and Procedures[online]. California. Available from World Wide Web: (http://ccl.dss.cah-wnet.gov/docs/regs.htm)

Community Care Licensing Division. Innovations in Child Care. California :California Department of Social Services, June 1999.

Coontz, E.K. Bringing Families Together : A Guide to Parent Co-operatives. Centerfor Co-operatives, University of California, 2003.

Coontz, E.K., M. Lang, and K. Spatz. West Coast Co-operative Directory andResource Guide. Center for Co-operatives, University of California, 1998.

Dunlap, K. Family Empowerment: One Outcome of Parental Participation in Co-operative Preschool Education. New York : Garland Publishing, 2000.

Esper and Coontz. Funding Sources For Child Care Co-operatives in California.Center for Co-operatives, University of California, 2003. (http://co-opera-tives.ucdavis.edu/research_reports/index.html).

Helburn, Suzzane and Howes, Carollee. “Child Care Cost and Quality.” TheFuture of Children: Financing Child Care 6-2 (1996).

Hershfield, B. and Selman, K. eds. Child Day Care. USA: Child Welfare Leagueof America, Inc., 1997.

Katz, L.G. (ed.) Current Topics in Early Childhood Education. Norwood, NJ: AblexPublishing, 1986.

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Kagan, S.L, and Powell, D.R. et al. (eds). America’s Family Support Programs:Perspectives and Prospects. New Haven: Yale University Press, 1987.

King, C. “The People of Kids Place: Creating and Maintaining ComprehensiveServices for Young Children and Their Families in Small Rural Communities.”Zero to Three, 15-5 (1995) (ERIC Document No. 384 158).

National Association for the Education of Young Children. AccreditationCriteria and Procedures of the National Association for the Education of YoungChildren. Washington DC: NAEYC, 1998.

Phillips, Deborah. ed. “Quality in Child Care : What Does the Research Tell Us?”Washington DC: National Association for the Education of Young Children,1987.

Roberts, Buzz and Sussman, Carl. Housing-Leveraged Facilities Finance : A Modelfor Child Care Centers. USA: The Community Investment Collaborative for Kids(CICK), 2000.

Sissel, Peggy. Staff, parents, and politics in Head Start : a case study in unequalpower, knowledge, and material resources. New York: Falmer Press, 2000.

Shields, Margie and Behrman, Richard. “Children and Welfare Reform:Analysis and Recommendations.” The Future of Children 12 (2002).

Sonenstein, Freya et al. Primary Child Care Arrangements of Employed Parents :Findings from the 1999 National Survey of America’s Families. Washington, DC:The Urban Institute, 2002.

Stokley, Jan. Community Renewal of Family Economic Security. Oakland : Natio-nal Economic Development and Law Center, 1996.

Stokley, Jan. Linking Child Care Development and Housing Development : Tools forChild Care Providers and Advocates. Oakland : National Economic Developmentand Law Center, 1997.

Stokley, J. and Lessard, G. Family Child Care Initiatives in Low-IncomeNeighborhoods. USA: Community Development and Child Care Forum:Communities Working Together for Children NEDLC, 1995.

United States Census. 2000. Fertility of American Women [online]. USA: Census.Available from World Wide Web: (www.census.gov/prod/2001pubs/p.20-543rv.pdf)

Zigler, E. and Styfco, S. eds. Head Start and beyond : a national plan for extendedchildhood intervention. New Haven : Yale University Press, 1993.

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Referencesi 73.5%—US Census, June 2000.ii Colker and Dewes, 2000.iii Ibid.iv Bailey and Warford, 1995:88.v Ibid.vi Colker and Dewes, 2000.vii Stokley and Lessard, 1995.viii For this reason they are often simply referred to as child care cooperatives.ix Stokley, 1997.x Ibid. Also Roberts and Sussman, 2000.xi Bronfenbrenner, U. 1979; Powell, 1989; Phillips, 1977; Rim-Kaufman and

Pianta, 1999; Zigler and Muenchow, 1992.xii Dunlap, 2000.xiii Coontz, Land and Spatz, 1999.xiv Coontz, 2003.xv Most of the financial incentives previously presented are applicable to new

construction. Because of the nature of this study only existing affordablehousing developments were included in the study.

xvi Esper and Coontz, 2003.xvii Stokley, 1997.xviii Roberts and Sussman, 2000.xix Coontz, 2003xx Community Care Licensing Division, June, 1999. Shields and Behrman,

2002.xxi This fact led to working directly with several rural communities that lack

affordable housing developments (these sites are not included in thisanalysis).

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IntroductionThis paper presents research on exist-ing female leaders of co-operatives andtheir perceptions of differencesbetween their leadership styles and thatof men. It is an early exploration with asmall empirical base. Women contem-plating careers in co-operatives need tosee or read other female leaders inorder to see themselves as potentialleaders. The research will also be rele-vant to women from groups who facemultiple barriers such as differently-abled people, visible minorities, les-bians and First Nations.

Why is this research necessaryif women have already made it to the top ?Women aspiring to leadership posi-tions face a double standard in a doublebind, claimed Deborah Rhode, StanfordProfessor of Law. “The central problemis the lack of consensus that there is aserious problem. There is a widespreadbelief that full equality is just aroundthe corner.” Rhode (2001) claims that atthe current rate at which women aregaining leadership jobs, it will be three

centuries before women achieve equalrepresentation in corporations as men. Five female leaders agreed to partici-pate in this un-funded research intofemale leadership in co-operatives inBritish Columbia. These leaders rangedfrom early to mid career, were univer-sity educated, and worked in resource-linked community co-ops that were lessthan ten years old. In one case thegroup that formed the co-op had beenestablished decades earlier. One co-opis using the multi-stakeholder model. These leaders wanted to know howfemale leadership and managementissues are handled in established co-opsand wanted positive examples of

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Perceptions of female leadershipfrom three co-ops in British Colombiaby Cheryl Lans *

* Cheryl Lans, PhD, Post doctoral fellow,British Columbia Institute for Co-operativeStudies (BCICS), email: trini@uvic.ca

female leadership to manage change intheir own co-ops. According to Mono-poli (2002) knowing that you are not theonly one experiencing resistance canhelp you persist in your goals. The lead-ers interviewed have experienced barri-ers to their leadership that they feelshould be included in co-operative startup manuals.

Women in co-operative leadershipCo-operatives portray themselves asagents of economic and social transfor-mation. As such, they must have effec-tive management based on memberinvolvement and leadership accounta-bility and equity and equality in demo-cratic and management structure (Theisand Ketilson, 1995). Rather than equal-ity, reports show that women hold 30%of lowly paid junior management posi-tions in English-speaking Canadian co-operatives and their salaries as a per-centage of men’s are 77% (Conn et al.,1999). While half (51.4%) of the top 500 com-panies in Canada have no womenboard members; 68% of Canada’slargest co-ops have at least one femaleboard member. The number is higherfor small and medium-sized co-ops(78% have at least one woman), hous-ing (65% have greater than 50%women) and childcare co-ops (87%have more than 50% women) (Stand-berg, 2002). In October 1998 the conference “WomenWork in Co-ops” was organized byWomenFutures and co-sponsored byOXFAM-Canada and Devco (Conn etal., 1999). The participants revealed thatdespite the contribution women make

to community economic developmentthey are invisible actors. Participantsrevealed some of the challenges forwomen’s participation : incompatibilityof roles, lack of confidence aboutexpressing opinions and different per-spectives on power (working collec-tively rather than competitively).Additionally women were left out ofinformal networks and lacked rolemodels. There have been attempts to promotefemale leadership. The West KootenayWomen’s Association (WKWA) devel-oped and ran a free course for twelvewomen called Women’s CooperativeVentures from March to June 2003. Thecourse consisted of modules thatfocussed on management, marketing,business and financial planning, cus-tomer relations, labour relations and co-operative matters.

Gender roles and workThe social process of gender construc-tion shifts very gradually to accommo-date changing social norms. Howeverthere is an emotional investment ingender difference that maintainsunequal social relations between menand women (Starr, 2000). This inequal-ity means that women leaders are seenas women first rather than authorityfigures. Some men perceive genderequity in a competitive way; blamingfeminism for men and boys current‘disadvantage’ (Starr, 2000).Female leaders experience oppositionalbehaviours at the workplace because ofthis competitive view (Starr, 2000).These behaviours range from sexu-alised attention, hostility and aggres-sion, threatened violence or threats of

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negative professional consequences,professional sabotage and the continualundermining of their work. As femaleleaders climb higher up the organisa-tional ladder these behaviours increaseincrementally and have physical, psy-chological, behavioural and emotionaleffects on women (Starr, 2000). Men act-ing in these ways are too focussed ontheir own self-interest for the system tooperate in a co-operative way (Starr,2000).

The research on female leadershipThe views on female leadership in threeBC co-operatives were derived frominterviews conducted in the summer of2003. Results include various factorsthat limit women’s participation in co-operatives at decision-making levels. A pre-determined list of respondentswas developed based on case studiesand literature at the British ColumbiaInstitute for Co-operative Studies. Oneco-operative was visited and unstruc-tured interviews were conducted withleaders and staff members. The otherinterviews were conducted at a co-operative conference held in Victoria,BC in 2003. The research questionsbelow served as an interview guide,however the interviews were qualita-tive and open-ended.

1. Do women participate in regular,business or minor activities of theco-operative sector ? Are meetingsscheduled at times when women areavailable and are child care facilitiesmade available ?

2. Do female members run for electionas office holders ?

3. What is the ratio of men to womenon the board of directors or manage-ment committees and how does itchange over time ?

4. How many women hold leadershipor managerial positions comparedto men ?

5. Are there any legal, traditional orcustomary constraints to women’sparticipation in co-operatives ?

6. Are there more women leaders inco-operatives with more femalemembers ?

Preliminary resultsThe statements below reflect the opin-ions of the female leaders interviewed. One female leader claimed that somewomen do not give the necessary 9-to-5commitment to co-ops if they have chil-dren due to their perception of the flex-ibility of the co-op model. This com-ment may reflect a mismatch betweenwhat women with children were hop-ing for from the co-op model and thefemale leader’s previous experience inthe traditional business sector. Two co-ops with female leaders made decisionsin their start-up phases that were notcompatible with family or partner-friendly policies. They suggested thatonly co-ops with greater revenues andprofits could have job sharing pro-grams. This situation reflects the argu-ment made by Rhode (2001) thatwomen face two major workplace bar-riers in career advancement (that arenot co-op specific) : lack of opportunityand lack of social or supportive net-work for woman with children. Studies have shown that workingmothers are held to higher standards

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than working fathers (Rhode, 2001).Women who want flexible workplacesare said to be unprofessional. Womenwho seem willing to sacrifice familyneeds to workplace schedules are con-sidered to be poor mothers. Thesemixed messages leave lots of womenwith the uncomfortable sense thatwhatever it is they’re doing, they are inthe wrong (Rhode, 2001). One female leader claimed that womenhave to spend more time doing extraunpaid research to back up all theirideas and decisions with hard factswhereas men can just take a positionand be supported. Similar claims areseen in the literature (Rhode, 2001).Women often lack the presumption ofcompetence given to men. They areheld to higher standards; their compe-tence is rated lower and they are lesslikely to be viewed as leaders (Rhode,2001). A female leader in one resource-basedco-op was considered intimidating orabrasive if she asked pertinent or hardquestions. Other studies have showedthat women are rated lower when theyadopt so-called «masculine,» authorita-tive styles (Rhode, 2001). Women who were nominated to theBoard by one female leader sat pas-sively and silently at meetings. These“workhorses”’ took on Secretary andTreasurer roles. This particular obstacleto women’s advancement has beentermed “suffering from terminal nice-ness» (Young, 2003). Fear of beinglabelled «shrill» or a «feminist» deterswomen from speaking out (Young,2003). Faludi (1992, p.14) has claimedthat‘ … the anti-feminist backlash hasbeen set off not by women’s achieve-

ment of full equality but by theincreased possibility that they mightwin it. It is a pre-emptive strike.’ One female co-op leader claimed that anetwork of men meets to talk to eachother about her co-op’s performanceand she perceived this as “secondguessing” and non-confidence in herleadership. This network suggestedthat she should get her ideas adoptedthrough “drinking with the boys”rather than the board structure. In theliterature “drinking with the boys” isreferred to as masculine homosocialisa-tion - the mateship system of male affil-iations, which excludes women frominformal information sharing, decision-making and resources (Starr, 2000).These mateship activities also increasethe burden of household, child or agedcare responsibilities on the partners ofthe men involved (Starr, 2000).The following provides a brief over-view of the other concerns of femaleleaders.

1. Barriers associated with women’s leadership

• Women don’t find their voiceuntil they are at least 28 years old.

• Female leaders from small com-munities experience difficultiesbecause the co-op structure is per-ceived as entitlement to collectiveleadership.

• Women are involved in commu-nity-minded organizations thatare un-funded by banks and con-servative credit unions (sustain-able food, fair trade, other prod-ucts ‘with a conscience’ and foodsecurity).

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• Women are invited to meetings astokens – to give the appearance ofdemocratic decision-making.

• When motivated by fear, men askfor repeated studies of a project orbusiness in order to undermine orstop it.

• Co-ops that seek and receiveexternal funding are morerespected.

• Men think the co-op modelappeals to women because it isassociated with shopping – dis-crediting the co-op model.

• People in start-up co-ops havetime: they are already established,semi-retired or empty-nesters(typically male).

• Women are not respected in busi-ness circles unless they “flashtheir MBA’s.”

• Women who advance are careerbureaucrats rather than grassrootsoriented.

• Women are not honoured by themovement.

Inter-personal barriers• A strong communicator was told

by a male colleague that she wasnot communicating things prop-erly and was hard to understand –blocking her.

• In one co-op, items would be puton the Agenda for Board meetingsand then the meetings wouldrepeatedly run out of time. If thematter was left out of the Agendain subsequent meetings and thenbrought up in ‘other business’ themen would ‘talk over’ the femaleleader.

• Information for members in oneco-op was omitted from thenewsletter or changed after thefemale leader included itbecause the directors did notthink they should be answerableto the membership – top-downleadership.

• Directors in one co-op preferreda head table rather than a U-shape or round table.

• Women experienced resentmentif they earned competitivesalaries in small, community-based co-ops where pay scalesfor all staff were known.

• Small community populationsleads to limited choices for co-opand Board members resulting intribalism and inclusion of peoplewho are not qualified or commit-ted to the co-op model. Sabotageof persons and property can takeplace in these communities.

• Small communities have tremen-dous resistance to change, evenpositive change.

• Men bring their previous experi-ence of delegating tasks towomen to the co-op sector, theynever envision themselves doingminor jobs; this underminestheir female peers.

• Men take over co-operativesstarted by women as soon asthey become successful. Whenthe paid positions become avail-able men come out of the wood-work. These men sometimes tryto turn the successful co-op intoa business, which then fails.

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2. Women and men lead differently-according to the perceptions of theresearch participants• Men intellectualize the co-op

movement rather than focus onpeople solving problems.

• Men network informally in orderto get their ideas heard.

• Men show resentment if chal-lenged on their decisions and arenot always willing to discussproblems openly.

• Men are said to be more likely tothrow money at a problem and towant the ‘biggest, brightest, shini-est, newest technology’.

Female leadership• Women actively nominate other

women and youth to be directors.• Women lead from behind and

encourage and support their staff.• Women are training others to gain

management skills and replacethemselves.

• Women lead by example anddon’t ask others to do things theywouldn’t do.

• Some future female leaders withyoung children have already chal-lenged ego-led Board meetingsand asked for more structure.

• Some women do take their chil-dren and do breast feed at Boardmeetings.

• Female workers and workerswith family commitments havesacrificed salaries or under-paidthemselves in order to keep theirco-ops functioning. They were notsure that men would do the same.

ConclusionThe female leaders interviewed for thisresearch wanted start-up manuals to gobeyond the technical information andinclude this “fuzzy stuff” so that start-up co-ops can obtain funding to dealwith these problems.

These leaders felt that funding shouldbe made available to hire retired CreditUnion experts to sit on start-up Boards.It was expected that these retireeswould be the ‘power behind the throne’necessary for the female leader to standup to her male colleagues who were notnecessarily receptive to the co-opapproach but were using the model fortheir own short term advantage.

The co-op manual also needs to provideinformation to female leaders on howto manage their leadership roles andtheir relationships. Additionally theseleaders felt that start-up co-ops shouldobtain funding to train their staff inmanagement so that when the paidpositions do become available thewomen who started the co-op can fillthem from within. �

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ReferencesConn, Melanie, Ferguson Gretchen and WomenFutures. 1999. Conference Report.Women work in co-ops. October 16 and 17, 1998 [online]. Vancouver BC. [cited 16September 2003]. Available from World Wide Web (http://www.sfu.ca/cedc/coops/womincoop.htm)

Faludi, S. (1992) Backlash: The Undeclared War Against Women. London: Chatto &Windus.

Gilliss, Barbara. 1998. The Unique Qualities of Female Leadership. Women inNetworking, Prescott, AZ [online]. [cited 16 September 2003]. Available from theWorld Wide Web: (http://www.winaz.org/female-leadership.html)

Monopoli, Paula A. 2002. The Women, Leadership & Equality (WLE) Program at theUniversity of Maryland School of Law [online]. [cited 16 September 2003]. Availablefrom the World Wide Web: (http ://www.aals.org/profdev/women/monopoli.html)

Rhode, Deborah. 2001. The Difference ‘Difference’ Makes. Gender and Leadership[online]. [cited 16 September 2003]. Available from the World Wide Web:(http://www.ksg.harvard.edu/leadership/the_difference_difference_makes.html.)

Starr Karen, 2000. School-Based Management in the New Millennium: Gender andAttitudes to Local School Management [online]. [cited 16 September 2003]. Availablefrom the World Wide Web : (http://www.apapdc.edu.au/archive/ASPA/conference2000/papers/art_4_23.htm)

Standberg, Coro. Co-ops demonstrate that community involvement is more thandollarsThe Canadian Co-operative Association Newsletter. Autumn 2002. [citedNovember 23 2003]. Available from the World Wide Web : http://www.coopscanada.coop/NewsLetter/CSR/

Theis, Leona and L. Hammond Ketilson. Research for Action: Women in Co-opera-tives. University of Saskatchewan, Saskatoon: Centre for the Study of Co-opera-tives, 1995.

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AbstractThis is the outline of my PhD thesis onthe effect of social responsibility on thecompetitiveness of global marketfirms. One of the dominant models inbusiness is the one represented byMilton Friedman and the ChicagoSchool, whose key concern is increas-ing shareholders’ value. The approachis to present cases of some co-opera-tives in the world, not concerned withjust that issue but that are nonethelesscompetitive, as a challenge to the posi-tion that attention to social concernswill necessarily impede business effi-ciency. My hypothesis is that a firmcompeting within global markets canreally adhere to the seven co-operative

principles of the International Co-operative Alliance (ICA) and still becompetitive.

Market Economy and Its ProblemsLooking at the situation of thousandsof people in the world gives an idea ofhow selective the market economy isin giving opportunities for develop-ment. Many people suffer a lack ofopportunity, high inequality andunemployment (Olive, 1987, p59).Since uneven development is an inher-ent feature of the capitalist system ofproduction (Smith, N., 1990), capital-

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Making the Social EconomyWork within the Global Economyby Mikel Cid, PhD. Candidate *

* Mikel Cid, Bachelor in Business Administra-tion (BBA) from Mondragon University,Spain, PhD candidate from MondragonUniversity, SpainVisiting researcher in the Tompkins Instituteat the University College of Cape Breton,Sydney, Nova Scotia, CanadaFormer visiting researcher for six months in2002 in the Center for Co-operative Studies at the University College of Cork, Irelandmikelcid@ozu.es

Assisted on writing this paper by Dr. HarveyJohnstone, University College of Cape Breton,Canada.

ism creates problems that it cannotsolve. There are two clear kinds ofexclusion around the world (MacLeod,2003, personal communication): on theone hand class exclusion due to hugedifferences in income within a certainsociety, and on the other geographicalexclusion derived from the increasinggap in opportunities for economicdevelopment among different regions(Hudson, 2000, p99, p106).In order to solve those problems cre-ated by the free market system, thereare two possible approaches. On theone hand, there is public interventioninto the free market system, and on theother, there is an alternative approachto economic activity derived from adifferent model of firm, one that iscapable of surviving within the actualfree market system while pursuingsocial goals. We can say that the firstone is based on a macro approach,while the second one is based on amicro approach.

Free Market and PublicInterventionFree market is the clearest expressionof letting supply and demand workwith no external intervention. It refersto the freedom of market agents towork on their own. Price agreement, asany other issue, is the natural result ofthis dealing. Public administration, asthe rule maker within a country, hasthe power to interfere in economicmatters. Even the slightest externalintervention has effects within themarket system. There are differentpositions about the role that a govern-ment should play in economy.Even though public intervention may

be considered as a solution to the prob-lems created by the free market sys-tem, the work reported here will focuson the second solution; that is todemonstrate the value of an alternativeapproach to economic activity derivedfrom a different model of firm, one thatis capable of surviving within theactual free market system.

Business RationaleWithin the dominant free market sys-tem, supply and demand dictate themarket rules over most economicactivity. Product or service sellers onlysurvive if they are competitive, that isthey succeed in offering a better rela-tion than competitors between twovariables: the value they provide tocustomers and the price they ask(Johnson, 1990). Customers constantlychoose firms whose products or serv-ices offer the best relation of value andprice. Being competitive is what pro-vides a firm with long-term profitabil-ity (Johnson, 1990). If enough cus-tomers don’t buy the products orservices of a firm, the firm will havelosses, and if the firm is regularlydenied profits it will collapse. This uni-versal rule is as simple as it is true, andactually dominates the world.

Therefore, market laws make unviableany economic activity that does notsucceed in making profit. No firm cansustain losses indefinitely. Havingpositive results is essential; otherwise,the economic activity will have tocease (Solomon, 1997, p280), becausenobody is going to invest money tolose. Making profit is accepted asessential for survival, everybody mustdo it, simply because there is no other

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way, unless the firm has other kinds offunding that are not directly related toits economic activity. This is the case ofpublic enterprises, whose losses arepaid by governments.Within this worldwide context, theconventional way of doing business isbased on profit seeking. It is widelyadmitted that the purpose of any pri-vately promoted economic activity isto increase owners’ wealth that is, topursue individual self-interest.

Social ResponsibilitySome authors and groups disagreewith the idea of increasing sharehold-ers’ value as the only purpose of eco-nomic activity. They claim that busi-nesses should be concerned aboutmore than just economic issues{Arrow, 1973, p217) (Olive, 1987,p221)(Solomon, 1997, p76). At presentthere is a growing tendency to askbusinesses to be socially responsible.Even though there is no a generalagreement on what businesses shoulddo, there is a theory called CorporateSocial Responsibility (CSR) that is themost supported and most extendedexpression of this wish ever {Hender-son, 2001a, p39).There are different points of view onthis topic. On the one hand, Friedman,in his most famous statement, says thatthe social responsibility of business isprofit-making (Friedman, 1962, p133,p134). For Friedman any distractionfrom this single responsibility will ofnecessity reduce the firm’s ability tomake profits. On the other, Sen (1992)makes an interesting distinctionbetween ”public goods” (Samuelson,1954) and “private goods”. “Public

goods” are those of which one person’sconsumption does not exclude that ofanother, while “private goods” arethose of which one person’s consump-tion does exclude that of another. Headds that market mechanisms, sincethey are based on profit maximization,work badly regulating the distributionof public goods. For Sen the overallsuccess of the firm is a public good, aslong as all benefit from it, “to which allcontribute, and which is not parceledout in little boxes of person-specificrewards strictly linked with each per-son’s ‘respective contribution’”. Heconcludes that “… this is preciselywhere motives other than narrow self-seeking become productively impor-tant” (Sen, 1992).

It is precisely this distinction betweenpublic and private goods what givesus an idea of the nature of a newapproach in doing business. The logicbehind this need is basically theimpossibility to develop any economicactivity without taking into accountthe needs and wishes of all the agentsaffected by its functioning. Wideningthe concern of a firm beyond its own-ers and managers, and including thecommunity as a real stakeholder, is theraison d’être, and not the consequence,of this fact. It will be clear evidencethat it is the market where this needcomes from, like requirements of priceand quality, even though its origins arereally much deeper, what will makefirms understand that having socialresponsibility is a competitive advan-tage rather than an externally imposednonsense and weakening obligation. As long as this process is also a matterof acquiring knowledge, the specific

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internal structure of a firm will influ-ence its adaptability to everyday prac-tices. When finally social responsibilitygained market value, it is obvious thatfirms used to work under some princi-ples of social responsibility will have acompetitive advantage to pursue.

Social Economy withinDominating Global FreeMarketDepending on the motivation that drivesany economic activity, there may be dif-ferent ways of doing business. However,within the actual dominant free marketsystem, there is an absolutely dominantway of doing business that is, doingbusiness with the main concern beingprofit through increases in shareholders’value. These firms act in a different wayfrom firms whose main concerns includesocial improvement of the workerand/or community. We can express thisas the difference between making profitas the main purpose of the firm andmaking profit as a means to pursuebroader ends. When managers make decisions theycan be exclusively focused on issuesrelated to economic performance orthey can focus on issues that have nodirect link with economic perform-ance, such as social or environmentalissues. Friedman, however, thinks thatany motivation not related directly toconventional matters, in seeking eco-nomic efficiency within a firm, impliesadditional costs and will result in inef-ficiencies. He concludes that within thefree market system competitors solelyconcerned with profit will drive sociallyresponsible firms out (Friedman, 1962,p109, p110).

If there were no problems, there wouldnot be any need of firms with a differ-ent organization and a differentapproach to doing business. It wouldmake no sense to change any model ofdoing business if it did not cause prob-lems. Friedman accepts that capitalismcreates problems, but from his per-spective, capitalism will create fewerproblems than alternative systems andwe have to live with problems it cre-ates. In other words, capitalism mini-mizes our problems but any attempt toeradicate them entirely will fail; wecan’t do any better than this. If one dis-putes this position, the challenge is tofind an alternative approach that notonly reduces the problems generatedby the dominant model but also avoidscreating new problems. Any differentmodel to the dominant one is reactive,because it is driven by a reaction to acertain situation created by the domi-nant model. Also, with a firm that hasthe conventional kind of limitedorganization described above, “it is notan easy job to turn profit-driven com-panies into principle-driven ones”(Olive, 1987, p121).

The Social EconomyFirstly, in a broad way and focusing onmotivation, Social Economy might bedefined as all the economic agents forwhich the social improvement ofmembers and society is a key factor indecision making as distinct fromagents which make profit the key fac-tor in decision making. And secondly,in a narrower way and focusing onorganization, as all economic agentsexcluding government owned corpo-rations that remunerate labor, where

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decision-making is based on the per-son instead of the amount of capital,and equity and profit belong at leastpartially to community.

Focusing on some common points ofthese definitions, Social Economy pres-ents some features that make it differ-ent from dominating firms within cap-italism and communism. Members’participation in decision-making hasbeen systematically denied in firms inboth capitalism and communism. Themain difference between both systemsand Social Economy, however, hasbeen the primacy of capital over laborin capitalism and communism. Laborhas always been a hired resource.These two factors are radically differ-ent within the Social Economy.Membership per-se gives the right toparticipate in decision-making, and itis the service (work, credit, con-sumerism, housing, health, educa-tion…) that hires the capital to makethe activity possible. It is said thatwhile in capitalism and communismcapital hires labor, within the SocialEconomy just the opposite happensdue to the primacy of labor over capi-tal. Co-operatives are the commonestkind of organization within the SocialEconomy, but there are others as well,and the author considers that today itis necessary further research in thosepractices that Social Economy is com-posed of.

However, there is a large amount of lit-erature in determining the possibilitiesof the Social Economy. Among them,Friedman is probably one of thestrongest opponents. He emphaticallysays “no” to it, because in his view achange in orientation can change the

capitalist rationality. Friedman’s viewis said to have prevailed both in busi-ness and society (Olive, 1987, p57).Capitalism has its own rationality, itmust focus on satisfaction of individ-ual needs, “the essence of the doctrineof the Chicago School was that sincethe dominant trait of humankind isavarice, it is useful to create an eco-nomic system that recognizes greedand harnesses it” (The InternationalEncyclopedia of Public Policy and Ad-ministration, Ed. Shafritz J. M., 1998). The aim of this project is to testwhether attention to social concerns isnecessarily an impediment to businessefficiency, using the following metho-dology.

Methodology The methodology used to measuresocio-economic duality will be basedon designing and using two score-cards : a social scorecard based on theseven co-operative principles designedby the ICA as an internationally recog-nized standard and an economic score-card based on indicators from RobertKaplan’s Balanced Scorecard (BSC)and other internationally recognizedliterature.

Both tools have been chosen becausethey are accepted worldwide. TheInternational Co-operative Alliance(ICA) with its seven hundred millionmembers is a widely known organiza-tion, as well as its seven principles.Some research is necessary though, inorder to develop indicators from eachprinciple. This is the only way to meas-ure the meaning of each principle,because the broad definition givenabove may be interpreted in more than

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one way. All the co-operatives that are members of the ICA have actuallyaccepted those principles, so theyknow them.Kaplan and Norton’s BSC is widelyrecognized as a tool to put strategyinto action. It is used worldwide byvery different kinds of organizations.It has brought a great revolution in thefield of measuring performance, whichwas its original purpose, because itproposed a new idea of balancebetween different categories instead ofthe classical financial accountability.Today, this tool that was born underthe umbrella of the Harvard BusinessSchool has been translated to multiplelanguages and is a central field ofstudy for many academics.Firms in this project will be industrialworker co-operatives chosen in each ofthese three regions, Quebec, Mondra-gon and Emilia-Romagna. Since theseplaces are well known to have a deeplyrooted co-operative tradition, it ismore likely to find socially concernedworker co-operative firms than in anyother place. There are some criteria to choose suchfirms:1. Being manufacturing firms (Tech-

nology, automation, assembly lines,CAD/CAM,…)Manufacturing firms are more likelyto be coping with global competi-tors than agricultural or servicesones, because manufacturing firmsare less likely to be geographicallylocated in the market of just a cer-tain area, and their competitors are,too. As well the higher technology,automation and use of CAD/CAMor similar techniques a firm has, the

more likely it is to have global com-petitors.

2. Working within global marketsSince global markets represent theclearest and purest form of capital-ism, they are more likely to have ahigh level of competition. Marketsprotected by barriers limit globalcompetitiveness. The more globalthe markets of a firm are the moredifficult surviving within them.

3. Having a significant competitor any-where in the world which is not aco-operativeSince co-operative firms are sup-posed to be working in apparentdisadvantage in comparison to com-petitors that are not concernedabout the seven principles, testing aco-operative firm competing with asignificant competitor that is not aco-operative represents proving ifthe apparent disadvantage is real ornot.

4. Being economically successful

They must be economically success-ful according to the opinion and cri-teria of literature written of thosefirms or the opinion of academicscontacted in the area. The criteriawithin this point will be marketshare growth, profit growth, salesgrowth, job growth and lastingmore than 10 years.

The purpose of this criterion in par-ticular is to get a sample of firms apriori more likely to be economi-cally successful in the final testaccording to the designed competi-tive scorecard, which will showhow competitive each firm is.

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5. Being a formal co-operativeThey are legally registered as co-operatives according to the law ineach country, Canada, Italy andSpain, so that they have a differentstructure of ownership in compari-son to the limited firms.

6. Being located in Quebec, Mondra-gon and Emilia-Romagna, environ-ments where co-operativism is“embraced”These places are well known to havea deeply rooted co-operative tradi-tion, and therefore more likely tohave socially concerned co-opera-tive firms.

7. Appearing to adhere to the ICA co-operative principlesThey must not only ‘accept’ but also‘adhere’ to the seven principles ofthe ICA according to the opinionand criteria of literature written ofthose firms or the opinion of aca-demics contacted in the area.The purpose of this criterion in par-ticular is to get a sample in each areaa priori more likely to adhere to theICA co-operative principles in thefinal test according to the designedsocial scorecard, which show howcommitted to those principles eachfirm is.The firms finally chosen will betested twice. Firstly they will be ana-lyzed through a social commitmenttest and secondly on the otherthrough an economic efficiency one.The social test will be composed ofseveral indicators related to theseven principles of the ICA, and theeconomic test will be composed ofconventional indicators acceptedworldwide.

Designing the social scorecardEach of the following co-operativeprinciples of the ICA showed belowhas different dimensions, and eachdimension has different indicators.• Voluntary and open membership.• Democratic member control.• Member economic participation.• Autonomy and independence.• Education, training and informa-

tion.• Co-operation among co-operatives.• Concern for community (The

International Co-operative AllianceStatement on the Co-operativeIdentity. ICA, 1995, p16, p18).

There have been different attempts todevelop a scorecard to measure thesocial concern of co-operatives.Alongside with the increasing concernabout social responsibility in conven-tional business, co-operatives havedeveloped different attempts to meas-ure their social concern. In Spain, onthe one hand Mondragon Co-opera-tive Corporation (MCC) has devel-oped its own indicators for internalsocial auditing of the multiple co-oper-atives established under its umbrellaand on the other, Mugarra (2001)developed a large list of different indi-cators based on those principles aswell. In Japan, Tsuda (2003) worked onthe study developed by Co-op Kobe,the biggest consumer co-operative inthe world, based on developing differ-ent indicators from some co-operativevalues and some economic goals, andcomparing them along time series. InCanada, the Co-operative de Devel-opment Regional de Quebec (CDRQA)under the direction of Perron (2003)

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has developed a list of indicators basedas well on the ICA principles. Besidesthey have designed an evaluationmethod based on the ISO model, thatseems to be an attractive solution to theproblem of lack of social standards(Black, Frederick and Myers, 1976, col-lected in Bowie, 1982, p42) to comparethe performance against. The short tra-dition of social accounting, if we com-pare it to the conventional accounting,is the reason for this problem. It isobvious that more research is neces-sary to provide some standards tocompare the social performance offirms.

Designing the competitivescorecardThis competitive scorecard will bebased on Kaplan and Norton’sBalanced Scorecard (BSC) as “a leaderin performance measurement (PM)and performance management” (Ama-ratunga, Baldry and Sarshar, 2001).Significantly, a survey of 1400 globalfirms in the USA “shows almost 50percent apply some kind of BSCapproach” (Littlewood, 1999, cited inAmaratunga, Baldry and Sarshar,2001), which goes further than the con-ventional financial measures. Kaplanand Norton say that “financial meas-ures are lag indicators; they report onoutcomes, the consequences of pastactions”, and that “exclusive relianceon financial indicators promotedshort-term behavior that sacrificedlong-term value creation for short-term performance” (Kaplan & Norton,2001, p3). The BSC approach is clearlypreferable : “While retaining an inter-est in financial performance, the

Balance Scorecard clearly revealed the drivers of superior, long-termvalue and competitive performance”(Kaplan & Norton, 2001, p22, p23).Kaplan and Norton affirm, on the onehand that competitive advantagetoday has more to do with “the intan-gible knowledge, capabilities, and rela-tionships created by employees thanwith investments in physical assetsand access to capital” (Kaplan &Norton, 2001, p3) and on the other that“Intangible assets such as the skillsand knowledge of the workforce, theinformation technology that supportsthe workforce and links the firm to itscustomers and suppliers, and the orga-nizational climate that encouragesinnovation, problem-solving, andimprovement” can contribute to valuecreation (Kaplan & Norton, 2001, p66).Since originally the Balanced Score-card was a tool designed for measure-ment, it must be a proper tool to meas-ure the competitiveness of the chosenco-operatives. It is based on the follow-ing four perspectives :• Financial : The strategy for growth,

profitability, and risk viewed fromthe perspective of the shareholder.Five measures (22 percent).

• Customer : The strategy for creatingvalue and differentiation from theperspective of the customer. Fivemeasures (22 percent).

• Internal business processes: Thestrategic priorities for various busi-ness processes, which create cus-tomer and shareholder satisfaction.Eight to ten measures (34 percent).

• Learning and growth: The prioritiesto create a climate that supportsorganizational change, innovation,

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and growth. Five measures (22 per-cent). (Kaplan & Norton, 2001, p22,p23, p375).

ConclusionOnce the firm is declared as an adher-ent to the co-operative principles thereare five different answers to thehypothesis :

1. Negative. Yes, as a result the firm isless competitive, without principlesit would be more competitive.

2. Neutral. Yes, co-operative principleshave nothing to do with competi-tiveness.

3. Positive. Yes, co-operative principlessupport competitiveness.

4. Double positive. Yes, without adher-ing to principles the firm would notbe competitive.

This research is based on the CaseStudy method, which is generally usedas a qualitative research method, how-ever, this methodology proposes somenumeric indicators and the way to bemeasured and evaluated, thus theprocess will represent quantitativelyboth the social and the economic per-formance of those firms. Therefore,through this quantitative reality themain contribution of this research proj-ect is the potential empirical demon-stration that a high social concern isnot necessarily an impediment for a

high economic competitiveness. Theobjective is to test whether everydaypractices linked to the seven principlesimpair everyday economic practices,as well as to test the possibility thatboth are either independent or perhapseven supportive. This project may pro-vide empirical credibility to the notionthat co-operatives are efficient busi-ness organizations that are able to sur-vive in more and more complex condi-tions that firms confront within theglobal economy. As a result, it is obvi-ous that this project will open furtherresearch needs in such fields like co-operative management, entrepreneur-ship and community economic devel-opment.

Writing doctoral thesis in Social Eco-nomics, focused on the value of socialmotivation, different to profit-makingmotivation asserted as unique byMilton Friedman and other authorswithin Chicago School, as the maindriving force in making efficientwealth creation within the global econ-omy. Based on a theoretical back-ground and an empirical study withinworker co-operatives in Quebec(Canada), Emilia-Romagna (Italy) andMondragon (Spain), researching ifattention to social concerns (ICA’sseven principles) is necessarily animpediment to business competitive-ness (Kaplan’s Balanced Scorecard) isthe goal of this project.

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Recovered CompaniesThe last three or four years in Argen-tina, have been the scene of intensesocial struggle, that have induced theirruption of new actors, and new origi-nal forms of unrest. The structural conditions, the economicsituation, the unemployment, the insti-tutional weakness, and the fear thatproduced the possibility of social dis-membering, are pieces of a never seencrisis, that conform a critical scenery. Inthis context the processes of recoveredcompanies break out, expanding withunknown strength all throughout thisperiod, where we found more or less170 productive unities.The following analysis is the result of acollective social research, based on theinformation recollected from the sur-veys done to more than 85 companies,and from the ´in deep´ interviews. Thisarticle is a brief summary of a booknowadays being published.

PeriodizationThe company take over has been a prac-tice used by the Argentinean workers inseveral moments of their history. The

political opportunity structure, the con-ditions and resources of the laborer’smovement, the role played by the tradeunion’s heads, and the offensive strate-gies the workers carried out in that con-text, are very different from the newprotest cycle opened in these last fewyears. After the backward movementthe neoliberal politics meant for theworkers, the taking over strategy andthe recovery of the companies repre-sents a defensive strategy –almost des-perate- that inserts basically in the sur-vival of the company and the main-tenance of the jobs.In the second half of the nineties, it canbe seen an increase in the protest cycleof salaried workers and unemployed

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Companies in Crisis -Worker’s Self Managementby Gabriel Fajn *

* Gabriel Fajn is a sociologist. He is a ResearchArea Coordinator with the Social SciencesDepartment at the Cultural CooperationCentre and a Lecturer in OrganizationalSociology, Universidad de Buenos Aires,Argentia. gfajn@yahoo.com.ar

ones; and the appearance of some com-panies that are going through criticalsituations.From the year 2000, to December 2001,there occurred a rapid intensification ofthe unrest, and a significant increase inthe amount of the companies that weretaken over. Since December 2001,important modifications are shapingthe company recovery phenomenon.The recovery processes acquire morepublic visibility and social support. Agreater articulation can be seen bet-ween the companies that are recoveredor in the process of recovery, and alsoget together in different groups as waysof representation : National RecoveredCompanies Movement (MNER); NationalFederation of work co-operatives of Recon-verted Companies (FENCOOTER); thosethat demand laborer control (control ofproduction), among others. Finally thereis an appearance of new organizedsocial actors, such as the neighborhoodassemblies, that actively take part in thetakeovers and camping of some compa-nies; and in other cases they even get topromote and directly propose theirreappropriation.

Actors and strategiesThe strategies displayed by the businessmenIt seems that the social defeat that thesalaried sectors suffered with mostintensity during the 1990´s, did not onlyproduced a huge deterioration in theincome redistribution, important lossesof the historical conquests reached bythe workers, increased flexibility of theworking contract, but also as “compen-sation”, it got installed among the busi-nessmen the idea of moral and legal

deregulation; thus, building a kind of“impunity habitus” where many busi-nessmen disregarded the elementarymatters in the observance of the law.Only over that supposed consensus andsocial atmosphere of impunity in whichthey were inserted and a deep anomia,the whole fraudulent practices thatmany of them carried out can be under-stood.Anyway, the businessmen did notadopt a homogeneous behavior, andstated different resolution strategiesfacing their company’s crisis, and thepossibility of their closing. 1. The businessmen (former owners)

did not display (did not want orcould not) fraudulent or emptinesspractices facing the cease of the com-pany’s activities.

2. Fraudulent bankruptcies and empty-ing out maneuvers. Mechanisms directed to :

� Create new debts with fictitiouscreditors

� Increase the debts already assumed,in order to negotiate and compen-sate economically a few creditorsoutside the legal scope

� Do not state part of the goods andtake them out surreptitiously fromthe industrial plant.

� Eliminate from the stocktaking –pre-vious arrangement with the trustee-part of the machinery the companyowned.

The resistance carried out by the workersThe company recovering processbrought to light a group of novel andconfronting practices adopted by theworkers, concerning the economic crisis

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of the companies, and in the legal set-ting. Not only did they present legalstrategies through their lawyers, butalso they carried out direct actions inthis way: questioning judges, supervis-ing the stocktaking, and watching overthe machinery and goods.

From the conflict to the managementWe can say that the intensity of the con-flict was developed since the particulardynamic of each organization, and theadopted strategy by the businessmenfaced to the crisis, and the resistancelevel that the workers opposed (forcemeasure). From the two variables – force measureand duration – we have constructed anew one, which we have named ́ conflictintensity´, to distinguish between thosecompanies that did not adopt any forcemeasure and got an immediate solution(low intensity), and those that carriedout any type of measures (companyoccupation, takeover, camping) and hada longer duration (more than a month)which we assumed of high intensity.It is possible to establish an importantrelationship between the intensity theconflict acquired in the companies, andthe management initiatives adopted bythe workers, during the first momentssince the set on of the company recov-ery processes.The collective social dynamic, pro-duced a non planned qualitative jumpthat represented going from the border-ing threat, which the closing of the com-pany supposed, to a collective manage-ment. An unthinkable breakdown inthe company’s history – and most of thetimes not even desired – that compul-

sive and immediately integrates thesalaried, to manage their organizationsdestiny. There are no formal learning’s,nor previous assessments, just the con-flict and the dispute that mediatesbetween the workers that had a securesocial disaffiliation path, and the newcollective role they had to assume tomanage the company.What must not be understood and ana-lyzed in a splinted way is the intensityof the dispute carried away by theworkers in each company, and the reor-ganization of the companies since thenew management practices. We greatlyconsider that the conflict level, reached,acquired, impregnated, and establishednew ways of ́ know how´ in the reopen-ing of the companies. This moment willhave important effects in the con-structed ties within the workers, in thecollective practices they experimented,and in the learning’s they incorporatedsince the dispute; becoming therefore amovable continuity between the dis-pute’s depth and the characteristics ofthe new model.From a self management point of view,the reconstruction of the organizationalspace has as a prior task, that of therestructuring the capital-labor relation-ships, that are extremely hierarchizedones, relations of obedience and submis-sion, and that in the small and mediumcompanies were generally accompaniedby an essential «paternalism» as dis-torted model of the management.

Self-management processesThe work to façón, «this is, sale of theprocessed industrial service to clients whoprovide the raw material and take out theproduct for its marketing or later transfor-

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mations», is one of the most commonstrategies the workers carried out, tocapitalize and to balance again this sit-uation during the initial moments. Thismodality of work achieves the initialaims of preserving their jobs, restartingthe productive cycle, as well as recover-ing the clients and supplier’s trust;though on the other hand, it implicatesthe reducing of the income levels, and«generates ties of dependence with theclients - suppliers» (Sancha, 2001).Consequentially, it is generally per-ceived among the workers as a tempo-rary situation, until they can manage toobtain the raw materials. As a consequence of these initial condi-tions, the majority of the companies areworking at a lower level than that oftheir productive capacity. The results ofour study indicate that, among therecovered companies that were operat-ing, the average capacity utilization isnear to 55%, being lower than 30% inhalf of the cases.On the other hand, because of the pos-sibility of better opportunities in otherjobs, the negotiation of the retirement,and for the existence of a major solidar-

ity with the employers, there are fewcases where hierarchic and/ or profes-sional levels stayed (near 20% of thewhole of the companies in activity,descending to about 15% between thosewho passed along more intense levelsof conflict during the recovery process).Likewise and probably for similarmotives, and though slightly major,there are also few cases where adminis-trative personnel stayed (44% of thewhole companies in activity and 33% ofthose who passed along high levels ofconflict). Though the majority of the workershave preserved their jobs, the need tocover the administrative and commer-cial positions facilitates a major rota-tion and polyvalence of the workingplaces as well as a major flexibility inthe division of tasks. Now then, concerning the remuneration criteria,about 70% of the entrepreneurs inactivity have imposed egalitarianremuneration criteria, percent thatclimbs to 85% between the companiesin which neither hierarchic, nor profes-sional, nor administrative personnelstayed.

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Hierarchich /administrative personnel Total

permanency

No (%) Yes (%)

Egalitarian 84.4 55.6 69.1

Remuneration Previous remuneration criteria 6.3 22.2 14.7

criteria By productivity (worked hs.) 6.3 8.3 7.4

No data 3.1 13.9 8.8

Total 100 100 100

Table N° 1 – Hierarchic / administrative personnel permanency by remuneration criteria

Those processes where necessarilydeeper changes have been imposed in theorganization logics and in the division ofthe work, the adoption of remunerationcriteria, based mostly in considerations ofjustice distribution, than in a stratificationcriteria of the working places. The egali-tarianism in the remunerative criteriaacquires, for many of these co-operativesocieties, a symbolic content in whichunity and solidarity principles areexpressed, built and learned during therecovering process.On the same way, it is common for allthese companies the adoption of assem-bly practices, for the taking of decisions.And though this can stem from the adop-tion of the co-operative form as a legalway of functioning (adoption that corre-sponds mostly to a pragmatic criteria,than to an ideological one), in many ofthem, as a consequence of the organiza-tion and involvement of the workers dur-ing the recovery, there have taken placereal situations of greater democracy inthe taking of the decisions to the interiorof the company. That is to say, that though the adoption ofco-operative ways of organization firstlyhappen because of pragmatic or legalmotives, soon begins to generate a learn-ing process in which the formality gives

step to real situations where the democ-racy and transparency in the manage-ment of the companies, turns into astrategic center of the organization.The conflict that breaks up with the clos-ing of the companies must be understoodas the break of an “agreement” betweenthe workers and the employers. This sit-uation opens the path for the emergencyof new ways of entail, through an infor-mal learning process, and generallyguided by pragmatic motives. In otherwords, the success of these organizationsseems to be related to the capacity of theworkers to articulate new logics of workorganization, through the tools that theco-operative and self management orga-nization offers. In this aspect, factors such as the elimina-tion of the employer’s and managementcosts, greater flexibility in schedules ofwork and in remunerative levels, as wellas the decrease in the conflict and thegreater involvement of the workers in theproduction management, appear as theelements that allow these experience togo ahead. The following tables suggestthat in fact, the success of these initiativesis greater in those companies where theprocesses have been more troubled andwhere the changes have been deeper.

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Low intensity 36% Yes 40%

High intensity 70% No 70%

Total 54% Total 54%

ConflictIntensity

Production capacity in use

Hierarchic /profesional personnel

permanency

Production capacity in use

Based on companies in activity

Table Nº 2 – Production Capacity in use by Conflict intensity and Hierarchic Personnel permanency

But though the exploration of thepotentials of the co-operative logics ofwork organization seems to be one ofthe factors of success of these experi-ence, the lack of the initial capital aswell as the difficulty of acceding to

credits or other forms of financing,impedes the possibility of changingthe precarious situation that charac-terizes the first stages of developmentof these companies.

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Table Nº 3 – % of work to façón by production capacity in use

Up to 20% 53% 12 49%

21% a 50% 48% 16 48%

More than 50% 41% 11 44%

Without inf. 27% 7 46%

Total 44% 46 46%

Production capacity in use

% mean of work to façón Cases Std. Desv.

Based on Companies in activity

PerspectivesThe worker’s self management of thecompanies becomes a new social phe-nomenon that takes importance in theArgentinean reality, through collec-tive practices that can be understoodas expressions of this crisis, and asexplorative replies in alternative man-agement modalities.The conformation of co-operatives–and other associative ways- becomesthe most viable solution that theworkers find to this adverse situation.Thus, the collective property of theproduction means1, and the demo-cratic participation in the manage-ment are combined. The disputeprocesses are strongly related to theself management way that eachorganization has assumed. This canbe observed in the practices that havebeen carried out internally: egalitar-ian remuneration levels, collective

levels of decision, ways of representa-tion, delegation and control; assemblydynamics, etc.The self-management processes willdemand of prolonged periods fortheir consolidation, will go throughadvances and setbacks and will beriddled with tensions and contradic-tions, though they can verify interest-ing steps in this direction where theassembly practices are outlined forthe making of strategic decisions, theamplification of the participativeframes, the constitution of delibera-tive instances and little by little thedevelopment of certain collectiveknow how of the management.The know how of the management willbe a new and important territory of dis-pute, the collective reappropriation ofthe management from the companyand the construction of organizationalinstances (review procedures, revoca-

bility, transparency of the information,etc.) will be the vertex of a new organi-zational model. Collective know howthat constructs a new logic of power.(Foucault, 1975)The self management of the companiesis used as a survival strategy, throughthe creation of alternatives of insertionin a ´globalized economy´ that pleadsfor the exclusion and, even it might besaid, it takes part of a social “rescue” ofthe subjects by themselves.

Coordinator : Fajn Gabriel

Members : Bustamante FernandoBauni NataliaCaffaratti Julieta Cha NicolásDe Felice AndreaGofman Cecilia Help Camila Zukernik Gisela

99

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estibadores del puerto de buenos Aires”, Centro editor de América Latina,Instituto de Investigaciones de la Facultad de Ciencias Sociales de laUniversidad de Buenos Aires, Buenos Aires, S/D.

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estudios de caso. Bs. As, Centro Editor de América Latina, 1994.• Giddens, A. : La constitución de la sociedad : bases para la teoría de la estruc-

turación, Bs. As. Amorrortu, 1998.• Giddens, A.: Las nuevas reglas del método sociológico, Bs. As., Amorrortu, 1987.• Gutierrez, P. Y Roggi M. C. : Cooperativas de trabajo y redes sociales : las estrate-

gias de la gestión solidaria. En : Cuadernos de Economía Social, V. 3, N° 5, julio 97.

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As. Ministerio de Economía y Obras Servicios Públicos, 1994.• Quirós, G y Saravi, G. La informalidad económica : ensayo de antropología urbana.

Bs. As. Centro Editor de América Latina, 1994• Revilla Blanco Marisa : EL concepto de Movimiento social: acción, identidad y sen-

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trabajo en la provincia de Bs. As. Buenos Aires, CEST/U.B.A, 2001• Sancha, José F. Recuperación de fuentes de trabajo a partir de la autogestión

de los trabajadores. Revista Realidad Económica n*173. marzo 2001• Sennett, R. La Corrosión del carácter : las consecuencias personales del trabajo en

el nuevo capitalismo. Barcelona, Anagrama,1998• Vuotto, M. El desempeño organizacional del cooperativismo de trabajo. Bs. As.

CEDES, 2000

Note1 Guaranteed by expropriation laws that contemplate the machinery and real

estate availability for the period of two years, and that have been enacted bythe municipal and provincial governments throughout 2002.

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