Co-Operative Economics Management – Factors Affecting Growth, Establishment of Cooperatives in Society



Over the decades, scholars have studies extensively into the concept of certain industries. Some studies causes of failure while others specially went into the study of government interference in the business of industries and the effect on the employees. A few studies were conducted also as to the causes of failure of cooperative societies. All these studies were carried out from different point of views, but they all arrived at conclusion that business fails for some reasons.

However, the literature for this study was reviewed along the following lines:

1. Definition of factors.

2. Government interference in the management of the industries/co-operative.

3. Dysfunctional worth Ethos.

4. Organizational industries problem.

5. The spirit of co-operative expertise.

6. Summary.



The word factor ordained from latin word fall, which means factor. It can be literally be defined as that break down or of a predetermine objective.

The Oxford Advance Learner’s Dictionary of current English defined factor as circumstance helping to bring a result. Failure as a concept has been defined by different field of discipline, the same is factor which is seen as independent to the progress of a phenomenon causes of failure in business manufacturing industries according to Owen (1981) as one work or employment to make or produced by machinery in factory and large organizations generally. Also Knoot (1990) define it as the accomplishment of desired objective by establishing environment favorably to performance by people operating in organized group.

Furthermore, the international dictionary of management (1975) added that it is the process of unsuccessful break down, insufficient. This therefore means failure of predetermined objective.

Another definition by Kelth (1985) and Gubelline stated that failure of business manufacturing industries has become a specialized function. In another definition, Hollit (1970) said failure of a business consist of the relational assessment of a situation and the systematic selection of goal and purpose (what is to be done) the systematic development of strategies to achieve these goal. In another study conducted Newcomb (1980) define it as a process where by manufacturing industries falls due to mismanagement of that organization. Definition by Vivon (1564) it can be define as the inability of the industries to carryout its essential duties in the manufacturing industries. On the other hand, Dubin (1976) said that it is a process whereby a predetermined objective is not achieved.

Furthermore, Chisnel (1974) put it as a process whereby organization or industry find it difficult to accomplish its aims and objectives due to certain circumstances.

Consequently, in all the definitions given and the problems which manufacturing industries after, they entangled includes.



Government formed by political parties, on the basis of national and security reasons have a right to establish government owned industries based on the following principles:-

a) That there are no private sector entrepreneurs capable of building such industries.

b) That economic rather than political principles and the management of such industries.

c) That members of the board of Directors – are truly representative or the business factor of the economy and equitable represent the other registered political parties in the state to ensure long tenure of the Board members, despite changes of government, when the above principles are satisfied on the alter of political rewards for service rendered to the party both board members and managing Directors finds it difficult to believe that economic objective of the companies established with tax papers money.

Commercial activities low, resulting to slime flow of money. When commercial activities are not moving fine, things tends to be generally bad and that affect growth of industries in such area. Is it not heart rendering that the initial high cost of machine buildings and infrastructures of government owned companies is usually due to percentages allegedly paid to political parties and functionaries who make final decision an who the contract. Once the percentage is accepted, one has to be considered to speak up and protect the taxpayers who own the industries. How can we explain the inability of government and its functionaries to pay the credit facilities extended to them by state owned enterprise?

The story had it that one Mr. (X) a government member of industry who never attended meeting, jump in at will carting away with some product of the industry without paying for them and even made and fictions millegices claims for January not made, yet nobody raised a finger against him because he is well connected and protected by the power of the industries.

The second economic reasons are sacrifice at the center of vote caching and this determines where an industry should be sited. The Sokoto cement industry, the Kaduna refinery, etc are typical.


The bad attitude to work of Nigerian caused by the concept of “white men’s work” (olu Oyibo) got so bad that many public servants joined the services neither to serve nor even to be served themselves at the expenses of the industries. This title had drawn the attention of numerous writers for instance, Ejionye (1984) stated that typical Nigerian workers today (1981) is lazy, indolent or careless. He avoids work and responsibility but loves money, wealth and all the good things of life. The Nigerian worker is material oriented, pleasure seeking and egocentric and wants to get recognized treated with respect the man at the head, in charge of affairs the “Onyeisi.”

Echo could not agree with the above view when he asserted that the typical Nigerian policemen, teacher, Doctors, Engineer, Postal Clerk and others can be relied upon to be the long non-challant in their industrial duties. In the words of Nigerian church dignitary, “more and more people seem to be allergic work while claim fantastic better conditions rather than on service.

Thus, in such environments enumerated above, it will be miraculous to see any government owned industries performing. Another problem that has hindered the operational efficiency of government owned companies is the one that hinges on intergrity.



The worst enemy of the public is a corrupt public servant. How can a chief executive make hastily purchase of a caning machine in a cooperative societies which later on turned out to be modes, antiguated and break down after a week or even not put to use, except there is that characteristic in him that makes him use his position to a great disadvantage of his industry.


How can a board member be allowed to carry away some product of the company without paying for them and nobody raised a finger, even general manager, except there is some continuance to defraud the company. How can dead men continue to be the payroll of his industries, unless someone keeps him alive in the book of his industry?

How feasible and prudent is it for a chief executive to want to reform that factory house when there are other priority needs, promotes an account clerk to the rank often account when there are other qualified and superior officers in the rank and file. If there is no plan between the two to collaborate in order to run down industries?

How can we explain the fact that years after referred chief executive in a paint industry left the company to see if his own turned to buy up packing racks and empty cans from the industry?

How can a contractor collect mobilization fee and disappear or unequalled contract or win a contract or the winner executive a substandard work and get the approved unless the agreed percentage have been paid to the appropriate public official hired to prevent all these?

All great countries recognized that civilization are bone on the shoulder of public officials of proven integrity. Thus, in ancient Egypt each governor on being appointed was instructed:-

“It is abomination of the goods to show partiality. You should regard him who is known to those like him who is unknown to thee; and him who is near like him who is far.” An official who does like them shall flourish in this place. In the ld testament of the holy Bible, when Moses face the challenge of his life time organizing the Hebrews for the forty year journey in the desert, he was advised to:-

“Chose able men from all the people such that fear God, men who are trust worthy and who hate bible and place them over the people.

The Nigerian constitution recognized the critical role integrity played in industrialization effectiveness, and make elaborate provisions to ensure that only honest men are placed at the helm of affairs, for instance the code of conduct for public officers includes the following provision:

1. A public official shall not put himself in apposition where his personal interest conflicts with his duties and responsibilities.

2. Shall not ask for or accept any property or gifts on account of anything done or omitted to be done by him in the discharge of his duties.

Questionable integrity is therefore the root of industrialization inefficiencies and failures.

There is no other way of drawing out good industrialization behaviour in Enugu metropolis except good leadership. Nwosu 29 says that the difficulties and inefficiencies of most government owned companies are attributable among things to indiscipline in the leadership hierarchy.

Functionaries tends to be concerned with maintaining the prestige and stability of tenure of the position riding, in express corporation cars, cleaning this of that allowance getting fuel for their private purpose with a reasonable measure of austerity imposed from top to bottom.

How can the boss maintain employee commitment when in the last promotion exercise boss favourable were promoted even above their supervisors. So that collaboration to arrive out industrialization, finance becomes easier in the accounts department. Such a boss looks at every other fellow with suspect. He finds it difficult to delegate authority and such organization embedded bureaucratic, influence and plethora of controls. The manager becomes inaccessible. William Ikwazu is his “The second Person Nigerian managers harped resounding that the lack classical attitude towards affecting a date with Nigerian managers stem from not existing of such willingness to meet with but mobility to meet in a free atmosphere with somebody who surround himself the sine goods.

In the work done by Grapham develop in his book, “Managers and Magic” he borrowed a Shakespearian quotation “such divinity dota a king in order to make him sage from treasonable attack.”

The ills of cooperative societies in Enugu can be traced to lack of accountability of management to the taxpayers who are the owners of the company. There are quite a few of senior officers who are 2 to 3 years behind the auditing their annual account. Aarmed robbery has also contributed quite a problem in manufacturing industry in Enugu metropolis. The cash flow of this industries is adversely affected by compulsory extension of credit to government and individual services rendered by this company to the government are never paid for how can industries in Enugu metropolis perform if government functionaries, members of the board and other interest group refused to pay for product sold to them on credit.


Successful management in business co-operative societies depends on a few points the observance of which would eliminate many of the problems encountered in their company. The managerial techniques select must be relevant to the company proliferation of techniques, which leads to confusion, misunderstanding and eventually crisis, which will erode profitability in this industry. Executive must avoid wasting time and effort and so eliminate procedure, which are wasteful, and non-procedure. Their action and directions should be eliminated.

The job security enjoyed by those who manage this industry would be made dependant on their performance. The board of directors and the management of industry should strive to manage it as a business concern and not as a welfare organization.

The cooperative should ensure proper accountability by auditing accounts to the government yearly. They should hinge on proper delegation and responsibility assigned correctly to seek to establish industries by exception. Whereby the next senior executive deals only with problem assigned to him or those which are beyond the capability of the appropriate junior.

The success or failure of cooperative depends crucially on the type of direction and effectiveness of its leadership, should perform their function, they must command and retain the confidence of their subordinates at all times from it, it can serve the industrialization with high moral. The leader of cooperative society in Enugu metropolis should feed that the manager is someone they can talk to not a “secret personal” but obviously he must also guard those who try to exploit this by developing a special relationship, which cuts across lines of authority and discipline. The crucial point being the ability of senior to their junior is the establishment of good two way communication system.

Furthermore, cooperative problem in Enugu metropolis can be solved by the cooperative societies having up to date will. It must have the good will of the employees, customers and investors as regards capital. Finally, managers in cooperative societies should be advised to try out another generalized methods of motivating their workers. These includes feedback; goals selling conflicts resources, initiative, innovative pay reward system and break time facilities.

However, the company many try to encourage the workers to work harder or more difficulty by paying a bonus. This is where individual out puts cannot be measured, but the work of a group could be rewarded. A bonus could be given to a lorry driver for a period of accident force driving. A shop assistance may extra pay known as commission depending on the level of sales made. Researcher and welfare similarly they should provide welfare facilities for its staff. The company can set up pension funds, canteens and sport facilities will also attract more applicants for job and enable the firms chose high quality workers and hard working people.

However, management chief executive of cooperative societies in Enugu metropolis should also install better machines so that workers will fell that their rates are being reduced more than they should be. Workers should be encouraged to work by paying salary. They should also have a better chance of promotion and poor or lazy workers should be penalized by seizing their salary or paying them half payment so that others should learn from them and they should be careful in their works.

Moreover, co-operative societies should also introduce a system of profit sharing part of the organizational profit, will this be distributed among the workers as well as among the partners or shareholders. Some cooperative have even given share to workers so that they will reserve dividends depending on the cooperative profitability. Quite often this system is used to discourage trade union activities such as strike, which would harm the industry.

In Nigeria, private enterprises operate along side government owned enterprises. Government dissipates scare public funds and resources engaging in some ventures.

The reasons for doing this are quite obvious:-

1. To involve Nigerians in all levels of Nigerian economy that becoming a catalyst to the shares in the bank and the oil companies.

2. According to Okeke (1981) government are motivated to set up companies to serve as venue for employment. In periods of high employment labour intensive firms are expected to try and retain production at home to provide jobs even in the long run this is economically sub-optional.

3. Imitation of entrepreneurial spirit to the business sector of the population for example, Agricultural ventures.

4. To exploit our resources and provide an industrial base in area where individual Nigeria cannot afford to operate.

5. As a source of revenue or import substitution and to overcome the physical setback to individualization that whatever that is imported was better the locally made.

A few decades ago, it was thought that government should involve in business ventures, for the reasons advised above and also because of the need to avoid uneconomic duplication of certain services that could be rendered more difficulty by a public body. Unfortunately the performance of the existing government owned characteristically confounded in woeful takes.

In 1982, the former minister of communication Mr. Audu Ogbe, disclosed that 11.463 fraudulent cases were recorded in the post and telecommunication department. It was also reported that N.E.P.A has recovered 8.500 illegal metres in Oyo, Ondo and Kwara states sometime ago. This illegal connection of metres in effect denies N.E.PA of funds that would have accorded to it from electricity bill and couples with this the difficulty these state owned enterprises encounter in recovering debt room service already rendered. The public relations officer of the Nigerian Electric Power Authority revealed that public and private companies were owing N.E.PA about (63m) sixty three million naira.

In 1985, the government while papers of reports of commissions appointed in the former East – Central state to problem public sector, institutions made the following starting:-

1. The implementation committee was most effective, if anything, it was more interested and indeed appeared to be only interested and orders and paying for equipment and mould for the company.

2. A former director was found to have made a false claim of N600, are for company submitted a false bill of N760,000 for printing some documents actually” presented a false bill of N1,303,000 for supplies not made and recruited a copy typist Miss (x) who could not be traced.”

3. The inquiry into sports found that “the numerous purchases made by the council were irregular and smoked of fraud. It is necessary to establish the relationship between 9named top officers) and various suppliers to determine the reason for high cost of materials supplied.

The term felt that the scandal surrounding the purchase is worse than relating to the contract as investigated.

4. The board that inquired into Hotel presidential found that “save for beer and assorted minerals, whereby all purchases were made at excessive prices and in each case, the financial interest of the officer transacting the local purchase order.” It also found a (named) top official “Hatched the idea of constructing the Hotels second water tank by direct labour as a means of providing an avenue for defrauding the company of money and materials and to divert them to the constructing of his personal house.”

5. An inquiry into the board of internal revenue – East Central state revealed “tax manipulating assessment to enrich themselves from the expenses of revenue, some of the acquiring building and other properties the value of which for exceeding their normal legitimate salaries.”

6. The probe into the ministry of works showed that “control of staff has been hampered by a criteria personal linkage (and that) corruption does not necessarily consist of cash only. Favour also are currency of bureaucratic malpractice. We are equally living witness of the number of commission of inquiry and investigative panels set up to probe actors in the last civilian administration . it is either Mr. (x) has been sentenced to 147 years imprisonment on a seven court charges of corruption enriching himself to tune of 50 and 50 million naira or that ex – this and ex – that has been detained for his inability to repay the loan he took from government, or refund the money paid for contract not executed.

The Abubakar panel of inquiry on the activities of the federal Housing Authority the Alhaji Usman Dangote panel of inquiry on the activities of the federal ministry of commerce and industry and the Awole panel of inquiry into contract awarded by the past civilian administration in the former Anambra state, all have the same body story to tell; Despostism and bribery.

“Command appointed”, payment of salary/salaries to ghost workers, award of contract to shady contractors, or companies in which officials have interest, profit sharing or companies usurpation of the powers of subordinates, flouting of laid down regulations and procedures, in short doing all the don’t of good management. These are the result of poor management of government owned and their trapped in management problems that seem untraceable.



For capital intensive projects, requiring highly technical expertise, government enters into business venture in partnership with individuals; corporations (multinational corporations) with profit motives, primordial in the mind of the partners. Going into co-operative may stem from the desire to seek for the welfare of members. The achievement of such laudable objective of co-operative seems impracticable in Nigeria especially when it involves a company in which government had equity shares.

The problems arising from manufacturing industry in Enugu metropolis seems to have escaped the focusing lens of many writers. The problem ranges from the triangle of power struggle – who amongst the partners should produce the executive managers, the chief accountant, and the personnel manager, the other top management posts. The same is applicable to cooperatives. The same filling of the posts was based on quota system rather than by merit. Managerial effectiveness and efficiency was dwarfed and the company that was adjudged the best of the paints companies was watched going down the drains in manufacturing industries in Enugu metropolis.

There is an Ibo adage which says that “Ewu enwe n’ohia na- anwu na aguu.” It means that goat owned in common dies of hunger. It is disheartening to note that manufacturing industries in Enugu metropolis is jointly owned by the former Imo and Anambra state government and an individual but nobody cares about its management problems again and its solutions.

The significance and importance of good management in manufacturing industries in Enugu metropolis can no longer be over emphasized when the objectives of the company might have been achieved and the employee’s objectives guaranteeing employment for all.


It is very clear that failure decrease growth of a manufacturing industry. The problem is that when all these notations about failure are considered, one is uncertain on how to set out solution to this problem. For example, Climax (1980) have done something more on how to apply stoppage in our co-operative societies. This research summarized the causes and also makes some remedies through the overcoming industries problem. They summarized the assumption of each model that it can emerge in its application. Briefly presented, the assumption of individual definition – it can also show the bad attitude of workers of not being serious , they only show concern to what they will gain than to work thereby the industries falls.

On the other hand, the assumption of lack of interest of members in the co-operative also contributed to the failure of our today co-operative societies.

Furthermore, the situation of the industry, that is if not situated at a strategic area cause a hindrance thereby not achieving their goal. Co-operatives should therefore set a good location of their business.

Finally, it was concluded by climax (1980) some point that could cause failure in business manufacturing industries in Enugu metropolis.


In view of the above findings, the conclusions are hereby reached that those co-operative societies in Enugu metropolis could do better, if they are properly managed and also could play in the economy growth of the state. That these problems may be stopped if the industries are situated in a suitable environment in this regard, the organization was advised in her own interest to consider the following recommendations.