Management and Investment Challenges Faced By Cooperatives

Management and Investment Challenges Faced By Cooperatives

Introduction

Management is a crucial tool that fuels investment of a cooperative. Cooperatives face a different challenge in management and investment. Articulately, different case studies have been calumniating the reasons of failures of the cooperative, but the current literature exposes all the crucial parts that require simple improvement to ensure the work of management in cooperative maneuvers towards the goals. Cooperatives evaluate the actual challenges that cooperatives face in different scenarios and fail the investment as the most credit union cooperatives fail due to lack of good investment plan, centralized power, and undercapitalization of the equity as the main source of the investment.

Lack of Public Awareness and Corruption are the key factors that are facing the most investment and management failures in cooperatives. It has been found that if the investors in different cooperation increase in number, the firm becomes complex to manage and centralizations of the operations deems success (lliopoulos & Valentinov, 2018). Most of the cooperatives have exposed the embezzlement of funds by management hence indicating corruption as the major influence. On the other, hand most of the management and investor in the cooperatives increase the credit by borrowing as this case study expounds hence letting the investment in operating on credit for a long time. According to different evaluation, the corporates shows the poor management or operation fails due to complexity that occurs as the firm grows big (Henehen & Anderson, 2019). Existing literature has been showing reports of the different matters failing distinct business due to multiple investments hence growing big to control some essential matters such as credit and sources for different equity.

Poor management of cooperative Segments and department has also been leading aspect of the challenges facing the cooperatives. Additionally, reports have been exposing poor management as a result of co-operating corruption in different segments. Divisions and departmental have been showing the failures due to financial constraints and lack pure transparency of the funds’ allocation. Lack of cash flow due to fewer members affects the financial status. Cooperatives are showing less concern towards the societal awareness of involving the members to invest. As exposed, the cooperatives have reduced credit unions as reports compare with the banking facilities. Researches have been exposing cooperatives as institutions that lack careful awareness to alert the public about the benefits and promotion of the firm (lliopoulos & Valentinov, 2018). They don’t advertise, and that indicates how the management and marketing departments have been failing. Additionally, the application of poor management spirit and lack professional guidelines is the most current aspects that are making the corporations to have challenges in both management and investment.

Different studies have also shown that lack of compensation is another factor that has been letting the sinking of the financial management of the cooperatives. Basic tasks in these institutions have been rising cases of compensation failures hence leading to poor performance and affect the capital (Bretos & Errasti, 2018). Due to lack of enough capital, the cooperatives have been struggling in project handling, and this aspect shows how management faces the effect. They cannot enter into long term projects and contractions due to lack of enough tools of generating cash flow. Therefore, that means the management strain with time and credit control if they enter into a contract as to any other firm. Most of the cooperatives grow big and lack enough managerial skills to handle the constraints (Bretos & Errasti, 2018). Poor capital management of the cooperatives affects that causes of best ways of achieving financial means and sinks the firms in economic recessions as most of the reports expose the major causes of challenges in these trading institutions.

However, the members of society can develop a good cooperative if the interest of the credit unions can lower in terms of rate. This issue betters the provision of the services and lowers the cost of the interest. Lowering the interest rate of the credit for the public members will increase the investment from the public. As any other institutions, credit interest rate increases the investment plans and make the society pool the resources together to ensure enough capital and source of the equity resources. Moreover, to mitigate the matter in cooperative failures and the poor management problems society require loans with lower rates and credit union should set enough credit facility to ensure long term credits does not affect the needs of the institutional operations. The investment of the money in the corporative requires free corrupt management so to make sure the society builds a trustworthy investment (Bretos & Errasti, 2018). Depositing money in the credit union in a cooperative should be at a lower rate to provide the members with lower favourable services charge across the board.

Therefore, to determine the needs for the management of the cooperative at a lower price, the members should have the first best services and have long term plans. Through cooperative operations, should operate with little profit-making towards the society but with the ability to avoid bad debts of credit to lower the failures (Grashuis  & Cook, 2018). The board of directors should lower all the rates to ensure they are working towards helping the society but not the profit-making aim. Additionally, the cooperatives require the expertise of the management to avoid misuse of funds at all levels. Management, of the loans and interest rates on deposits, are made only successfully by the cooperatives if such conditions are set on the backgrounds of the management (Bretos & Errasti, 2018). Therefore, like any other firm, the management can lower rates to maneuver with society in its business.