THE ROLE OF

CO-OPERATIVE

SOCIETY IN

POVERTY

ALLIVIATION IN

NIGERIA
 CERTIFICATION

This is to certify that this project work was carried out by

…………………………………………………… in the Department of

Business Administration, School of Business Studies. Akwa Ibom State

Polytechnic. Ikot Asurua, Ikot Ekpene for the award of higher national

diploma in business administration.

………………………….. ………………………….

Project Supervisor Centre Coordinator

…………………………... ………………………….
Date Date
DEDICATION

This research work is dedicated to the Almighty God for seeing me

through the whole period of the program and granting me academic

excellence despite the difficulty encountered.

2
 ACKNOWLEDGEMENT

To God be the glory for its not by my power nor my might but by His

grace that is superfluous and more than sufficient. I thank Him for

making this programme a reality.

I am also grateful to my supervisor ………………………for his

painstaking and thoroughness in supervising this project.

I acknowledged the immense support I received from my family

especially my children, their encouragement during the period of the

programme.

The cooperation and the encouragement of my supporting staff who

always stand in for me anytime I am away.

This acknowledgement will be incomplete without noting the contribution

of the following people to the success of the programme, the school

registrar, the assistance registrar and other friends who had contributed

in one-way or the other to the successful completion of the programme.

A special word of thanks go to staff of C.A.C.T. Publishers in typing the

various draft of the manuscript..

3
I wish to conclude this acknowledgement by expressing my sincere

appreciation to all my colleagues for their friendly disposition towards me

during the period of the programme. MAY GOD BLESS YOU ALL.

4
 ABSTRACT

A cooperative is an enterprise in which individuals voluntarily organize to

provide themselves and others with goods and services via democratic

control and for mutually shared benefit. Members generally contribute to,

and control via a democratic process, the cooperative's capital.

Moreover, cooperatives often provide education and training to their

members. Over the years the cooperative form has extended to credit

unions, wholesale and/or retail consumer groups, residential

organizations, producer enterprises, and marketing associations

Certain broadly defined economic advantages accompany each specific

cooperative type. For example, members of a consumer cooperative are

entitled to receive a patronage dividend. Distributed from net earnings,

the amount of current dividends received per member is determined by

the amount members spent on the cooperative's products since the last

period's payout. Moreover, members working within the cooperative can

qualify for substantial in-store merchandize discounts. For members of a

residential cooperative, property-owning members function as

stockholders and receive benefits from the cooperative nature of

incurring maintenance and interest costs.

5
 CHAPTER ONE

INTRODUCTION

1.0 THE BACKGROUND OF THE STUDY

Much of the modern-day research and historical literature on cooperatives centers

on the category of producer cooperatives, even though consumer cooperatives have

been in existence since the 1840s. For the most part, this one-sided treatment is

historically related to the rise of the capitalist factory system. To many workers

experiencing the harsh routines of the factory systems' exacting discipline for the first

time, producer cooperatives held out the promise of a more humanistic alternative

form of economic organization.

The "modern cooperative era" began in 1844, when the Rochdale Equitable

Pioneers Society was established in Rochdale, England. Its members documented

the principles by which they would operate their food cooperative, implementing the

central tenets around which cooperatives are structured today. Throughout the late

19th and early 20th centuries, cooperatives sprung up sporadically in America,

particularly in times of economic hardship. In 1922, Congress passes the Capper-

Volstead Act, allowing farmers to collectively market products without being held in

violation of the nation's anti-trust laws. In the Depression years, Congress

established various agencies to provide loans and assistance to cooperatives,

including the Farm Credit Administration (1929), the National Credit Union

Administration (1934), and the Rural Electrification Administration (1936). The

National Cooperative Bank was established in 1978 under the National Consumer

Cooperative Bank Act.

6
From the report of the workshop held on 10th – 11th November 2008 during the 8

the ICA Africa regional assembly at the international conference centre, Abuja. Mr

Tom Tar - The Executive Secretary of Cooperative Federation of Nigeria, In his

introduction of the movement in Nigeria, said the Cooperative Federation of Nigeria

(CFN) was formed in 1945 and got registered in 1967.

He traced the background of cooperatives in Nigeria to the traditional savings and

loans system. He added that following agitation by the Agege Cocoa planters Union

in 1907, the study for establishment of formal cooperation was commissioned in

1934. This was followed by the enactment of cooperative legislation in 1935. The

early move was in agriculture and latter shifted to marketing following the shift in the

Nigerian economy from agriculture to crude oil. He gave the scope of cooperative

activities in Nigeria as covering: On population, he said there are about 5million

family members covering 20 million house holds. Total number of registered

cooperative societies is about 50,000.

He enumerated the following social and economic impacts of cooperatives in

Nigeria as:-

- Employment creation

- Credit to empower members to own their own business

- Contribution to GDP though statistics not available but impact is known

- Advocacy and lobbying for better legislation

He gave the future development of cooperatives as:

- Committed integration of women

- Strengthening cooperatives from within and reduced dependence on

government because “assistance seekers are always vulnerable”

7
- Better services to members to enable them increase their income

- Improved business entrepreneurial skills

- Stronger cooperative identity by members, committee and managers.

1.1 STATEMENT OF THE RESEARCH PROBLEM

In considering the statement of the research problem, these question

readily come to mind:……Why cooperative model:

- This involved insurance to the poor people who are neglected by

conventional insurance companies

- Cooperative model satisfies needs of the poor

- Product is developed with market needs in mind covers all needs of

members- lands, agric, commercial, cooperatives.

- Community minded

- Member involvement

- Cooperatives are trust worthy organizations in environment where

corruption is high

- Member education claims first promptly because the best customer is

educated customer.

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1.2 OBJECTIVES OF THE STUDY

The main objective of this research work is to determine the cons and

pros of cooperative movement in Nigeria, according to Mr. Oki of

Lagos State Cooperative Federation (LASCOFED).Cooperative

movement is developing a strong cooperatives for social and economic

progress the members.

He unveil that cooperatives has moved from more contribution and

lending of money to members to creating returns through engagement in

business activities.

He stated that since COOPERATIVES is seen AS a SOCIAL

ORGANIZATION, the primary objective is that :…

- Cooperatives put people at the centre of their business and not capital.

- in cooperative movement, the welfare of members is emphasized

- Cooperatives engage in business activities that touch members eg

schools building, credit.

- cooperative Create jobs and empowerment for members

1.3 SIGNIFICANCE OF THE STUDY

This study is significant because it will produce data on cooperative

movement in Nigeria that will be useful to:

1. federal ministry of labour and productivity

9
 2. national union of local government employees

3. state civil service commission

4. federal civil service commission .

5. managers and top executives in organized private sector

6. united nation commission on employment

7. federal ministry of finance

8. Central bank of Nigeria

9. students carrying out a research work in this same issue.

1.4 HYPOTHESES

It is a conjectural statement of the relationships between two or

more variables. It is testable, tentative problem explanation of the

relationship between two or more variables that create a state of

affairs or phenomenon.

E.C. Osuola (1986 page 48) said hypothesis should always be in

declarative sentence form, and they should relate to them

generally or specially variable to variables.

HYPOTHESIS THUS:

1. Explain observed events in a systematic manner

2. Predict the outcome of events and relationships

10
 3. Systematically summarized existing knowledge.

In essence, there exist NULL HYPOTHESIS set up only to nullify

the research hypothesis and the ALTERNATIVE HYPOTHESIS for

the purpose of the study. For the efficiency of the study, the

hypothesis is as follows:

Null Hypothesis (Ho)

1. Cooperative does not play leading role in poverty reduction

2.`Cooperative does not grant Credit to empower members to own

their own business

Alternative Hypothesis
1. Cooperative plays a leading role in poverty reduction
2. Cooperative do grant credit to empower members to own their

own business

1.5 LIMITATIONS OF THE STUDY

A research work of this nature cannot come to an end without

limitation. The researcher encountered numerous problems which

affected the smooth running of the work. These problems includes,

difficulty in procuring materials for the project, time factor and

financial constraints.

11
Material Procurement

There was a lot constraints as to getting information and materials

for the job. The researcher made series of consultations and visit

to most renowned institutions to acquire the needed information.

Most materials used were very difficult to come by, as there is no

library within the town.

Time Constraints

Combining academic work with job is no doubt a thought provoking

issue, as it has to do with time. Actually, a lot of time was wasted

as the researcher visited the organizations and individuals together

with government agencies to obtain valuable information for the

project.

Financial Constraints

The researcher would have obtained more information than what is

obtainable here but due to lack of money to visit some of the firms

and government agencies located a bit farther from the researcher

place of resident.

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1.6 THE STRUCTURE OF THE WORK
This research work is to be organized in five chapters as follows:
1 Introduction

2 Review of related literature

3 Research method

4 Data presentation and analysis

5 Summary, conclusion and recommendation

13
 CHAPTER TWO

LITERATURE REVIEW

1.0 THE NATURE OF COOPERATIVES

Cooperatives tend to attract a greater proportion of unskilled blue-collar

workers and fewer white-collar and managerial workers than business

enterprise. In large part, this may be attributable to the notion among many

cooperatives that, in order for a truly functioning democratic structure to

operate, traditional, specialized management positions should be de-

emphasized because they place non-managers at a disadvantage regarding

the development of skills and access to information necessary for decision-

making capabilities. Rather, cooperatives, by comparative standards,

emphasize the development of decision-making capacity for all its members.

Indeed, one of the primary causes of a cooperatives' failures is tendency of

workers to leave decisions to a small number of directors, which inevitable

results in a more authoritarian structure and generates internal animosity.

On a more basic level, this pattern of drawing lower-skilled workers may be

related to the common practice of distributing residual income (a rough

equivalent of profit sharing) to cooperative employees, a procedure that is

often formalized in the cooperative's bylaws. This amount might be a fixed

percentage or may vary, and is distributed to workers as a "bonus" payment.

Income distribution within producer cooperatives is structured along

egalitarian principles. Either peer pressure or cooperative bylaws see to it

that, depending on their skill-level, members receive equal pay for equal work

while differences in the number of hours worked are minimized. Most

14
 cooperatives institute income differential constraints. In terms of voting weight,

and unlike a business enterprise, the principle of one-person one-vote applies

independent of member's percentage share of ownership.

Most producer cooperatives face the thorny problem of hiring nonmember

workers. In most cases nonmember workers receive bonus payments, but

since they do not own shares in the firm they are excluded from its

participatory process, including distribution of profit shares. Unless accounted

for in the bylaws, there are built-in incentives for cooperatives to increase the

ratio of hired workers to share-owning members. Assuming that nonmember

labor of equivalent quality can be hired as either an additional worker or to

replace a departing member, then profit share paid out to all remaining

members increases even when the new worker receives a bonus payment.

2.1 ORIGIN OF COOPERATIVE MOVEMENT

The cooperative movement has since had considerable growth throughout

Great Britain and the Commonwealth, where local cooperatives have been

federated into national wholesale and retail distributive enterprises and where

a large proportion of the population has membership. Various examples of

cooperative organization are also found in the Scandinavian countries, Israel,

the People's Republic of China, Russia, and France. In the United States the

cooperative movement began in the 19th cent., first among workers and then

among farmers.

Although co-operation as a form of individual and societal behavior is intrinsic

to human organization, the history of modern co-operative forms of organizing

dates back to the Agricultural and Industrial Revolutions of the 18th and 19th

15
centuries. The status of which was the 'first co-operative' is under some

dispute, but various milestones in the history may be identified.

In 1761, the Fenwick Weavers' Society was formed in Fenwick, East Ayrshire,

Scotland to sell discounted oatmeal to local workers. Its services expanded to

include assistance with savings and loans, emigration and education. In 1810,

Welsh social reformer Robert Owen, from Newtown in mid Wales, and his

partners purchased New Lanark mill from Owen's father-in-law and proceeded

to introduce better labor standards including discounted retail shops where

profits were passed on to his employees. Owen left New Lanark to pursue

other forms of co-operative organization and develop co-op ideas through

writing and lecture. Co-operative communities were set up in Glasgow,

Indiana and Hampshire, although ultimately unsuccessful. In 1828, William

King set up a newspaper, The Cooperator, to promote Owen's thinking,

having already set up a co-operative store in Brighton.

In nutshell, cooperative movement began in Europe in the 19th century,

primarily in Britain and France, although The Shore Porters Society claims to

be one of the world's first cooperatives, being established in Aberdeen in

1498 (although it has since demutualized to become a private partnership).

The industrial revolution and the increasing mechanization of the economy

transformed society and threatened the livelihoods of many workers. The

concurrent labor and social movements and the issues they attempted to

address describe the climate at the time.

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2.2 DEFINING COOPERATIVE MOVEMENT

A cooperative (also co-operative or coöperative; often referred to as a co-

op or coop) is defined by the International Co-operative Alliance's Statement

on the Co-operative Identity as an autonomous association of persons united

voluntarily to meet their common economic, social, and cultural needs and

aspirations through a jointly-owned and democratically-controlled enterprise. It

is a business organization owned and operated by a group of individuals for

their mutual benefit. A cooperative may also be defined as a business owned

and controlled equally by the people who use its services or who work at it.

Cooperative enterprises are the focus of study in the field of cooperative

economics.

2.3 THE SPREAD OF COOPERATIVE IDEAS

The cooperative spirit has, indeed, caught on in various forms around the

world, and has even risen to relative prominence amidst some dramatic

historical moments. During the Spanish Civil War in the mid1930s, when

much of the business community took flight from Francisco Franco's fascist

forces, Spanish anarcho-syndicalists took control of the agricultural and

industrial organizations in many Spanish cities, declaring these activities

collectivized. While the movement was later crushed by force, it represents

perhaps the most widespread societal implementation of cooperative values

and principles.

Interestingly enough, by the late 20th century many, but not all, of the ideas

and workplace advantages inherent in cooperative firms began to take root in

traditional, non-cooperative workplaces. Indeed, these same ideas and

17
 organizational structures formed the substance guiding a majority consensus

emergent within the industrial relations field. Though referred to as "labor-

management cooperation," that term carried within it the essentials of

cooperative thought. Under this rubric an attempt was made at transplanting

the cooperatives' nonadversarial work environment into the CF workplace.

Management found the cooperatives' lack of "rigid" job assignments and pay

according to group or individual effort, rather than seniority, appealing.

General Motors Corp. and the United Auto Workers have been operating

under a form of labor-management cooperation since 1982.

At the close of the 20th century, the general insertion of labor-management

cooperation clauses into contractual agreements of organized labor appeared

imminent. According to the prevailing wisdom, the institutionalization of labor-

management cooperation schemes represented a central industrial strategy

by which the competitiveness and productivity of U.S. firms could be restored.

A potential legal roadblock existed, however, in Section 8(a)(2) of the National

Labor Relations Act, which prohibited "employer dominated" labor

organizations. A number of union activists have argued that labor-

management cooperation schemes were little more than a new form of old

business unionism.

2.4 CO-OPERATIVES TODAY

Co-operative communities are now widespread, with one of the largest and

most successful examples being the Mondragón Cooperative Corporation in

the Basque country of Spain. Co-operatives were also successful in

18
 Yugoslavia under Tito where Workers' Councils gained a significant role in

management.

In many European countries, cooperative institutions have a predominant

market share in the retail banking and insurance businesses.

In the UK, co-operatives formed the Co-operative Party in the early 20th

century to represent members of co-ops in Parliament. The Co-operative

Party now has a permanent electoral pact with the Labour Party, and some

Labour MPs are Co-operative Party members. UK co-operatives retain a

significant market share in food retail, insurance, banking, funeral services,

and the travel industry in many parts of the country.

In Nigeria today, cooperative movement can be traced to the traditional

savings and loans system. In 1907, the study for establishment of formal

cooperation was commissioned in 1934. This was followed by the enactment

of cooperative legislation in 1935. The association of people is called

cooperative federation of Nigeria.

2.4 TYPES OF COOPORATIVE SOCIETY

2.4.1 Retailers' cooperative:

A retailers' cooperative (known as a secondary or marketing co-operative in

some countries) is an organization which employs economies of scale on

behalf of its members to get discounts from manufacturers and to pool

marketing. It is common for locally-owned hardware stores and pharmacies.

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2.4.2 Worker cooperative

A worker cooperative or producer cooperative is a cooperative, that is owned

and democratically controlled by its "worker-owners". There are no outside

owners in a "pure" workers' cooperative, only the workers own shares of the

business, though hybrid forms in which consumers, community members or

capitalist investors also own some shares are not uncommon. In practice,

control by worker-owners may be exercised through individual, collective or

majority ownership by the workforce, or the retention of individual, collective

or majority voting rights (exercised on a one-member one-vote basis). A

worker cooperative, therefore, has the characteristic that the majority of its

workforce own shares, and the majority of shares are owned by the

workforce. Membership is not always compulsory for employees, but

generally only employees can become members either directly (as

shareholders) or indirectly through membership of a trust that owns the

company.

2.4.3 Social cooperative:

A particularly successful form of multi-stakeholder cooperative is the Italian

"social cooperative", of which some 7,000 exist. "Type A" social cooperatives

bring together providers and beneficiaries of a social service as members.

"Type B" social cooperatives bring together permanent workers and

previously unemployed people who wish to integrate into the labour market.

Social cooperatives are legally defined as follows:

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 • no more than 80% of profits may be distributed, interest is

limited to the bond rate and dissolution is altruistic (assets may not be

distributed)

• the cooperative has legal personality and limited liability

• the objective is the general benefit of the community and the

social integration of citizens

• those of type B integrate disadvantaged people into the labour

market. The categories of disadvantage they target may include

physical and mental disability, drug and alcohol addiction,

developmental disorders and problems with the law. They do not

include other factors of disadvantage such as race, sexual orientation

or abuse.

• type A cooperatives provide health, social or educational

services

• various categories of stakeholder may become members,

including paid employees, beneficiaries, volunteers (up to 50% of

members), financial investors and public institutions. In type B co-

operatives at least 30% of the members must be from the

disadvantaged target groups

• voting is one person one vote

2.4.4 Consumers' cooperative

A consumers' cooperative is a business owned by its customers. Employees

can also generally become members. Members vote on major decisions, and

elect the board of directors from amongst their own number. A well known

21
 example in the United States is the REI (Recreational Equipment

Incorporated) co-op, and in Canada: Mountain Equipment Co-op.

2.4.5 Business and employment co-operative

Business and employment co-operatives (BECs) are a subset of worker

co-operatives that represent a new approach to providing support to the

creation of new businesses. Like other business creation support schemes,

BECs enable budding entrepreneurs to experiment with their business idea

while benefiting from a secure income. The innovation BECs introduce is that

once the business is established the entrepreneur is not forced to leave and

set up independently, but can stay and become a full member of the co-

operative. The micro-enterprises then combine to form one multi-activity

enterprise whose members provide a mutually supportive environment for

each other.

2.4.6. Housing cooperative

A housing cooperative is a legal mechanism for ownership of housing where

residents either own shares (share capital co-op) reflecting their equity in the

cooperative's real estate, or have membership and occupancy rights in a not-

for-profit cooperative (non-share capital co-op), and they underwrite their

housing through paying subscriptions or rent.

Housing cooperatives come in two basic equity structures:

• In Market-rate housing cooperatives, members may sell their

shares in the cooperative whenever they like for whatever price the

22
 market will bear, much like any other residential property. Market-rate

co-ops are very common in New York City.

• Limited equity housing cooperatives, which are often used by

affordable housing developers, allow members to own some equity in

their home, but limit the sale price of their membership share to that

which they paid.

2.4.7 Building cooperative

Members of a building cooperative pool resources to build housing, normally

using a high proportion of their own labour. When the building is finished,

each member is the sole owner of a homestead, and the cooperative may be

dissolved. This collective effort was at the origin of many of Britain's building

societies, which however developed into "permanent" mutual savings and

loan organisations.

2.4.8 Agricultural cooperative

Agricultural cooperatives are widespread in rural areas. In the Nigeria, there

are both marketing and supply cooperatives which promote and may actually

distribute specific commodities. There are also agricultural supply

cooperatives, which provide inputs into the agricultural process.

2.5 THE PROS AND CONS OF COOPERATIVE MOVEMENT

THE PROS: Advocates of producer cooperatives claim numerous

comparative advantages over what is generally referred to as a classical firm

(CF). The proposed advantages extend to a host of theoretical issues. Many

overlap the separate disciplines of labor economics, industrial management

23
and organization theory, investment and finance, and property rights theory.

Academicians have devoted significant amounts of research and analysis to

such issues as (1) the absence of "shirking" by workers in producer

cooperatives; (2) superior productivity rates that result from the extension of

democratic principles into the cooperative workplace; (3) the lack of

unnecessary supervision due to the "horizontal monitoring" performed by

cooperative members; and (4) the pursuit of cooperative employment and

output strategies that are less sensitive to business cycle fluctuations.

THE CONS:

Compared to CFs, producer cooperatives suffer from two interrelated

investment disadvantages. Both are readily acknowledged by most

cooperative proponents. The first concerns the problem of intra-firm finance or

underinvestment. This tendency arises when the disparity between a worker

member's expected profit share of income and what they could earn by

investing outside the firm (say, at a bank rate of interest) becomes

problematic. A second, and related, underinvestment point concerns the

apprehension of nonmember financiers to lend to cooperatives. Since they

must risk their funds within an organizational form where they have little

control, outside financiers are reluctant to lend except on terms unfavorable to

cooperatives. At the same time cooperative members are reluctant to borrow

on terms exceeding the going interest rate and wary of relinquishing

management control to outside parties who might not share a similar

commitment to cooperative forms of organization.

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2.6 COOPERATIVES AS SOCIAL ORGANIZATION:

- Cooperatives put people at the centre of their business and not capital.

- Welfare of members is emphasized

- Cooperatives should engage in business activities that touch members

eg schools building, credit.

- Creation of jobs and empowerment of members

2.7 THE UPC COOP. SOCIETY (ASABA) PROFILE

- Registered 1967

- 4000 viable cooperatives as members

- 15 multipurpose unions and 7 associations

Business: Pure water, yam flour, car was Ice block making, cooperative

stationery.

2.7 CHALLENGES:

- Existing By-law needs to be reward because it does not give room for

the Cooperative to operate freely. It gives more power to state.

- Members apathy needs to change

- Information and communication gap to be reduced

- Leadership and managerial improvement

- Lows and statutes to be changed

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3.8 STRATEGIES

- Reorientation of members

- Awareness campaign carried out

- Members involvement

- ICT website launched

- Sensitization for more cooperator among cooperatives

- Lobby for favorable cooperative Law

- Encouraging transparency and accountability

- Education and training on continuous basis eg. End of year training for

all leaders

2.9 FUTURE PLANS

- Greater autonomy and independence coops

- Cooperative clubs for children in schools

- Introducing cooperatives in secondary school curriculum

- Introducing cooperatives in curriculum of Lagos state university.

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 CHAPTER THREE

RESEARCH METHODS AND PROCEDURES

3.1 RESEARCH DESIGN

The research method selected for the study is a combination of a survey and

an industrial study. The survey research method is described hereunder that:

(i) It is a design in which primary data is gathered from members of the

sample that represents a specific population;

(ii) It is a design in which a structure and systematic research instrument

like a questionnaire or an interview schedule is utilized together with the

primary data;

(iii) It is a method in which the researcher manipulates no explanatory

variables because they have already occurred and so they cannot be

manipulated;

(iv) Data are got directly from the subjects;

(v) The subjects give the data the natural settings of their workplaces;

(vi) The answers of the respondents are assumed to be largely unaffected

of the Context in which they are brought;

(vii) The impacts of the confounding factors are “controlled” statistically; and

27
(viii) The aim of the research may span from the exploration phenomena to

hypotheses testing (stone 1995).

The survey research method has some merit, which are to be articulated

hereunder: In the survey research method, the sample of the respondents is

selected in such a way as to make for the generally low due to the utilization

of big sample sizes, which results in generally low sample errors. Also the

probability sampling techniques utilized in selecting the samples of the

respondents in a survey especially, the selecting the samples of the

respondents in a survey especially, the random sampling techniques makes it

possible to give every element in the population a known and chance of

belonging to the sample and by so doing, sample bias is either minimised or

completely eliminated (Stone 1995). Sampling even as a compromise has a

lot of strength. The survey research method also has the merit that data

collection takes place in the “natural” settings of the workplace rather than an

activated laboratory. Data is collected directly from the respondents. The

advantage that the survey yields data that suggests new hypothesis is very

illuminating. There is also the merit that a set of systematic data collection

instruments such as questionnaire interview schedules and observation

gadgets can either be used alone or in conjunction with other instruments

(Stone, 1995).

The survey research method also has some demerits. There is the demerit

that there is a decreased willingness of the subjects to give responses to

survey probes. There is the demerit that most surveys are “one shot” or at

most “two short” as opposed to the panel type of research design, in which

repeated measures are taken on the same sample using questionnaires. The

28
 result of this shortcoming is that the ability of the survey research method to

yield data with which to test the causal relationships of variables is minimized

(stone, 1995).

There is also the demerit of the survey that in terms of total expenditure, the

survey research methods is a highly costly research method due to a large

administrative, and/or personnel and travel expenses especially when the

research and the field data collectors have to do several trips to get at some

subjects that were not originally available. There is also the demerit that the

structured and pre-arranged response formats of many survey measures e.g.

questionnaires and structure interview schedules many compel the subjects to

give response which they do not really accept (stone, 1995 ).

Apart from the choice of the survey research design, the industry is also

chosen for the study. The study on the internal control in the aviation industry

is for only industry and there was the need to deliver questionnaires to the

managers in at least two firing investigation in some depth.

3.2 SAMPLING

Spiegel (1992) observes that sampling theory is a study of the relationship

existing between a population or universe and the samples drawn from it. The

population in this study is the entire staff of the firm.

In order to make conclusions of sample theory and statistical references to be

valid, a sample must be selected as to be representative of the population

(Spiegel, 1992 ). One way in which a representative sample may be got, is by

the process of stratified random sampling. In this research work, the

29
 technique of simple random sampling is used to select the sample of 100

respondents from a total sample size of 200.

The list of all the senior staff in the UPC cooperative society is got from the

personnel department of the organisation. The numbers are written on a piece

of paper, put in a basket and the papers are folded to cover the numbers and

one of the pieces of paper is selected at a time without replacing it and any

name corresponding to the number becomes a number of the sample. This

method of sampling without replacement is done until the sample of 100

respondents per firm is got.

3.3 DATA COLLECTION

As earlier stated, the primary data collection instrument in this study was the

questionnaire. In the questionnaire method of primary data collection, a heavy

dependence was placed on verbal reports from the subjects to get information

on the role of packaging as a management strategy.

The questionnaire had a lot of merits. It needed less skill to administer.

Further, Questionnaire can be administered to a big number of individuals at

the same time. Also with a specific research budget, it was usually possible to

cover a brooder area and to get information from more subjects by a

questionnaire. The impersonal nature of a questionnaire, its structure and

standardized wording, its order of question, its standardized instructions for

recording answers might make one to conclude that if offers some uniformity

from one measurement occasion to another (Selltiz et al, 1976).

30
Another merit of questionnaire was that subjects may have a bigger

confidence in their anonymity, and thus feel freer to express views they feel

might be disapproved-Another attribute of the questionnaire that is

sometimes, through not always desirable is that it might place less pressure

on the subjects for immediate response (Selltiz et al, 1976).The questionnaire

also has some demerits. It has been estimated that for purpose of giving

dependable responses to a questionnaire, one respondents must be

considerable educated, Thus one of the demerits of the usual questionnaire is

that it is appropriate only for with a considerable amount of education. There

is also the demerit that subject may be reluctant and unable to report on the

particular subject matter. Also, if a subject misinterprets a question or give his

or her answer in a batting manner, there is often a little that can be done to

ameliorate the situation. In a questionnaire, the information the researcher

gets is limited to the fixed alternative answer format, when a specific answer

is not available, it can lead to errors (Selltiz, 1976).

There is also limitation of memory in reporting on past facts. There is also a

problem beyond memory. Usually, the cause of a failure to report past facts is

not forgetting in the usual sense of the word but rather, it may be motivational.

Also the researcher is not a policeman that can compel answers. That is, the

information may not be readily accessible to the subject and thus the subject

may be reluctant to put forth enough alternative information that he or she is

only barely conscious of (Selltiz et al, 1996).

In this research project a structured and undisguised questionnaire is utilised

which is made up of two parts namely, the personal data section and the

section on the data on the actual subject matter of the work. The

31
questionnaire is undisguised in the sense that the purpose of the data

collection which is to collect primary data for writing up the researcher’s HND

project is made known to the 200 respondents. The questionnaire is

structured in the sense that the questions are logically sequenced and are to

be asked to the respondents in the same manner and no follow up questions

are to be allow. Some of the questions are of the fixed alternative answer

format type. Ten (10) of the questions have yes or no answers, Ten (10) of

the questions have alternative answers for the respondents to tick.

The structured questionnaire has the merit that it yields data that is easier to

analyse than data produced by an unstructured questionnaire. Also the

structured nature diminishes both researchers and research instrument

biases. It however has the demerit that the rigidity of the research instrument

diminishes the amount of information that could be got.

The method of communication of the research instrument is by means of the

personal interview. The method has the merit that it produces a better sample

of the population than either mail or the telephone methods. It also has the

merit that it gives a very high completion and response rates. It has the merit

that the interview has a bigger sensitivity misunderstandings by the

respondents and gives a chance for clarification of misunderstood questions.

It has the merit that it is a very feasible method (Selltiz et al, 1976). The

personal interview method has the demerit that it is more costly than the mail

or the telephone methods of communication of a questionnaire.

32
3.4 FIELD WORK

The researcher and three other field data collectors did the fieldwork.

The field data collectors were other classmates also offering the part-time ND

program, who have also offered Research Methodology and are members of

the organisation so they had no problem getting data from the organisation .

They were to be trained by the researchers on how to gain entry , greet the

respondents and , how to tick the questionnaire correctly, and honestly.

3.5 DESCRIPTION OF DATA PRESENTATION AND ANALYSIS TOOLS

The data presentation tools were simple bar charts, histograms, and pictorial

tables. The most important parts of a table include;

(a) Table numbers

(b) Title of the table

(c) Caption

Stub or the designation of the rows and columns

The body of the table.

The head note or prefatory note or explanatory just before the title;

Foot note, which is an explanation not at the end of the page

(h) source note, which refers to the literally or scientific source of

the table(Mills and Walter 1995)

Anyiwe (1994) has observed that a table has the following merits over a

prose information that;

A table ensure an easy location of the required figures;

33
Comparisons are easily made utilizing a table than a prose information;

(k) Patterns or trends within the figures which cannot be visualised

in the prose information can be revealed and better depicted by

a table; and

A table is more concise and takes up a less space than a prose

formation:

The data is to be analysed by means of percentage, cross tabulation

and the z test of population proportions for testing the two hypotheses.

Percentages express the ration of two sets of data to a common base

of 100. Percentages facilitate comparison and address the problem of

the misleading tendency of absolute in which 8 over 10 is greater than

12 over 15 as the first ratio gives a percentages of 80 while the later

gives a percentages of 75 . Cross tabulation involves utilising a table

to display two or more variables. The z test of population of the

respondents who said yes to a particular yes or no question is given at

5% level of significance to a particular (Spiegel, 1992)

CHAPTER FOUR

34
 DATA PRESENTATION AND ANALYSIS

4.1 INTRODUCTION

In the previous chapter, the research methods and procedures

have been handled. In this chapter the data presentation and

analysis are to be done. The data is to be presented by means of

tables, two simple bar charts, one histogram and one pie chart to

make it amenable for further analysis. By analysis, it meant the act

of noting relationship and aggregating the set of variables with

similar attributes and also breaking the unit of their components

(Mills and Walters 1995).

In this research work, the researcher accepts the contention of

Podsakoff and Dalton (1995) that the factual information from the

data can be used as a basis for reasoning, calculation and

discussion.

Apart from the heading above, the other headings in this chapter

includes:

1. Data presentation,

2. Percentage analysis

35
 3. Cross- tabulated analysis

4. Hypothesis testing

4.2 DATA PRESENTATION

TABLE 1

THE SUMMARY OF THE PERSONAL DATA OF THE RESPONDENTS

1 SEX FREQUENCY
Male 150
Female 50
Total 200
2 Marital status Angles
suspended
Married 130
in degree
Single 70
Total 200
3 AGE
21-30 years 90
31-40 years 90
41-50 years 10
51-60 years 10
Total 200
4 HIGHER
EDUCATIONAL
QUAIFICATION
10
DIPLOMA
30
OND 18
80
HND 54
20
FIRST DEGREE 144
40
SECOND DEGREE 36
20
ACA 32
200
TOTAL 36
360

36
In the marital statuses of the 200 respondents above, it is found that 130

of them are married while 70 of them are single. For the ages of the 200

respondents they are 21-30 years, 31-40 years, 15-60 years with

frequencies of 90 and 10 respectively. For the highest educational

qualification of the 200 respondents they are diploma, OND, HND, First

Degree, Second Degree, A.C.A. and they have frequencies of 10, 30,

80, 20, 40 and 20 respectively.

Figure 4.1 below shows the simple bar chart of the data on the sex of
the respondents

FIGURE 4.1: THE SIMPLE BAR CHART OF THE DATA ON THE SEX OF THE
RESPONDENTS

MALE
160
150
150
FEMALE
140
130
120
110 50

100

90
80

70

M F Sex of the respondents

Source: from data in table 1

37
From figure 4.1 above, it is shown that male respondents have the

modal frequency of 150 of the 200 respondents while the female

respondents have the frequency of 50 only.

Figure 4.2 below shows the simple bar chart of the data on the

marital statuses of the respondents.

FIGURE 4.2: THE SIMPLE BAR CHART OF THE DATA ON THE MARITAL
STATUSES OF THE RESPONDENTS

MARITAL STATUS OF THE RESPONDENTS

140

120

100

80

60

40
Frequency

20

0
MARRIED SINGLE

MARITAL STATUS OF THE RESPONDENTS

MARITAL STATUS OF THE RESPONDENTS

Frequency Percent Valid Percent Cumulative
Percent

MARRIED 130 65.0 65.0 65.0

SINGLE 70 35.0 35.0 100.0

Total 200 100.0 100.0

38
From figure 4.2 above, it is shown that the married respondents

have the modal frequency of 130 out of the 200 respondents while

the single respondents have the frequency of 70 of them.

FIGURE 4.3: THE HISTOGRAM OF THE DATA ON THE AGES

OF THE RESPONDENTS.

AGE OF THE RESPONDENTS

100

80

60

40
Frequency

20
Std. Dev = .78
Mean = 1.7

0 N = 200.00
1.0 2.0 3.0 4.0

AGE OF T HE RESPONDENT S

AGE OF THE RESPONDENTS

Frequency Percent Valid Percent Cumulative
Percent
21 - 30 YEARS 90 45.0 45.0 45.0

31 -40 YEARS 90 45.0 45.0 90.0

41 - 50 YEARS 10 5.0 5.0 95.0

51 - 60 YEARS 10 5.0 5.0 100.0

Total 200 100.0 100.0

39
 SOURCE: From the data in Table 1.

From figure 4.3 above, it is shown that the age classes are 20.5-30.5

years, 30.5-40.5 years, 40.5-50.5 years and 50.5-60.5 years with

frequencies of 90, 10, and 10 out of 200 respectively. This shows that

this is a bi-modal distribution as the age classes of 20.5-30.5 years and

30.5-40.5 years have a frequency of 10.

Figure 4.4 below shows the pie chart of the data on the highest

educational qualifications of the 200 respondents.

FIG.4.4 THE PIE CHART OF THE DATA ON THE HIGHEST

EDUCATION QUALIFICATIONS OF THE 200 RESPONDENTS

EDUCATIONAL QUALIFICATION OF THE RESPONDENTS

Frequency Percent Valid Percent Cumulative
Percent
Valid DIPLOMA 10 4.8 5.0 5.0
OND 30 14.3 15.1 20.1
HND 80 38.1 40.2 60.3
FIRST DEGREE 19 9.0 9.5 69.8

SECOND DEGREE 40 19.0 20.1 89.9

ACA 20 9.5 10.1 100.0

Total 199 94.8 100.0
Missing System 11 5.2
Total 210 100.0

EDUCATIONAL QUALIFICATION OF THE RESPONDENTS

5.0%
Missing 5.2 % DIPLOMA
ACA 9.5 % OND
15.1%

SECOND DEGREE 19.0 %

38.1%
9.0%
FIRST DEGREE HND
40
 SOURCE: From the data in table 1.

From figure 4.4 above, the Highest Educational Qualifications are

Diploma, O.N.D, First Degree, Second Degree and A.C.A and the

subtend angles equal to 180, 540, 1440, 360, 720 and 360 and

respectively at the center of the circle.

`4.5 CROSS – TABULATED ANALYSIS

Table: 3 below shows the analysis of the statuses of the 200

respondents

TABLE: 3 THE ANALYSIS OF THE STATUSES OF THE 200

RESPONDENTS

CROSS-TABULATION 1

Cooperative plays a leading role in poverty

reduction

YES NO NO DON'T Total

ANSWER KNOW
DIPLOMA 10 10
OND 30 30
HND 70 10 80
FIRST 20 20
DEGREE
SECOND 40 40
DEGREE
ACA 9 11 20
Total 110 70 9 11 200

41
 The above table shows that the total of 100 respondents
(out of 200 said YES. This proved that Cooperative plays a
leading role in poverty reduction

CROSS-TABULATION 2

Cooperative do grant credit to empower members to own

RESPONDENTS’ their own business
EDUCATIONAL
QUALIFICATION NO DON'T
YES NO ANSWER KNOW Total
DIPLOMA 10 10
OND 30 30
HND 75 5 80
FIRST DEGREE 20 20
SECOND DEGREE 40 40
ACA 9 11 20
Total 115 65 9 11 200

The above table indicates that Cooperative do grant credit to empower

members to own their own business . 104 respondents out of 200 said

yes. While 40 did not agree with the fact.

PERCENTAGE ANALYSIS
Table below shows the percentage analysis of the responses to the yes
or no Questions.

42
S/N QUESTIONS YES % NO % TOTAL TOTAL
IN NUM. IN %

1 DOES COOPERATIVE SOCIETY 110 55 90 45 200 100

CREATE MPLOYMENT TO
MEMBERS?

2 DO COOPERATIVE SOCIETY 115 57.5 85 42.5 200 100

GRANT CREDIT TO EMPOWER
MEMBERS TO OWN THEIR OWN
BUSINESS?

3 DOES COOPERATIVE SOCIETY 109 54.5 91 45.5 200 100

CONTRIBUTION TO GDP ?

4 DOES ADVOCACY AND 123 61.5 77 38.5 200 100

LOBBYING FOR BETTER
LEGISLATION ONE OF THE
ROLES OF THE COOPERATIVE
SOCIETY?
5 Do cooperative society offers Better 155 77.5 45 22.5 200 100
services to members to enable them
increase their income?

6 Cooperative society helps to 111 55.5 89 44.5 200 100

Improve business entrepreneurial
skills

7 Cooperative society plays a leading 130 65 70 35 200 100

role in poverty reduction

8 Cooperation is unique because it 122 61 78 59 200 100

promotes.
* Reliance &
* Empowerment

9 Is Cooperative society organization 111 55.5 89 44.5 200 100

owned by the people and for the
people

10 Do Cooperative society put people 128 64 72 36 200 100

at the centre of their business and
not capital.

11 In cooperative society, is Welfare of 111 55.5 89 44.5 200 100

members is emphasized?

12 Do cooperatives engage in business 150 75 50 25 200 100

activities that touch members eg
schools building, credit?

13 Is Creation of jobs and 100 50 100 50 200 200

empowerment of members one of
the functions of the firm?
43
4.3 HYPOTHESIS TESTING

In attempting to arrive at decisions about the population, on the

basis of sample information, it is necessary to make assumptions or

guesses about the population parameter involved. Such an

assumption is called statistical hypothesis, which may or may not be

true. The procedure, which enables the researcher to design on the

basis, is sample regards whether a hypothesis is true or not is called

test of hypothesis or test of significance.

The null hypothesis asserts that there is no significant difference

between the statistics and the population parameters and what ever

is observed difference is there, is merely due to fluctuations in

sampling from the same population. Null hypothesis is thereby

denoted by the symbol H0. Any hypothesis, which contradicts the

H0, is called an alternate hypothesis and is denoted by the symbol

H1. The researcher used chi-square analysis.

4.4 CHI-SQUARE TEST

The c is one of the simplest and most widely used non-parametric

test in statistical work. It makes no assumptions about the

population being sampled. The quantity c describes the magnitude

of discrepancy between theory and observation i.e. with the help of

c test we can know whether a given discrepancy between theory

44
 and observation can be attributed to chance or whether it results

from the inadequacy of the theory to fit the observed facts. If c is

zero, it means that the observed and expected frequencies

completely coincide. The greater the value of c the greater will be

the discrepancy between observed and expected frequencies.

The formula for computing chi-square is –

c =∑ (O-E)2/E

Where,O=Observed frequency

E=Expected or theoretical frequency

4.5 SOFTWARE USED FOR DATA ANALYSIS:

For the data analysis and the interpretation, the researcher has

adopted advanced version of SPSS (statistical package for social

science). This application software has facilitated the researcher to

construct the frequency table, various types of charts and to find

out the valid percentage responses from the sample. By this

automated data analysis it has minimized the researcher’s time

constraints and reduced human error and give also accurate outlay

of information.

Chi-Square Test (1)

The liability of the members is unlimited

Observed Expected Residual Decision

F F

45
 YES 100 50.0 50.0 Accept
NO 43 50.0 -7.0 Reject
DON’T
KNOW 39 50.0 -11.0 Reject
NO 50.0
ANSWER 18 -32.0 Reject
Total 200

Chi-Square Test (2)

Cooperative do grant credit to empower members to own their
own business
Observed Expected Residual Decision
F F
YES 104 50.0 54.0 Accepted
NO 40 50.0 -10.0 Rejected
DON’T
KNOW 47 50.0 -3.0 Rejected
NO
ANSWER 9 50.0 -41.0 Rejected
Total 200

Residuals

The observed value of the dependent variable minus the value

predicated by the regression equation, for each case. Large

46
absolute values for the residuals indicate that the observed values

are very different from the predicted values.

SOURCE: From the questionnaires administered.

The formulated hypothesis that is subject to statistical test is at 5%

level of significance in testing hypothesis, the calculated value of

the test statistics is usually compared with tables of value. The

critical values of the test statistics serve as criterion value. It

afforded the basis for rejecting the null hypothesis is a function of

the value of the tested statistic.

Reject the null hypothesis if the calculated value of the test statistic

is greater than the critical value.

Accept the null hypothesis if the calculated value of the test statistic

is less than the critical value.

TEST STATISTICS

The liability of the The society is

members is
unlimited. managed by

one person

only.
Chi-Square 73.880 94.120
df 3 3

note: df = degree of freedom

47
4.6 SUMMARY OF RESULT

Level of significance……….0.05

Critical value………………………43.0

Calculated value……………………73.880

From the above analysis, it could be seen that in the first test, The

liability of the members is unlimited, the calculated value is greater

than the critical value so we reject the hypothesis.

In the second test which state that The society is managed by one

person only, the level of significance is 0.05, the critical value is 44

while the calculated value from the test statistics table is 94.120.

Looking the data above, it shows very clear that the calculated

value is greater than the critical value so we reject the hypothesis.

48
 CHAPTER FIVE

FINDINGS, SUMMARY AND RECOMMENDATION

5.1 FINDINGS

-A co-operative society is a voluntary association of individuals

having common needs who join hands for the achievement of

common economic interest. Its aim is to serve the interest of the

poorer sections of society through mutual help.

 -Membership of co-operative societies is voluntary and open to all.

It is democratically managed and it has a separate legal

existence . The main motive is to provide service to the members.

49
 It works on the principle of self help through mutual cooperation of

members.

 A co-operative society can be formed under the Co-operative Act,

with a minimum of ten members. For registration, an application

along with bye-laws of the society has to be submitted to the

Registrar of Co-operative Societies.

 -Co-operative societies may be classified as follows:

1) Consumers’ co-operative society - formed to eliminate the role

of middlemen and supply high quality goods and services at

reasonable price to consumers.

2) Producers’ co-operative society - formed to help producers to

procure raw material, tools, equipment etc.

3) Co-operative marketing society - formed to ensure a favourable

market for small producers to sell the output and get a good return

on sale.

4) Co-operative credit society - formed to provide financial help to

members through loans at low interest rates. They encourage

saving habit among members.

5) Co-operative farming society - formed to achieve economies of

large scale farming and maximization of agricultural output.

50
 6) Housing co-operative society- formed to provide residential

houses to members by constructing them or providing loans to

members to construct their own houses.

 Co-operative societies are easy to form and have a stable life.

Membership is open to all and members have limited liability.

There is democratic management based on ‘one-man, one vote’.

The societies have stable life and they enjoy government

patronage.

 They suffer from insufficient capital, problems in management and

conflict among members. There is lack of motivation in members

due to absence of direct reward for individual effort. Excessive

government regulation and control may also pose problems for

them.

 Co-operative societies are suitable in protecting exploitation of

weaker sections of society and promoting their economic interest.

It is ideal where service motive, and not profit, is the priority.

5.2 SUMMARY

51
 Cooperative method remains the vibrant economic technique of

poverty eradication, wealth creation, job creation and rural

development and SMEs financing. There are various problems

militating against the performance of cooperative societies in

Nigeria. Also the changing world of technology poses great

challenges to the efficiency of cooperative societies in Nigeria

most cooperative societies are operating with inadequate capital to

cope with the need of SMEs.

5.3 RECOMMENDATION

- Immediate review of the cooperative law in line with the

cooperative Development Policy that would re-position the Director

of cooperative, service was suggested.

- a base line study; to allow data base and statistics on registered

societies, to allow data base and statistics on registered societies,

members savings mobilized, total reserves, loans disbursement,

percentage recovered, nature and types of cooperative societies

existing in the country, that are required for effective planning.

- Research suitable for planning more effective cooperative

education and training programmes for committees, members and

52
employees of cooperative is highly essential to fit with the

changing environment.

- Government should liberalize cooperatives by loosening its grip

on cooperatives to allow for self-help and self-responsibility

principles of cooperativeness.

- Investment in Information and Communication Technology (ICT)

has become imperative for a success-drive cooperatives. On-line

update of members' passbooks, loan application, etc should be

incorporated into the business of cooperatives. Otherwise, such a

cooperative will be living in the past.

- A guided recapitalization of the cooperative sub-sector

- Fund channelization through the cooperative societies by the

Government, NGOs and commercial banks for sustainable SMEs.

53
 REFERENCES

Abrahamsen, M.A (1976) Cooperative Business Enterprises MC Craw Hill

books company New York

Akinwumi, J. (2006): Road Map to re-engineering Cooperatives in Nigeria; A

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by cooperative federation of Nigeria South west zone at Obisesan Hall,

Ibadan, September 7th.2006.

Asaolu, T. O.(2004): Evaluation of the performance of the Cooperative

Investment and Credit Societies (CICS) in financing Small-Scale Enterprises

(SSEs) in Osun State, Nigeria.

54
Ayoola (2006): Nigerian cooperative movement: "Yesterday, Today and

tomorrow" A paper presented at conference for cooperative leaders and

members organize by cooperative federation of Nigeria South west Zone.

Epetimehin, F. M. (2006): Understanding the Dynamics of Cooperatives,

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Frank, R.H Gilorich T & Regan, D.T (1999): "Does studying Economics Inhibit

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U.S.A.

International cooperative Alliance congress (ICA) (1995), Centennial

Congress and General Assembly, Manchester.

International Labour Office, 1960, cooperative management and

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Lawal, T.O 2006: Introduction to modern cooperative management, Akure,

alibi-Eyo&co Ltd.

Olesin, Ayo (2007) "making Cooperative societies work for you", Sunday

business in Sunday Punch Newspaper 18th, February, 2007 pg7.

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Onuoha, Enyeribe 1986: Principles of cooperative enterprise, Enugu Nigeria,

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Rana, J.M 1970: AO,s and principles of cooperatives and Applications in

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Roy, I. (1964). Cooperatives Today and Tomorrow, Genera.

Reeves, M (2003): A wealth of opportunities in a World of Limits: Free

Enterprises. Economics of Cooperation, Federal Reserve Bank of Dallas;

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The Nation, Newspaper, "President Obasanjo Lunches National Policing on

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Wikipaedia (2006). Economic Development, www.wikipaedia.com

56