MEKELLE UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

Department of Co-Operative Studies (Accounting and Auditing

stream)

ASSESSMENT OF PROBLEMS FACING IN CONSUMER COOPERATIVE (a case

study of Abyssinia consumer cooperative society)

A senior research project submitted to the department of cooperative studies for the partial
fulfillment of B.A degree.

ADVISOR: Aregawi Tesfay (M.A)

BY: Bazezew Ejigu

ID NO: CBE/UR/ 0012/04

Mekelle, Ethiopia

June, 2014 G.C

 ACKNOWLEDGMENT

First of all I would like to thanks the almighty GOD, he made as to work this research project
without any health problem and he is only GOD that reliefs my longer dream.

Next to this I would like to express special thanks to my Advisor Ato Aregawi Tesfay(M.A) for
his constructive comments, corrections and suggestion because without him my senior research
paper were not successful.

Lastly but not least greatest thanks to all of my family members to support me financially,
morally and all the necessary requirements when I was conducted this research paper and in my
learning occupation from the beginning still now without the commitment of my family my
learning occupation may not be reach at this level.

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 ABSTRACT

The study of the senior research was conducted in Tigray region, Mekelle city in Abyssinia
consumer cooperatives society. The main objectives of the study were to assess problem of
consumer cooperative societies and analyzing to recommend possible solution in order to
improve the standard this consumer cooperative society.

The study was conducted by using primary data collection by distribution of questionnaire to
the respondents from the selected sample representatives. In selecting the required respondents,
simple random sampling was used. The data was analyzed by using qualitative and quantitative
methods. Quantitative methods are using table, percentage and qualitative data was analyzed by
using explanation and personal judgment, felling, emotion etc.

The finding of the study noted that in assessment of problem facing in Abyssinia consumer
cooperative. Those problems are lack of awareness of the member, transportation problem,
supply problem and other problems. Generally problems of in this consumer cooperative can be
improved by using the following strategies: Those are by giving training to the member,
motivation of the member, by governmental assistance, by gaining incentives and other methods
improve this consumer cooperative society.

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 Table of content

Page
Content
Acknowledgment……………………………………………………………. …. I
Abstract……………………………………………………………………………ii
CHAPTER ONE:
1. INTRODUCTION…………………………………………………………….………………1

1.1. BACK GROUND OF THE STUDY……………………………………………………....1

1.2 Statement of the problem………………………………………………………………2
1.3. Objectives of the study………………………………………………………….……….3
1.3.1. General Objective …………………………………………………………...………3
1.3.2. Specific Objectives of the study………………………………………..……………3
1.4 .Research question…………………………………………………………………………….4
1.5. Significance of the Study……………………………………………………………………..4
1.6. Scope of the Study ……………………………………………………………………...……4
1.7. Limitation of the study………………………………………………………….……………4
1.8 organization of the Paper……………………………………………………………….……5

CHAPTER TWO:
2. Review of related literatures…………………………………..………………………………6
2.1 Concept of consumer cooperative………………………..……………………………………6
2.2 Developments of consumer cooperate……………………………………….………….…….6
2.3 The importance of consumer cooperatives………………………………………………..….7
2.3.1 The marketing importance of consumer cooperatives ………………………….…………7
2.4 The basic factors in consumer ……………………………………………………..………….8
2.5 Formation and registration of cooperatives…………………………………….……………..8
2.6 Organizational structure of consumer cooperatives …………………………..………………8
2.7 Allocation of duties ………………………………………………………….………………..9
2.8 Registration of cooperative society……………………………………………………………9
2.9 Obstacles of consumer cooperatives society……………………………….………………….9
2.10 Procedures for the establishment of consumer cooperatives……………………………….11

CHAPTER THREE:
3. Research Methodology ……………………………….……………………..……………….12
3.1. Description of the study Area ………………………………………….….……………….12
3.2. Research Design…………………………………………………..…………………………12
3.3. Data Collection Method……………………………………………………………………..12
3.4. Sampling and sample techniques……………………...…………………………………….13
3.5. Method of Data Analysis ……………………………..…………………………………….13

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CHAPTER FOUR:

4. DISCUSSION AND RESULT:

4.1 respondent’s character …………………………………………………...………………….14
4.2 Benefits of consumer cooperative membership………………………………...……………18
4.3 The management of cooperative society …………………………………………………...20
4.4 The service of consumer cooperative………………………………………………..………20
4.5 Policies and procedures of cooperative……………………………….………….…..………21
4.6 Delegation of power and divisions tasks …………………………………………………....22
4.7 Awareness about cooperatives ………………………………………………………………22
4.8. Problems of consumer coop society ………........................................................…….……22
4.9. Values and principle of cooperatives ……………………………………………………….25
4.9.1 Attitude of the society towards consumer cooperative…………………………………….26

CHAPTER FIVE:
CONCULUSION AND RECOMMENDATION:
5.1. Conclusions …………………………………………………………………………………27
5.2 Recommendation ……………………………………………………………………………28
REFERENCES……………………………………………………………………………….…29
APPENDIX………………………………...……………………………………………………30

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 List of table
Page
Table: 1. Profile of the respondents………………………………………..…………….15
Table: 2: year of membership…...............................................................................16

Table: 3. Occupation of the society………………………………………………………17

Table.4. Founder of consumer cooperative society………………………………………17

Table: 5. Training problems of this consumer cooperative……………………..……… 18

Table: 6.Benefites being member of consumer cooperative…………………..……….. 19

Table: 7. Level of satisfaction as membership………………………………….………..19

Table: 8. Do you fell cooperative society is democratically managed……………………20

Table: 9. purchase consumer goods from your cooperative society……………………...21

Table: 10. Policies and producers of consumer cooperative…......................................21

Table: 11. Delegation of power and division of task problem…………………………...22

Table: 12.market problems in consumer cooperative…………………………………….23

Table: 13. More serious problem of consumer cooperative society………………………23

Table: 14.Responsible person to solve problems of consumer cooperative………….….24

Table: 15. Owners of your cooperative society………………………………….………25

Table: 16. Values and principles cooperatives………………………………………..…25

Table: 17. Transportation problem………………………………………………………26

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 CHAPTER ONE

1. INTRODUCTION

1.1. BACK GROUND OF THE STUDY

Cooperative is one of the older human activities for mutual use .Still cooperatives are most
widely used spread out economic activities both in primitive and modern society. In ancient
periods many pioneers lay their own idea about such cooperatives. They think it as a true way of
to overcome money lenders and intermediaries evil.

In our country Ethiopia cooperatives play a major role in creating employment opportunity and
bringing economic development in the whole country by organizing scattered and unutilized
human power. Among the different types of cooperative, consumer cooperatives are a business
by their consumer for their mutual gain .It is a form of cooperative often takes the form of retail
outlet owned and operated by those customer or consumer of the goods and services.

In the new colonies, every individual will join on the basics of voluntary and equality as both
producers and consumers but it failed afterwards (Robert own 1844).

As there is no encouragement from either government or employees, nevertheless it had become

the foundation of consumer cooperative movement, which is still successful in England (Jesiah
Selvam 2005).

Consumer cooperative is a business that owned by a group of its customers or members who
share any profit that it makes. The cooperative provide often also the individual who have
provide capital required to launch or purchase that enterprise. Consumer cooperatives claimed as
an effective to promote strong consumer protection. As there is the benefits of consumer
cooperative, but there are many problems. Among these problems; lack of efficient management,
lack of initial capital for organizing consumer cooperative, a few participation of women in
leadership process, inefficient availability of demand and supply among this consumer
cooperatives and others may also face the problems of consumer cooperative.

A consumer cooperative is a voluntary organization of consumers organized to obtain their

requirement of consumer goods and services on terms of greatest advantage to them. Most
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consumer cooperatives established based the principles enunciated by the Rochdale pionner
(Emelian off I.V, 1995).

When we see consumer cooperatives, there are many consumer cooperatives in the urban areas
like in Mekelle city. Among these consumer cooperatives in Mekelle city, especially in Kedamay
weyane the researchers focus on Abyssinia consumer cooperative which is used to provide
quality product to consumer members at reasonable price. In which it enables members to solve
their problem by their own by saving their money through purchasing a product at reasonable
price. It also protects members from the role of middle men by narrow the gap of producers and
consumers.

As we see from different books and different scholars (authors) generating their own idea about
consumer cooperative. From the different scholars (authors) Murray D.Linclon states the
advantage of consumer cooperative action.

 Consumer action has a mutuality of interest as opposed to producers’ interest.

 Consumer action will increase real purchasing power because. It introduces the
principles of production for use rather than for profit.
 Consumer action will help to estimate relatively definite demands.
 Consumers’ ownership of means of production and distribution automatically
reduces wastes, keep price down, avoid duplication of effort and facilitates the
operation credit.
1.2 Statement of the problem
In Mekelle zone, especially in Mekelle city, there are few number of consumer cooperatives but,
their size do not restrict them from rendering valuable service to their members and non-
members. In general their size do not restrict them from their importance .Abyssinia consumer
cooperative is one of consumer cooperative in Mekelle city. Although this consumer cooperative
is valuable and importance to the members and non-members of the people, but the town of
people do not want to participate in this consumer cooperatives society as their own benefit.
Even the organizing members of this consumer cooperative may not well understand why they
are become member of this consumer cooperative society.

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In addition to those problems there is also lack of awareness, training, motivation, and other
problems to know the importance consumer cooperative.
The problem from this fact is arising from both angles of members and promotional office.
The problems arise from members angles: is the member think when they entering into consumer
cooperative society, they believe as a means to aid or the incentive from government or other
agents. They also expect as a means to political participation to support the leading political
parties.
The problem arise from promotional office: is failure of agent or office to change the attitude of
peoples after formed of consumer cooperative societies.
This is the reality due the inability to formulate cooperators before and after establishment of
consumer cooperatives.
Even if there were some researchers conducted in Abyssinia consumer cooperative society,
however there are many problems that are not identified by the previous researchers which are
still now existed. So that the researchers aim was try to identify those problems which facing in
Abyssinia consumer cooperative society and to inform the concerned party.
1.3. Objectives of the study
1.3.1. General Objective
 The general objective of this study is assessment of problems facing in Abyssinia
consumer cooperative society.

1.3.2. Specific Objectives of the study

 To assess the organization policy and procedures of this consumer

cooperative
 To assess awareness creation to consumer cooperative.
 To identify the problems of the consumer cooperatives to search solution.
 To assess factors that hinder consumer cooperatives

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 1.4 .Research question
 How to assess policies and procedures of consumer cooperatives?
 How to reduce the factors that hinder consumer cooperatives?
 How to create awareness to the member about consumer cooperative?
 In what way do identify the problem of consumer cooperative?
1.5. Significance of the Study
It a firm believes that finding of the study is useful in many ways, like; the weakness collect
through the research finding helps the administration and other problems that face Abyssinia
consumer cooperative society in mekelle city.
The study also helps the members because raise ideas from members to work together to bring
change in their life of economic prospective. The finding of the research also help the
government to hire and give effective training to members and employees in order to reduce
those problems of Abyssinia consumer cooperative society and to sustain the development of
this consumer cooperative society. Finally, the study paves the way for further studies in Mekelle
city especially in Abyssinia Consumer cooperative.
1.6. Scope of the Study
The researchers aim is to conduct this research such of the problems that face in consumer
cooperative in Mekelle City, especially, in Abyssinia Consumer Cooperative. The study was
touching on what are the problems facing on the consumer cooperatives and also suggest the way
to over such problem. The researcher motto to conduct his study is consumer cooperative in
Mekelle City, especially in Abyssinia Consumer cooperative.
1.7. Limitation of the study
The most and prominent limitation to conduct this research paper was
- Lack of good experience of the researcher
- Lack of enough and witness information on the study area
- Lack of enough time availability
- Financial constraints of the researcher to conduct the research paper
- Unwillingness of the members, employees and others when the researchers
conduct questionnaire.

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 1.8 organization of the Paper
The paper was contains five chapters to senior research. Chapter one contains introduction which
includes background of the study, statement of the problem, objective the study (General and
Specific), significance of the study, scope of the study, and limitation. Chapter two contains
review of related literature; chapter three contains description of the study area and research
methodology; chapter four contains data analysis and interpretation; and chapter five contains
conclusion and recommendation.

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 CHAPTER TWO
2. Review of related literatures
2.1 Concept of consumer cooperative
Consumer cooperatives are business enterprises owned by consumers and democratically, cannot
be confused with will of shareholders, controlled enterprises. Cooperatives follow a unique
business structure or model, which can considered as truly socially responsible with core
principles such as concern for community and democratic ownership (Euro-coop, 2008). J.p.
Warbassa said that cooperative organization begins best with the people as consumers it is for
the individual user and absorber of things. The basic idea of cooperation is that the consumers
are everybody and that all of industry and organization of society should for society themselves.
As he believed that cooperation is not a class movement, consumers are not a class; they are
everybody.
While organized cooperative society, they are seeking class advantages; but rather the good of
entire society. On the other hand, the organization of capitalists and organization of workers seek
their own class advantages at the cost of the entire society. While stressing the consumer
supremacy, he stated that somebody must control industry. If the workers control it, it carried for
profit; if the consumers control it, it carried on for service. For this reason in the cooperative
society, the consumer member controls he labor that they employ (Krishna Swami, 1987).
Consumer cooperative is a business by its customers for their mutual gain. It is a form of
cooperatives often takes the form of retail out let owned and operated by this customers or
consumers of the good and service. The cooperative provide often also the individual who have
provide the capital required to launch or purchase that enterprise (M.Sheffrin, 2003).
Consumer cooperatives acclaimed as an effective instrument to promote strong consumer
protection movement (Cook 1995).

2.2 Developments of consumer cooperatives

William king (1786) of England gave practical guidance to translate Owens’s idea in to action.
Under this inspiration, many cooperative stores were organized by workers to escape from the
exploitation of ‘Truck Shop’ of factories and private traders. ‘Badgers’ while owns ideals were

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more exalted and millennial, Dr King’s teachings were more practical. Thus, he was nearer than
own to practical ideas of Rockdale cooperation, which come latter (Jack Baily, 1878).
The Rockdale society of equitable pioneers registered on October 24, 1844 and begun business
operation on December 21, 1844. This was said to be the true beginning of the modern
cooperative movement. The idea of Rockdale society of equitable pioneers set forth in the rule of
their society make up a body of principles, popularly known as the Rockdale principles that have
since inspired the cooperative movement thought the world. Those ideas were: Democratic
control, Open membership, Limited interest on capital, Patronage dividend, Cash trading, Sale of
pure and unadulterated products, Education for members, and political and religious neutrality.
None of the eight principles was individually novel but their combination was essentially new.
This was the originality of the pioneers. These pioneers organized their society as a revolt against
the unscrupulous practical practices of the truck shops of their employers and the capitalist
groceries. The rules of their association, therefore, have a relevant to the circumstances in which
they were working and specific purpose for which they had to operate (Krishna Swami, 2000).
2.3 The importance of consumer cooperatives
2.3.1 The marketing importance of consumer cooperatives
Consumer cooperatives have been assigned as an importance role in the distributive system in
the country and to promote a strong consumer protection movement (Wikepedia, 2007). In urban
areas, consumer cooperatives aim to provide quality goods to consumers at a reasonable price. In
rural areas, mare and more agricultural credit cooperatives and primary marketing cooperative
societies are involved in the distribution system to meet the consumer requirements. (Wikipedia
2007) In times of scarcity of essential commodities and raising prices, the public distribution
system should be introduced to insure equitable distribution of commodities at fair prices and at
subsidized rates even if the procurement has to be made at higher costs (Parkash, 2003). This
would be beneficial particularly to the low income group and vulnerable section of the
community; under planed economy sometimes it is necessary to enable section to have essential
commodities within these paying capacities of wholesale and retail level consumer cooperatives,
which are socially owned; nonprofit making trading organization engaged in the service of
community should be treated as part and parcels of public distribution system (Declerk, 1996].

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Economics are reflected in the prices and margins prevailing in the marketing. (Abbott 1958)
Thus, all enterprises concerned with the marketing sequences must be continually on the lookout
for new and better ways of performing their function and providing services and must adopt
them as soon as they promise savings in cost (Kottler, 2003).
2.4 The basic factors in consumer
The work: - An organization of different tasks or works
The people: - Assignments of various duties to people is the next important aspect.
The capital: - This involves the capital and material needed to carry out. The work assigned to
group and individual.
The work place: - This denotes the place of work the physical and psychological work condition
of an organization.
2.5 Formation and registration of cooperatives
The following are the points that should be kept in mind while we form the cooperatives before
registration
Cooperative society may accord their nature, be established at different levels from primary level
to federal level.
Persons who live within a given geographic area shall establish a primary society.
The number of members of cooperative society to be established shall not be less than ten
(through by laws, minimum numbers even could be more to make the society economically
feasible)
Society may sell some of its share to persons outside its area when the society faces shortage of
capital. (Proclamation NO_ 147/98, art 9)

2.6 Organizational structure of consumer cooperatives

The organizational structure of consumer cooperatives is, as other type of cooperatives, in
pyramid form. The members who exercise the ultimate power stand at the top of the
organization. They exercise their power through the general body which convinced who ever
called by them. These members elect the directors and makes board of directors who act on
behalf of them. The board of directors frames the objectives of cooperatives and lay down
policies to achieve objectives. The president has to consult and convince the board very too often

8
the board deludes to powers to delegate to executive, who is usually called a general manager or
secretary while, power was delegated, and responsibility for performance is also fixed (George
St.1903).
2.7 Allocation of duties
Definite job assignment to definite persons was made to different subordinates for ensuring
curtaining of work performance. These job assignments are first made to different management
members, who intern allocates the job among their subordinates.
2.8 Registration of cooperative society
The appropriate authority shall register any cooperative society, along with the detail name and
the nature of business.
Any society, when established shall submit an applicant form for registration with following
particulars to appropriate authority.
Minutes of founders meeting, The bylaw of the society in three copies, Name, address and
signature of members, Name, address and signature of members of management committee of
the society, A detailed description of, which provides that registered members of society have
meet their requirements for membership., Plans of the society, Documents showing that the
amount of capital of the society bank deposit, The description, of the land on which the society
operates and, Other particulars.
The appropriate authority shall register the society and issue of submission of application
If the application is rejected, a written explanation of rejection will be given within 15 days from
the date of application. If the member is not satisfied with the rejection, it can move to the higher
court within the jurisdiction of the proposed cooperatives (Proclamation number 147/98, Negarit
Gazeta).
2.9 Obstacles of consumer cooperatives society
The following points are the main obstacles or problems faced in the consumer cooperatives
society: Lack of professional employees. And Lack of confidence among new members on
consumer cooperatives. Fear of failure due to failure of other failed consumer cooperatives and
Inability to separate cooperative from political ideology.
Lack of market information: Market information is an important facilitating function in
marketing system (Roy, 1996). It facilitates marketing decisions, regulates the competitive

9
marketing decisions, and regulates the competitive market mechanism. It is vital to minimize
information gaps and uncertainties that exist in the agricultural sector of developing economy
such as that of Ethiopia. It is much needed by farmers in planning production and marketing and
equally needed by other market participants in arriving at optimal trading decisions.
Lack of efficient management system: Most of the stores of are run by persons who have
hardly any experience of business. They also don’t have adequate arrangements for the training
of the staff (T. K. Chandy 2001). .Pilferages has been a common disease in many stores. Some
stores come to grief because of the dishonest of managements prompt action was not taken
against such management members who were found guilty.
Lack of motivation: Motivation is one of the most important factors that determine the
organizational efficiency. All organizational facilities will go waste in lack of motivated people
to utilize the facilities effectively (M. K. Sarkor 2000).
Lack of employees’ commitment in the organization: The employee’s commitment in the
organization goals and intention to give long term service to the organization that can determine
employee’s expectation and satisfaction of their job. Such type of activities are determined and
measured by absenteeism, turn over, and employee productivity (David Schwartz, 1980).
Absenteeism: According to web esters dictionary absenteeism is practice or habit of being and
absentee and an absentee is the one who habitually stays away. This signifies the absence of an
employee from work (Webster dictionary).
Lack of inventory and verification of stocks: Inventory consists of goods held for sale to
customers, partially completed goods and materials and supplies to be used in production.
Inventory items are acquired and sold continuously by merchandizing and manufacturing
enterprise or acquired in place of Production, converted to a finished product by a manufacturing
enterprise. The sale of merchandise of finished products is primary source of revenue for most
non-service business organization (Mossich, 1989, 397). There was hardly any system of
inventory control. In most of the stores with the result there is over stoking of goods. In a number
of central stores the monthly or quarterly physical stock is not done and this has been responsible
for a good deal of pilferage (K. T. Chandy 2001)
Lack of consumer protection policy: Ethiopia has no such integrated consumer protection
policy. Consumer issues remedies being addressed in different regulatory regimes like the penal

10
code, civil code and other specific regulations. Much more is done to see effective consumer
protection policies in a country (Gebremedihine Birega, 1967). As stated above an official
committee set up in 1976 identified the following factors that caused losses to consumers: Higher
over head cost. Low margin of profit, Running uneconomic and small branches, Dealing mainly
on control items, Injudicious purchase Mismanagement and misappropriation, Lack of funds in
slow moving and unstable articles (K. T. Chandy2001 ).
In generally the problems the consumer stores have been studied by special committees or expect
or discussed in conferences and seminars.
2.10 Procedures for the establishment of consumer cooperatives
The ideas of forming cooperative were normally discussed at preliminary meeting, when the
prospective members to weigh probable advantage of establishing cooperatives against cost. A
cost and benefit analysis may be proposed at the rule of thumb to know. What would be the
probable loss if there were no cooperatives? Then survey committee may be aided technical
advance from the cooperative promoters. Generally the survey committee should answer the
following questions:
Is there a need for a consumer cooperative in particular location? What is the potential volume of
business to open this society? Is a good manager available?

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 CHAPTER THREE
3. Research Methodology

3.1. Description of the study Area

The Tigray national regional state is one of the nine states of the country or Democratic Republic
of Ethiopia. Mekelle is the capital regional state and it is located in the Northern part of the
country. The climatic condition in this area is neither to cold nor to hot.
In this town there are so many cooperative societies. In a report from Tigray cooperative
promotion and input marketing division indicates that there are different types of primary and
secondary cooperatives in the region which are: Agricultural multipurpose cooperative which
deals with input and output marketing of their members. The service cooperative provides
services to the members, saving and credit cooperatives to provide saving and credit purposes.
Consumer cooperatives are to provide consumption services to members and non members.
Abyssinia consumer cooperative is one of the cooperative societies that are found in Mekelle
city, especially Kedamay woyane in Kebelle 15. This society was established in 2000 E.C with
the total amount of 60 members of 19 females and 41 males.
At the time of establishment the beginning capital was 300,000 Ethiopian birr. And become
increasing 900, 000 today. The current amounts of members who are participating in this
consumer cooperative society are 80. From these members 61 males and 19 females, the new
members are 20 these members are males.
3.2. Research Design
When the finding takes place in this research, the researcher can use describe the type of research
because descriptive type of research is used to describe the current condition of the study to
analyze the problem facing on consumer cooperative.
3.3. Data Collection Method
When researcher studies his research, he is used primary methods of data collection. The primary
data is collected through questionnaires from the members of Abyssinia consumer cooperatives.
These data collections also include members, managers, accountants and employees if any was
directly concerned the issue.

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3.4. Sampling and sample techniques
It is obvious that the sample size and sampling techniques is used as a plan that specifies the
sources and the type information. Because of this the research as a design in is more flexible,
efficient, economical and at the same time descriptive type of data. The researcher takes the
sample from the total amount of 80 males and females by using simple random sampling takes
30 members. The reason for the researcher use simple random sampling technique is to give
equal chance to all the respondents.
3.5. Method of Data Analysis
The data that is collected from primary sources are analyzed by using quantitative and qualitative
data analysis technique.
Quantitative data analysis can be analyzed and communicated by using statistical tools like,
percentage and table of tabulation mechanisms.
Qualitative data analysis can also use to identify the characteristics, feeling, emotion, satisfaction
and attitude of respondents towards consumer cooperatives.

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 CHAPTER FOUR

4. DISCUSSION AND RESULT

This section of study deals with the analysis and presentation data that were collected from
respondents of consumer cooperative in Kedamay weyanay Abyssinia consumer cooperative.
The finding of the study was an accordingly be discussed in the same chapter. In this section,
responses from respondents are analyzed by using tables and interpretation.

4.1 respondent’s character

The aim of representing demographic back ground of respondents is to know their composition
in terms of sex, educational status, marital status, year of membership and occupation in
consumer cooperative society.

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Table: 1. Profile of the respondents

Major class Category Respondents

Number Percentage (%)

Sex Male 24 80%

Female 6 20%
Total 30 100%
Age 14-25 8 27%
26-35 10 33%
36-45 7 23%
Above 45 5 17%
Educational status Below 10 6 20%
Illiterate 11 37%
12 complete 4 13%
Certificate - -
Diploma 6 20%
BA degree 3 10%
Above BA - -

Marital status Mired 24 80%

Single 6 20%
Widow - -
Divorced - -
Source: own survey, 2014

Table 1: describes about the profile of the respondents in terms sex, age, educational status and
marital status in Abyssinia consumer cooperative society. In the set of composition of
respondents’ sex out of the total 30 respondents 24 or 80% respondents are males and 6 or 20%
are female’s respondents. This implies that the numbers of female members are very low.

15
In regarding age category (in years) of member 8 or 27% are between 14-25, 10 or 33% are
between 26-35, 7 or 23% are between 36-45 and 5 or 17% are above 45 years. This shows that
most of the respondents are between 14-25 years.

In regarding to educational back ground /status/ 11 (37%) are illiterate, 6 or 20% below grade10,
4 or 13% are completed grade 12, 6 (20%) are Diploma 3 or 10% degree. None of the
respondents are certificate and above degree. This implies that most of the members of Abyssinia
consumer cooperative society are illiterate.

In regarding to marital status, 24 or 80% are married and 6 or 20% of the respondents are single.
None of the respondents respond divorced and widowed. Additionally 90% of the respondents
are members of this consumer cooperative, the remaining are accountants, managers, employees
and others.

Table: 2: year of membership

Respondents
Category Number Percent
Year of 6 years 24 80%
membership
4 years 6 20%
Total 30 100%
Source: own survey, 2014

In the above table shows that year of membership out of the 30 total respondents 24 or 80%
respondents are 6 years of membership and 6 or 20% respondents respond those 4 years of
membership in this consumer cooperative. This implies that most of the members 6 years
membership. This indicates there is no member increment (entrance).

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Table: 3. Occupation of the society.

Respondents
Occupation Category Number Percent
Your society Member 26 87%
Others 4 13%
Total 30 100%
Source: own survey, 2014

The above table shows that 26 or 87% of the respondents respond that they are members of
Abyssinia consumer cooperative society, 4 or 13% of respondents respond that others like
management committee (control committee), accountant and others.

Table.4. Founder of consumer cooperative society.

Respondents
Yes No
N umber % Number %
Are you found of year consumer 24 80% 6 20%
cooperative?
As indicated the above table 24 or 80% respondents are the founder of this Abyssinia consumer
cooperative. Because this shows that when this consumer cooperative was established the
amount of members were 61 and the remaining 6 or 20% respondents are not the founders of this
consumer cooperative. This implies that they join to this consumer cooperative after
establishment or after 2 years until now.

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Table: 5. Training problems of this consumer cooperative

Respondents
Yes No
No % No %
Is there training problems in your coop society 26 87% 4 13%
As indicated from the above table most of the respondents gave there is a training problem. From
the total respondents 30, 26 or 87%, respondents said that there is training problem. From this
another respondents of 4 or 13% said that there is no any training problem.

4.2 Benefits of consumer cooperative membership

Consumer cooperative gives many benefiters’ of their members. As Mr Tesfay chair man of
Abyssinia consumer cooperative said that consumer cooperative are correct true marketing
agents, which help the society in different ways. They help not only members but also non
members. Currently consumer cooperative are the best ways to address people beside other types
of cooperatives. Almost all types of consumer cooperative distribute consumer goods, like soap,
sugar, oil, powder, teff……etc to members and non members (MR. Tesfay chair man of this
consumer cooperative society) being consumer cooperative has two major benefits. The first
enables the member to get consumer goods at reasonable cost and the second is it enables the
members to take part profit according to their share amount.

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Table: 6.Benefites being member of consumer cooperative

Respondents
Yes No
No % No %
Are consumer coop preventing from 25 83% 5 17%
exploitation of intermediaries?
Source: their own survey, 2014

Concerning the benefit of being members consumer cooperative, 25 or 83% respondents believe
that cooperative are the right option for protecting members from exploitation, and 5 or 17% are
not agree with idea. From this, what is concluding that majority respondents are benefited from
their consumer cooperatives.

For the main reason that most of the respondents said “yes” getting consumer goods at
reasonable price in the consumer cooperative society rather than privates individuals.

Table: 7. Level of satisfaction as membership

Respondents

Very high High Medium Low Very low

No % No % No % No % No %

. How is your level of - - 5 17% 18 60% 7 23% - -

satisfaction you have been a
members of consumer
cooperative society?
Source: own survey, 2014

As the above table shows 18 or by the respondents are satisfied medium being member of
consumer cooperative 7 or 23% respondents are satisfied low and 5 or 17% respondents are high
satisfied due to their membership on consumer cooperatives. So nearly 83% respondents are
satisfied low and medium. This implies that one weakness of this consumer cooperative.

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4.3 The management of cooperative society

Cooperative societies are democratically managed enterprise in which there is equal and
equitable share of profit, equal participation is found and movement the power management
committee and other committees come from members and out member.

Table: 8. Do you fell coop society is democratically managed

Respondents
Yes No
No % No %
Do fell your cooperative society is demography 20 67% 10 33%
managed?
As indicated in the table 20 or 67% respondents are believed that their consumer cooperatives
are demographically managed and 10 0r 33% respondents not believed. (Source: own survey,
2014)

4.4 The service of consumer cooperative

The primary motto (aim) of consumer cooperative is to render services its members and non
member services in consumer cooperative is backbone of their organization, in generally
cooperative are not organized to increase their profit, rather to insure their survival by selling
their products at reasonable cost.

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Table: 9. purchase consumer goods from your cooperative society

Respondents
Yes No
No % No %
Do you purchase consumer goods from your 30 100% - -
consumer coop society frequency?
Source: own survey, 2014

Many people realize that they are benefited from this consumer cooperative 30 or 100% of all
total respondents frequency purchase consumer commodities from this consumer cooperative,
such consumer commodities are: soap, sugar, oil, coffee, teff, power for bread…..etc. as
researcher concludes from the above information, it is good news for consumer cooperatives of
expand their services. Consumer

4.5 Policies and procedures of cooperative

Table: 10. Policies and producers of consumer cooperative

Respondents

Very high High Medium Low Very low

No % No % No % No % No %

How do you policies and - - 8 27% 4 13% 12 48% 6 20%

policies and procedures of your
consumer cooperative society?
Sources: own survey 2014,

As indicated the table concerning the policies and procedures of Abyssinia consumer
cooperative, non of respondents respond very good, 8 or 27% respondents respond the good, 4 or
13% respondents respond medium, and 6 or 20%, respondents respond very low. This indicates
that 60% of respondents respond the policies and procedures of Abyssinia consumer cooperative
are not satisfactory.

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4.6 Delegation of power and divisions tasks

Definite job assignments were made to different sub ordinates for insuring curtaining work
performance. These job assignments are first made to different management member, who in
turn allocated job among subordinates.

Corresponding to the nature duties commensurate authority must be granted to the subordinates
for enabling them to make adequate work performance. As authority without responsibility is
meaningless, Responsibility without authority is on empty vessel, legal system of the country
refers to the acts, rules, and laws that regulated obtained behavior along with the process by
which the laws of the country are enforced and through which readdress for graves definite job
assignment was made to different subordinates for insuring curtaining of work performance.

Table: 11. Delegation of power and division of task

Respondents
Yes No
No % No %
Is here any delegation of power and division of 18 60% 12 40%
task problem?
Source: own survey, 2014

As indicated from table 18 or 60% respondents respond that this delegation power and divisions
of task problem. This indicates that responsibility and authority doesn’t much, 12 or 40%
respondents respond that there is no delegation of power since of task problem.

4.7 Awareness about cooperatives

Although cooperatives are not new in Ethiopia, the people are not well aware about their benefits
and their meaning of consumer cooperative

4.8. Problems of consumer coop society

Problems are things that are unavoidable things in all situations, as the researcher found from the
respondents by questionnaire the major problems are:
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 Market related problem, Shortage of supplies, Capital related problem, Training related
problem, Transportation related problem, Awareness related problem, Administration
related problem and, Lack of enough shortage ware house.

Table: 12.market related problems in consumer cooperative

Respondents
Yes No
No % No %
Is there any marketing problem in your coop 24 80% 6 20%
society?
Sources: own survey, 2004

As indicated from the table 24 or 80% respondents respond there is marketing problem, 6 or 20%
respondents do not believed. This implies that marketing problems are one major problems of
Abyssinia consumer cooperative because majority of respondents respond marketing problem.

Table: 13. More serious problem of consumer coop society

No Which is more serious problem in your consumer coop society? No %

1 Member related problem 3 10%
2 Capital related problem 21 70%
3 Cooperative related problem - -
4 Environmental related problem - -
5 Social related problem - -
6 Administration problem 6 20%
Sources: own survey, 2014 As indicated from the above table the researcher concluded that 6 or
20% of respondents that there is administration problem 2 or 70% of respondents respond that
there is capital problem 3 or 30% respondents respond that there is member related problem 5 or
19% of respondents respond that there is no cooperative related problem and 3 o 10%
respondents also respond that there is also social related problem generally this implies that
administration, capital and member related problems are rather than the other problem which is
stated the above none of the respondents respond that environment problem.
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Table: 14.Responsible person to solve problems of consumer cooperative

Respondents
Who is responsible party to solve Number Percentage
problem of the society?
Member 8 27%
All society 18 60%
Management committee -
Control committee - -
Hired employees - -
Government 4 13%
Total 30 100%
Source: own survey, 2014

From the above table of respondents 8 or 27% of respondents that the respondents person /party/
to solve societies problem is the member, 18 or 60% of the society respond that the responsibility
of all society and 4 or 13% of the respondents respond that the responsibility government of the
respondents respond control committee, management committee and hired employment to solve
the problem of Abyssinia consumer cooperative society. This implies that from the total
respondents 60% of respondents are all society of Abyssinia consumer cooperative are
responsible to solve when the problems are happened.

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Table: 15. Owners of your cooperative society

Respondents
Who do you think owner of your coop Number % percentage
society?
Member 23 77%
Management committee 2 6%
Control committee - -
Hired employees - -
Government 5 17%
Total 30 100%
Source: own survey, 2014

Concerning ownership cooperative, 23 or 77% respondents believe that the owner of consumer
cooperative is members, 5 or 17% respondents respond that government is the owner and 2 or
6% respond that management committee is the owner none of them believed that the owner are
control committee, none of them said that hired employees.

4.9. Values and principle of cooperatives

Table: 16. Values and principles cooperatives

Respondents
Yes No
No % No %
Would you know principles and values of 7 23% 23 77%
cooperatives?
Is your cooperative implementing them? 10 33% 20 67%
Source: own survey, 2014

Concerning the values and principles of cooperative 7 or 23% respondents knows 23 or 77%
respondents do not know the principles and values of cooperatives. Additionally 10 or 33%
respondents believe that their cooperatives society is implementing it and 20 or 67% respondents

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not believe this idea. This implies that 85% of the members or other workers do not know the
principle and values of cooperative, even the chair person do not know the principles and values
of cooperative when the researcher was asked orally.

Table: 17. Transportation problem

Respondents
Yes No
No % No %
Is there any transportation problem in your 26 87% 4 14%
coop society to purchase consumer goods?
Source: their own survey, 2014

4.9.1 Attitude of the society towards consumer cooperative: consumer cooperative is

important to the members as well as non members of the society. As the researcher gets the
responses from the respondents 18 or 60% of respondents have positive attitude towards
consumer cooperative. Those respondents they respond that after have been membership of
Abyssinia consumer cooperative society, the living standard and level of income is improved, on
the other side 12 or 40% of respondents respond about consumer cooperative a negative attitude.
This implies that still some membership this consumer cooperative society a assumption is
negative.

Backward/ negative/ attitude of the people towards consumer cooperative happened due to: lack
of motivation, award, training, participation, honesty, awareness, responsibility, administration
and also other problems face problems of this societies towards consumer cooperative.

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 CHAPTER FIVE

CONCULUSION AND RECOMMENDATION

This section mainly deals with conclusion and recommendation of the study on the topic of
Assessment of problems facing in consumer cooperative. The aim of which is to forwards
suggestions based up on the division and representation of the data that collected from the
members, management committee, chair person, and others of consumer cooperative of
Abyssinia consumer cooperative.

5.1. Conclusions

Consumer cooperative are enterprises, which benefits consumer to member as well as non
members. Assessing of problems facing in consumer cooperatives help the members, the
committee, the managers, the chair person, and also the society itself to find problems and to
search solution for them. The study is through limited in scope, attempts to assess problems on
consumer cooperatives in Mekelle city, Abyssinia consumer cooperative under the data analysis
as the majority of respondents respond, the problem and procedures are not safe to motivate
people to become strength of members, the majority of the members do not know the principles
and values of cooperative.

The problem facing in consumer cooperative addresses both government and member. As many
respondents respond government problems its inability to hire enough professionals who observe
and work with cooperative that is administration problem, inadequate training program,
transportation problem, marketing problem, supply problem, and also other problem….etc. on
the other hand, the problems of member is the failure of sprit unity (cooperation), some members
need to use the entire cooperative asset for individual purpose. Lack of members honesty and
also not to work as their own property.

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5.2 Recommendation

Based up on the major finding and conclusion drawn here above researcher would like to suggest
the following recommendation in advance:

 The Abyssinia consumer cooperative should have to work with different educational
centers like universities to give training to employees and members.
 The promotion office should take part to support Abyssinia consumer cooperative to
increase the current awareness of people towards consumer cooperative.
 The different mechanism like motivation, training and reward sing system of employees
and members to narrow low productivity, labor turnover rate and lateness at work.
 The government should have to work to add additional professional workers on area of
consumer cooperatives.
 It is advisable to cooperative to implement the policies and procedures of cooperatives.
 It is better operate bazaar, promotion work and common meetings and seminars to
develop sense of belongingness experience sharing and awareness creating works with
different consumer cooperative societies.
 They should create transport access at minimum to consumer coop help the society from
private individuals.
 To overcome marketing problems of consumer cooperative, the government should help
the societies from private individuals.

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 REFERENCES

 Abbot J.C and Make ham J.P, 1958 marketing problems and improvement of problems FAO
Rome
 Cook M. L, 1995 marketing of agriculture cooperative
 David Chwartz, 1980 marketing of agricultural input and output in developing country
 Emilian off I. V, 1995 economic theory of cooperative
 Euro coop, 2008 consumer cooperative social responsibility bringing in value in retail business,
www.euro.com
 Jesiah Selvam, 2005 teaching material of cooperative
 K. chandy 2001,agricultural and environmental education
 Krishna Swami,1987 history of cooperative thought
 Kotler, 2003 marketing management 11th edition
 Murray D. Linclon, consumer cooperative and rural marketing
 Parcash,2003 marketing activities and cooperatives
 Robert Own, 1844 cooperative concept and theory
 Wikipedia, 2007 agricultural marketing cooperative

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 APPENDIX

MEKELLE UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF COOPERATIVE ACCOUNTING AND AUDITING

Questionnaire for respondents:

Dear respondents I am conduct a research on problems facing on consumer cooperative in your

consumer cooperative society for the partial fulfillment of my BA degree, In order to get the
necessary data. I have distributed this questionnaire help to the researcher and cooperatives
studies for academic purpose.

General question

Demographic characteristics of respondents

1. Sex: male  Female 

2. age: 14-25  26-35  36-45  above 65 

3. Education status: Below 10  12 complete  certificate 

Diploma  BA/BSC  above 

4. Marital status: Married  single  divorced  widowed 

5. Year of membership: one year  two years  three years 

Four years  above four years 

6. Are you foundering of your consumer coop. society?

Yes  No 

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7. Is there training problem in your coop society?

Yes  No 

8. Who do you think the owner of your coop. society? ________________.

9. Do you fell coop. society is democratically manage?

Yes  NO 

10. Would you know the principles of cooperatives?

Yes  No 

11. How do you evaluate policies and procedures of your consumer cooperative society?

Very good  good  low  very low 

12. Is your coop society implements the principles and values of coop?

Yes  No 

13. Do you believe that is there supply problem in your coop society?

Yes  No 

14. If yes, how __________________________________________________

15. Is there any marketing problem in your coop society?

Yes  No 

16. Do you believe that consumer coop is the right option for protecting members from
exploitation?

Yes  No 

17. If yes, how? _________________________________________________________

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18. How is your level of satisfaction after you have been a member of coop society?

Very high  high  medium  low  very low 

19. Who would you think the responsible party to solve problems of your consumer coop
society? ___________

20. Is there transportation problem to purchase consumer goods from your consumer coop
society frequently?

Yes  No 

21. What is the attitude of the society towards consumer cooperative?

______________________________________________________________________________
__________________________________________________________

22. If there is backwards attitude to the society towards consumer coop. How to give awareness
to the society? _____________________________________________

_______________________________________________________________________

23. Do you purchase consumer goods from your consumer cooperative society?

____________________________________________________________________________

24. Which is more serious problem in your consumer cooperative society?

Member related problem  cooperative related problem 

Economic related  social related problem 

Institutional related problem  environmental related problem 

25. What is your occupation in your cooperative society? -----------------------------------------------

------------------------------------------------.

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