An Investigation on the Factors Influencing the Success and Failure of Co-Operatives in the Chris Hani District Municipality (CHDM), Eastern Cape Province, South Africa

Abstract

In an era when the level of unemployment and poverty continues to be a challenge in both developed and underdeveloped nations, many countries have identified the need to strengthen the legislative frameworks that perceive co-operatives as resilient, vibrant, and viable economic alternatives. However, there is a lot of literature pointing to the failure of co-operatives to live beyond five years. This study, hence, explored the factors that cause Co-operatives to fail despite the support received from governments. The study used a thematic analysis descriptive qualitative approach with data collected from five Co-operatives in the Chris Hani District Co-operatives in the Eastern Cape, Province South Africa. In-depth interviews were used in the study, as such, a narrative of verbatim accounts was used to derive themes and sub-themes for results analysis. The findings revealed countless aspects that hinder the progress of Co-operatives such as inadequacies associated with the lack of managerial skills for good governance, age gap among members and viewing the co-operative as just a project, not a business enterprise, political interference and infighting among members. The paper concluded that Co-operatives indeed offer a significant contribution to the socio-economic development and need to be effectively managed. The paper recommended that monitoring and evaluation instruments by funders and government departments responsible for registering and guiding co-operatives be developed. The study will help Co-operatives identify more ways of becoming successful and sustainable. Keywords: Chris Hani District Municipality, Co-operatives, Socio-economic Development, Government, Success, Failure, Eastern Cape Province