An evaluation of South African worker co-operatives against specified business success factors

PhD (Business Administration), North-West University, Potchefstroom Campus, 2015Co-operatives, particularly worker co-operatives, form an integral part of the social and economic development efforts of the South African government. However, worker co-operatives have not achieved the expected results and have mostly remained survivalist in nature, In the literature study, this research explored the potential of worker co-operatives in terms of social and economic development, the state of worker co-operatives in South Africa according to previous research and the challenges faced by worker co-operatives. The submission is that worker co-operatives can only reach their potential in social development when they achieve business success. Therefore, business success factors were determined and criteria for these co-operatives to be classified as successful established. These criteria were as follows: * Longevity (operating for more than three years). *Profitability (showing a surplus for at least one year). * Financial Independence (operating without external funding for at least one year). * Member Income (at least R955 per member per month). The research population for the research was actively operating worker co-operatives registered as clients with the Small Enterprise Development Agency (Seda). A questionnaire exploring the demographics of members, the financial position of the co-operatives and the way in which they were managed and operated were developed. The questionnaire contained questions with regard to financial practices and management, marketing management and activities, operations management, human resource management, management processes.and the support received from development institutions. In addition to the evaluation of the business performance in terms of the criteria for success, the research evaluates the way in which worker co-operatives are managed and operated in terms of established business practices. It, moreover, explores the impact of support initiatives by government institutions and a framework for future development efforts is suggested. The study's results show that worker co-operatives are operating at a level where they are unable to fulfill their expected role in economic and social development. Various management and operational challenges were identified. Moreover, it was found that current support initiatives do not have the desired developmental effect.Doctora