Revitalization Model for Village Unit Cooperative in Indonesia

Abstract

Rapid expansion by modern businesses impacts significantly on traditional businesses, including Village Unit Cooperative as a business model mandated by The Indonesian Primary Constitution, i.e, The Constitution of 1945. Several weaknesses faced by Village Unit Cooperative against modern business include limited resources (i.e, financial and infrastructure), low level of education for employees and managers, traditional managerial style, and so-forth. Data collected through in-depth interview with the head of the cooperative unit and other related officers as well as village unit cooperatives' managers and staffs in Banyumas Region, Indonesia as a sample of this study, conclude that almost Village Unit Cooperatives are in bad financial performance. Therefore, it needs an effective revitalization model to strengthen both financial and nonfinancial performances of cooperative to keep the survival of this business. This study aims to find out an effective revitalization model that could be implemented on Village Unit Cooperatives in Banyumas region in particular and as a model for all Village Unit Cooperatives in Indonesia in general. Therefore, the Village Unit Cooperatives are able to survive and contribute in boosting populist economic system for Indonesian people. To achieve this objective this study implements qualitative approach by using observations, in-depth interviews, and focus group discussions in data collection during the 2014-2015 period. Then, data is analyzed with the interaction method which consists of data reduction, data presentation and drawing a conclusion to develop the most appropriate revitalization model for Village Unit Cooperatives in Indonesia. Moreover, findings of this study suggest that the revitalization of Village Unit Cooperatives could be developed in several steps, i.e, classifying Village Unit Cooperatives into active and inactive, reactivating and merging inactive Village Unit Cooperatives, restructuring all Village Unit Cooperatives, and strengthening their businesses.

The Revitalization Model Through the Implementation of Accounting Information System for Village Unit Cooperative in Banyumas Region, Indonesia

“…As explained by Ropke (1995) cooperatives are business organizations whose owners or members are also the company's main customers. Moreover, the VUC is an all-round cooperative which commonly consists of villagers where its working area usually covers one district (Riswan et al, 2017).…”

“…Village Unit Cooperative (hereafter, VUC) is a type of business that oversees various business fields, such as agricultural production facilities, trade, agriculture, savings and loans, and so-on. This type of business has been going on for a long time in Indonesia and its benefits have been felt by the wider community and contributed to providing employment and driving the economy of the country (Riswan et al, 2017). In addition, cooperative is a type of business entity mandated by the basis of the constitution for the Indonesian State, i.e., the 1945 Constitution.…”

A Comparison of the Cooperative structure in Indonesia and Hungary

“…The government notably guaranteed both marketing and market price to encourage the growth of farm cooperatives. A research from Riswan, Suyono and Mafudi (2017), found that during the New Order or the Suharto regime from 1980 to 1990, Vucs experienced success, notably in financial performance. However, the success in that period was mainly caused by the monopolistic system in the Vucs in managing seeds and fertilizers.…”

Entrepreneurship attitude of managers, member participation, and cooperative performance: Evidence from Indonesia

“…Unfortunately, the rapid growth of the quantity of cooperatives in Indonesia is not matched by the increasing participation of members. Participation of members in Indonesian cooperatives is still low (Riswan et al, 2017) and their awareness to participate both professionally and actively is still below the expectations of the government. Taiwo (2011Taiwo ( , 2015; Ernita, et al, (2014ab, 2015Ernita, et al, (2014ab, , 2016; and Hadayati et al (2016), show that member participation is vital in improving cooperative performance.…”