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EFFECTS OF HONESTY ON COOPERATIVE ORGANIZATION

CHAPTER ONE

INTRODUCTION

1.1   Background to the Study 

Today, in an era when many people feel powerless to change their lives, cooperatives represent a strong, vibrant, and viable economic alternative. Cooperatives are formed to meet peoples’ mutual needs. They are based on the powerful idea that together, a group of people can achieve goals that none of them could achieve alone. For over 160 years now, cooperatives have been an effective way for people to exert control over their economic livelihoods. They provide a unique tool for achieving one or more economic goals in an increasingly competitive global economy. As governments around the world cut services and withdraw from regulating markets, cooperatives are being considered useful mechanisms to manage risk for members in Agricultural or other similar cooperatives, help salary/wage earners save for the future through a soft-felt monthly contribution that is deducted from source, own what might be difficult for individuals to own by their efforts, strengthen the communities in which they operate through job provision and payment of local taxes.

Cooperatives generally provide an economic boost to the community as well. Incidentally, cooperative despite its old age is not very popular in Nigeria. Only recently worker cooperatives started gaining ground among working class citizens, most of who find it difficult to save part of their salaries/wages for the rainy day. Hitherto, cooperative societies were thought to be associations meant only for farmers, small traders and other very low-income earners. This explains why quite a number of cooperative farmers are found, particularly in southern Nigeria 1 This Study has been published in the official journal of the Department of Public Administration, Ahmadu Bello University, Zaria-Nigeria Ahmad Bello Dogarawa, Department of Accounting, Ahmadu Bello University, Zaria.

The Role of Cooperative Societies in Economic Development The problem is that many people do not know much about cooperative, its mechanisms and role in economic development, and how it is considered in the world as a Third Force, an alternative and countervailing power to both big business and big government. Against this background, this study examines the role of cooperative societies in economic development with a view to throwing some light on the nature and features of cooperatives, the benefits and the formation and management of cooperative societies. The study investigates the ways in which cooperatives can act as agents towards sustainable community development.

The justification of the study precipitates from the fact that although investigating the role of cooperatives on the international scale is not a new phenomenon, in Nigeria, results of such researches are still scanty and incomprehensive. The study is a descriptive survey, which involves the collection of data for the purpose of describing the role of cooperative societies in economic development. The remainder of the study is organised as follows. Section two gives a background on cooperatives, which serves as the theoretical framework. Section three assesses the role and mechanism of cooperative societies. Section four highlights the steps involved in starting a cooperative. Section five discusses the challenges facing cooperatives and section six summarises and concludes the study.

The effects of honesty on cooperative organizations are pivotal to their overall functionality, sustainability, and impact. At the core of cooperative principles lies the fundamental value of honesty, which permeates every aspect of the organization's structure and operations. One of the primary effects is the establishment and nurturing of trust among members. In a cooperative setting, where individuals collectively contribute to and benefit from shared resources, transparent communication and honest dealings create a foundation of trust. Members feel assured that their contributions and interests are handled with integrity, fostering a cooperative environment based on mutual respect. Birchall (2019)

Moreover, honesty significantly influences member satisfaction and commitment. When cooperative organizations operate with transparency, ensuring that members are well-informed about decisions, financial matters, and strategic directions, it enhances member satisfaction. Clear and honest communication instills a sense of ownership, belonging, and commitment among members, fostering a cooperative culture where everyone feels valued and engaged.

Financial integrity is another critical facet influenced by honesty within cooperative organizations. Transparent financial reporting, accurate bookkeeping, and ethical financial practices are paramount. Members trust that their financial contributions are handled honestly, ensuring the cooperative's fiscal responsibility and long-term stability. Financial honesty not only builds confidence among members but also attracts support from external stakeholders, including financial institutions and regulatory bodies.In the realm of cooperative governance, honesty plays a central role in conflict resolution. Open and honest communication channels provide avenues for addressing conflicts and disagreements constructively. Members and leaders who engage in truthful discussions can navigate challenges collaboratively, preventing the escalation of conflicts and contributing to a

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