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.