Social Statement Approach to Cooperative Social Performance Assessment: A Case of Lume Adama Farmers Cooperative Union in Ethiopia

Social Statement Approach to Cooperative Social Performance Assessment: A Case of Lume Adama Farmers Cooperative Union in Ethiopia
M. Karthikeyan
2013

EMES-SOCENT Conference Selected Papers, ECSP-LG13-23

Cooperatives are democratic organizations, which are for the members, of the members, and by the members. Cooperative accounting is an easy process which has different stages to process accounting data from various sources to produce and disseminate accounting information about the cooperative business in the form of accounting reports. Cooperatives are engaged not only in doing business but also rendering social services. Apart from preparing regular accounting statements and records they are expected to prepare social accounting reports since they engage in social projects to serve different stakeholders. They have to prepare social income statement, which contains social benefits and costs to members, employees, community and the government. Moreover, they have to prepare social balance sheet to show the position of social assets and liabilities. This paper adopted social statement approach. The application of cooperative social accounting and reporting is discussed to assess the social performance of Lume Adama farmers Cooperative Union as a case which is the first cooperative union organized in Ethiopia. Social Statement Approach was adopted and social accounting statements like social income statement and social balance sheet were used to show the social performance of the union. The study was also supported with Stakeholder Survey to elicit information from the stakeholders of the union. All the management committee members (9), all the employees (37), and 140 members and 140 non-members were selected as samples by simple random sampling procedure. The social accounting data from various accounting statements were collected as secondary data and processed through the preparation of social accounting and reporting tools such as social income statement and social balance sheet for five years to social performance of the cooperative union. Perceptions regarding social activities of the union were assessed among the stakeholders of the union. The responses were scored and the respondents were categorized based on their perception level into high, moderate and low. The union has been undertaking social projects and social activities for the benefit of the members, employees and the community where it exists. The social statements show that the cooperative union is engaging more in social projects like hospitals (clinic), bakery unit for employment creation, school for stakeholders’ children, and other welfare activities, which resulted in net social benefits to stakeholders. The stakeholders perceived highly on the social performance of the cooperative union since they have been benefiting from the social activities of the union. The cooperative union has created social reserve for the purpose of social activities. This is a model cooperative to other cooperatives in the country and adheres to and practices the cooperative principle of “concern for community”.

Social Statement Approach to Cooperative Social Performance Assessment: A Case of Lume Adama Farmers Cooperative Union in Ethiopia

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