Performance Measurement System among Primary Agricultural Marketing Co- Operative Societies in Rombo District, Tanzania

Abstract

Co-operatives have been important organisations contributing to the social economic growth of the country and improving the welfare of the members. Given the nature of the co-operatives and the environment in which they operate, a proper measurement system is required to measure their performance. However, the performance of these cooperatives especially primary Agricultural Marketing Co-operative Societies (AMCOS) at institutional level has been reported by using the traditional approaches such as profit and ROA. These traditional approaches are likely to give misleading information since the co-operatives have both economic and social roles to play. Thus, the study aimed to establish key performance evaluation framework factors, examine the causal relationships among performance measurement system aspects, identify the Success Factors (SFs) and evaluate the performance of AMCOS. The study used a mixed method research design applying qualitative and quantitative approaches. The sample size was 334 co-operative members of AMCOS. Systematic sampling technique was used to obtain respondents. Qualitative data were analysed using content analysis by the help of Atlas software. The quantitative data were analysed by descriptive statistics, Factor Analysis, Structural Equation Model, Regression, Paired t-test and ANOVA. The study established five measurement aspects namely: financial, membership, learning and growth, internal business process and social. The study further revealed that there is a causal effect relationship between: learning (competency, staff satisfaction, training and education, number of employees, staff retention, employee skills) and internal business process (quality of service and quick service delivery, sufficient facilities, use of technology, new product development); internal business process and member aspect (member retention, member increase, member satisfaction, market share increase, member profitability); and member aspect and financial aspect (profitability, cost reduction, price, revenue growth, ROI, share increase). It also established eleven (11) SFs that were grouped into three categories: commitment, governance and strategy. The study also found that members perceived the co-operative to perform better in nonfinancial aspects especially in social aspect compared to financial performance. However, there was a positive contribution of non-financial performance indicating that there is no trade-off between the two sides. The study concludes that in order to understand well the performance of the primary AMCOS, the results should come from the holistic approach. The study recommends to the policy makers, practitioners and researchers to apply the aspects when evaluating AMCOS performance in order to have a holistic view of the performance for better monitoring and managing. Provided that members benefit financially as well as non-financially, AMCOS should make sure they balance these dimensions so that they benefit members and become competitive in the market. The study recommends to the policy makers and AMCOS to involve all studied aspects in order to have a full reflection in terms of AMCOS performance. It is also recommended that emphasis should be given to the learning aspect so that will influence the other aspects. The study contributed to the knowledge by developing a performance measurement system framework specific for the primary AMCOS operating independent in doing their businesses.