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Study of Effective Factors on Success of Poultry-Farm Cooperatives in Province of Isfahan - Iran

Ramezani, Masoud. 1 , Amini, Amir Mozafar 2

Abstract

The purpose of this study is to examine the factors affecting the success of poultry farming co- operative companies in the Province of Isfahan, Iran. Based on Cluster Sampling Method, and Cochran Formula, among 15 companies with 1,768 members; 9 companies and 173 members were selected for this study. After completing the questionnaires, a criterion was chosen using the AHP method. Statistical tests such as Factor Analysis, Alpha Index indicated that the concepts used in this study had a very high degree of reliability and validity. The results of this research is indicative of the reality that, overall, the co-operatives have been unsuccessful in accomplishing their charter’s objectives and meeting their members’ expectations. The test results from the Path Analysis indicated that in a sequence the co-operatives’ efficiency was based on external organizational factors, training quality, manager's expertise, and members’ participation and knowledge, and these factors had the most influence on the success of co-operatives.

Key

Words:

Agricultural

Co-Operative

Companies,

operative Companies, accomplishment, Path Analysis

Co-Operative

Poultry

Farming

Co-

Introduction The most important economical and social achievements of human beings have been through participation. In reality, Iran’s Agricultural Department, because of its few number of social and trade organizations, is still considered as the weakest economical and social sector in the country. This could be the reason that the decision-making in regard to the destiny of Iran’s Agricultural sector is still occurring outside the farmers’ influence. The most important factors leading to the weakness and inexistence of agricultural sector in Iran can be described as follows:

1. Continuation of government’s presence as the main provider of services to the farmers

2. High illiteracy index

3. Inadequate information about the market competitive conditions

4. Lack of urgency to create organizations through farmers

5. Little information about the urgency to create collaborative management

6. Weakness in advancement

7. Lack of altering the regime in the administrative structure appropriate with today’s economical and social urgencies

8. Influence of the power of authority (Government)

1- Masters Degree in Rural Development, Faculty Member of Islamic Azad University, khorasghan (Isfahan) Branch 2- Assistant Professor, Faculty Member of Rural Development Department, Isfahan University of Technology

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All and all, these factors can influence the decision-making that is done from the top to the bottom of the organization. The government actions that have led to the protection, and growth of the power of authority can be counted as the most significant factor in non-existence or the inadequacy of social, and trade organizations in the Agricultural sector (Amini & Ramezani, 2006). In today’s world, without any doubt, one of the techniques used to attract people to participate, on a large scale, is through formation of co-operatives. In regard to the important role co-operatives can play in the development of the country’s agricultural sector, this current research will study the factors affecting the success of co-operative companies of poultry farming in the Province of Isfahan. In this research, while assessing the degree of co-operatives’ success in achieving their charters’ objectives, we have also explained and recognized the internal organizational factors, and management and manpower aspects which are important to the success of co-operatives. We have also identified the difficulties and present inadequacies in the path of co-operatives’ development. This is done in order to provide a compilation of practical techniques which are efficient and suitable in helping the administrators in this sector. In regard to the success of Agricultural co-operative companies in Iran, the findings from a variety of research studies are an indication that these companies have not been successful in achieving their objectives. (Aghajani Varzaneh, 2001, Amini, & Safari Shali, 2002. Karami, & Rezaee Moghaddam 2000, Amini & Ramezani, 2006). Unfortunately, the co-operatives’ development in the Third World Countries seems to be simple and superficial, and no attention has been paid to implementing the in-depth philosophical principles of the co-operatives. (Apthorp, 2002). In this direction, changing the organizational structure, and changing the principles and rules of the traditional co-operatives to the more modern ones should be the priority in order to help the co-operatives solve their problems, and reach advancement. (Akwabi, 1997). The research results from John and his colleagues studies confirm that the members’ understanding and loyalty toward the cooperation principles is one of the most effective factor in the success of the co-operatives (John et All, 2001). The co-operative members’ learning and also deeper understanding of the value and cooperative principles is one of the factors important in the success of co-operatives (Amodo, 2001). Darvishinia, Amini & Ramezani, Cobia, and Navarro, have considered the members’ participation in co-operative affairs as the main factor being responsible for the success of co- operatives (Darvishinia, Amini & Ramezani 2006, Cobia & Navarro, 1972). Sar Sakhti Erqui has considered the interpersonal and management factor in the co-operatives, and he has categorized them as factors totally influencing the success of co-operatives (Sar Sakhti Erqui,

1995).

The United States Ministry of Agriculture has emphasized the importance of members’ participation and its effect on the success of the agricultural co-operative companies. This ministry considers participation being dependent on the belief factors based on the cooperative principles. (USDA, 1998). The Australia’s Agricultural Council also insists that co-operative members’ participation is directly related to the success of the co-operatives depending on the members’ beliefs about cooperation principles (AAC, 1998). Studies have indicated that when all the

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members have a control over co-operative affairs, the reliability index of the level of trust was higher among members and this led to the strength of the co-operative foundation (Guinnane,

1997).

Also, members’ homogeneity and the stability of small groups have deservedly influenced the success of co-operatives (Didi, 2004). Hakelius has stressed the role of members’ participation and loyalty in the success of co-operatives. Also, the role of members’ values which has been influenced by the beliefs, perceptions, and insights has been considered (Hakelius, 1996). Also, management weakness, individualistic spirit, and omission of cooperative principles are considered as obstacles affecting the success of the agricultural co- operatives (Zhu & Leonard, 1998). Russoa and his colleagues, in addition to, considering the members’ understanding of cooperative principles and their beliefs about participation, they have also considered the interpersonal and management factors in co-operatives, and have classified those as factors effective in the success of co-operatives (Russoa et all, 2000). Bhuyan has also indicated that disloyalty in following the cooperative principles, and unavailability of powerful managers among the members as the most important obstacle affecting the success of co-operatives. There is a significant correlation between the management technique and degree of success. The co-operative companies which have the benefit of full-time skilled managers are evaluated as been more successful. Establishing official requirements also has a positive affect on the success of the co-operatives. Also, according to Bhuyan, the management quality, customer relationship, members’ enthusiasm, members’ level of trust, members’ protection, and board of directors’ affirmation and leadership has had an affect on promoting co- operatives (Bhuyan, 2000). Also, training the work force which is the 5 th of the seventh of cooperative principle was approved in the 31 st International Cooperative alliance (Ministry of Cooperation, 1998), and was considered as an independent variable in this research. Without any doubt, increasing the organizations’ efficiency will guarantee the increase in human resources’ proficiency and enhancing human resources efficiency through guaranteed training and development of knowledge and expertise and creating desirable behavior will lead to successful jobs. Amini and Safari Shali, Amini and Ramezani believe that training all levels and Bruynis, also believes that training the employees and managers of co-operatives are an effective way to create successful co-operatives (Amini, & Safari Shali, 2002, Amini & Ramezani 2006, Bruynis, 2001). The presence of individuals with little training and slightly specialized trainings will be a serious obstacle toward the development and activities of co-operative companies (Rodriguz, 2003). The research collected by Agha Jani Varzene, Amini and Safari Shali, Amini, Ramezani and Ahmadi, and also Amini and Ramezani and corroborators is that training is one of the most effective factors affecting the success of co-operative companies (Amini & Safari Shali, 2002, Amini & Ramezani 2006, Amini, Ramezani, & Ahmadi, 2002).

Research Methodology First of all, the domain of this research is formed by members of co-operative companies of poultry farming. Secondly, they all actively work in the Province of Isfahan. Based on our research objectives, the members and managers of co-operative companies form the statistical

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population of this study. Because of limited statistical population of managers; all CEO’s, and members of the board of directors were selected as the statistical sample. In practice, due to unavailability of managers and or lack of their cooperation with the research group, opinions of only 30 people (53.5%) from this group was studied. With using Cluster Sampling method, from fifteen active companies in the province, only ten companies in different parts of the Province of Isfahan were selected in this study. By using Cochran formula, size of the statistical sample from the members’ statistical population was taken (Cochran, 1976). Thus among the10 selected companies with 972 members, only 143 people were selected for this study in order to direct the distribution of samples within the classes (Jolliffe, 1986). For collecting the essential research information, two methods - Documentary and Field Study along with direct observation, in two forms; Extensive and Profound, and survey method was used. For this purpose, by using a made-up questionnaire, the opinion of the CEO’s, the Board of Directors, and the members about the efficiency of co-operative companies was assessed. After explaining the construction of the index, and doing the theoretical framework of the research, three methods - Management by objective, Self Appraisal, and Rating Scales were used to evaluate the agricultural co-operative companies (Khamoushi, 2003). In the present direction of the research, the dependent variable was based on the success of co-operative companies of poultry farming in the Province of Isfahan, along with its members and management, in reaching their pre-determined objectives. In this direction, for measuring the success of these companies, first according to the charter, the objectives of the co-operative companies of poultry farming, in five dimensions, providing production supplies for the members, market regulations, and offering services in three areas - economical, specialization, and training was evaluated by giving seventeen questions related to this matter. For other indices, a number of questions were designed in order to measure the considered conceptual meaning. Afterwards, the internal organizational variables – interpersonal and management factors were considered in order to evaluate the affect of success in co-operative companies. In order to explain and measure the affect of the above-mentioned concepts, the Correlation Indexation Construction Method was used (Sarmad, 2000). In the pilot study, the degree of validity and level of reliability in the indices were tested and their flaws were resolved. After completing the research, the research factors were tested again, and their degree of reliability and validity were examined with Alpha Cronbach and index – KMO (Kaiser-Meyer Olkin) (Sarmad, 2000).

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Table 1validity & reliability of the questionnaire used

Concepts

Number of Questions

Reliability

Validity

Members

Managers

Members

Managers

Members

Managers

Member participation in the cooperative affairs

6

manager's expertise

5

Interpersonal skills of managers

3

Training

3

Level of Success

17

7

3

*

3

17

0.5085

0.8279

0.7988

0.7665

0.7215

*

0.8525

0.6122

0.6805

0.8505

0.602

0.824

0.694

0.681

0.500

*

0.825

0.500

0.800

0.787

*In the managers’ questionnaire, the above-mentioned indices were not evaluated.

The test results in Table 1 indicate that the questions in the survey had a relatively high validity, reliability, and in regard to constructing the concepts in mind had the required practicality. The dependent variable and some of the independent variables in the research were formed from several rank variables and interval variables (Likert Scale). The combination of some of these ranks and interval variables, and utmost constructing a new interval variable was quite a complicated task that was achieved through the use of a criterion. By using the criterion method, identical criterions were converted into mental concepts, and the rate of each was measured. Different methods for combining weights exist which in the present research the Analytical Hierarchy Process (AHP) is used (Ghodsipour, 1999). For this purpose, first with using Factor Analysis, the weight of questionnaire of each index was calculated. Afterwards, with Index Weighting (Wij) in the grade of each question in the questionnaire (Yij), and the algebraic sum of them, degree of the selected index from the respondent’s view has been measured (Diakoulaki et all, 1995). In this research, regression analysis was used to investigate the factors affecting the success of co-operative companies of poultry farming. In complying with regression, the degree of co-operatives’ success forms the dependent variable and the main research. Afterwards, at the same time, the effect of the field variables, and internal organizational variables in two dimensions – human, and managerial factors, using the method of Path Analysis testing and backward Regression was examined to determine the affect of success in the co-operatives.

Discussion & Results In this chapter, first the dependent variable (degree of success in co-operative companies) is explained. Next, the results obtained from the situation of independent variables was described and reviewed. In conclusion, the relation between the independent variables and the dependent variable by using path analysis test was discussed and examined. In the beginning of this research, the level of co-operatives’ success in reaching their charter objectives as of the dependent variable, in five dimensions – providing production supplies for the members, market

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regulation, offering services in three consulting areas – specialization, economical and training through members and managers was evaluated. The obtained results are shown in Table 2.

Table 2) Evaluating the Services Presented to Members by the agricultural cooperatives

Providing production supplies

Training

Economic

Market

services

regulation

Consultancy

 

No

Per

No

Per

No

Per

No

Per

No

Per

Poor/Very poor

115

66.5

126

72.8

129

74.6

145

83.8

145

83.8

Fair

49

28.3

34

19.7

36

20.8

20

11.6

22

12.7

Good/Excellent

9

5.2

13

7.5

8

4.6

18

4.6

6

3.5

Total Compare means test

173

a

173

b

173

c

173

d

173

d

According to the given data in Table 2, the majority of the members and managers have stated that the co-operatives’ performance in the above-mentioned fields have a very high degree of weakness, and only a nominal percentage of the research participants evaluated the co-operatives’ performance as being good or very good. The test results of the mean comparison indicates that mostly in these co-operatives, they have paid attention to providing production supplies to the members, and their performance in the areas of offering economical, training, and specialized consulting services, and also market regulation has been evaluated as being quite low. All together, the above-mentioned concepts, the degree of co- operative success of measured. The obtained results in Table 3 are as follows:

Table 3) Evaluating the amount of Success of Poultry Agricultural Cooperatives

Members

Managers

Total

Level of Success

No

Per

No

Per

No

Per

Low/Very low Moderate High & Very High

125

87.4

18

60

143

82.7

17

11.9

8

26.7

25

14.4

1

.7

4

13.3

5

2.9

Total Compare means test

143

100

30

100

173

100

 

70.52

62.20

ns

Based on the data from Table 3, approximately 83% of the members and managers have assessed the success of the co-operatives in reaching the objectives set in the charter as being low or very low. All together, the poultry farming co-operatives in the Province of Isfahan have not had much success in reaching their objectives. The mean comparison test indicates that there is no significant difference between the opinion of the members and the managers. After measuring the degree of co-operatives’ success, the factors affecting the dependent variable was examined and assessed. In continuation, first we examined the condition of each of the variables in co- operatives. Next, the degree of their impacts on the success of co-operatives was discussed. Table 4 evaluates the independent variables in the research and their mean comparison from the views of the members and the managers of the co-operative companies of poultry farming in the Province of Isfahan.

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Table 4) Frequency Distribution of the Independent Variables

Members Managers

Total

Compare means test

Major Concepts

Evaluation

 
 
 

No

Per

No

Per

No

Per

Members

Managers

Understanding

None

69

62.2

17

56.7

106

61.3

cooperative

Poor

48

33.6

9

30

57

32.9

85.68

93.28

ns

principles

Mediocre

6

4.2

4

13.3

10

5.8

Member participation in the cooperative affairs

Low or Very Low Mediocre High & Very High

14

9.8

5

16.7

19

11

96

67.1

11

36.7

107

61.8

82.76

107.22

**

33

23.1

14

46.6

47

27.2

 

Low or Very Low Moderate High & Very High

25

17.5

2

6.7

27

15.6

manager's expertise

68

47.5

18

60

86

49.7

99.87

25.67

***

50

35

10

33.3

60

34.7

 

Poor or Very Poor Moderate High & Very High

14

9.8

*

*

14

9.8

Interpersonal Skills of Managers *

34

23.8

*

*

34

23.8

-

-

95

66.4

*

*

95

66.4

 

Elementary & Guidance School 65 45.5 12

40

77

44.5

Education

High School & Diploma

51

35.7

12

40

63

36.4

77.92

86.23

ns

BS & MS & Upper Degrees 27

18.8

6

20

33

19.1

Training

No training received Training received

49

34.3

15

50

64

37

92.53

60.65

***

94

65.7

15

50

109

63

 

Poor or Very Poor Fair High & Very High

11

11.7

0

0

11

10.1

Training Quality

32

34

5

33.3

37

33.9

88.43

79.93

ns

51

54.3

10

66.7

61

56

ns , **, ***, in sequence are non-significant, and significant in scale of 1 and 5 percent

based on the data shown in Table 4 in total, 61.3% of the members and managers had no understanding of the cooperative concept. The mean comparison test indicated that there was no significant difference in the degree of understanding of the cooperative concept among the members and the managers. Overall, the level of members’ participation in co-operative affairs, and managers’ expertise were assessed as being average. Managers in comparison with the members, assessed the level of members’ participation in co-operative affairs much higher than the actual members, and they assessed their own level of expertise as much lower. This difference in sequence is significant since it has a 95% level of reliability. The reason for this result is that the interpersonal skills of managers is more related with specific attitude, humane, and values of the managers, and under this circumstance, a person in a self- evaluation can struggle with many obstacles and probably some leniencies. This issue was only examined from the members’ view. Based on the research results, overall, the managers evaluated in this dimension had a high level of interpersonal skills. The mean comparison test results indicated that the level of managers’ interpersonal skills has been evaluated as being more than their level of expertise. This difference with a 99% level of reliability is significant.

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The members and managers’ level of education in the co-operative companies was also examined. The research results indicate that overall the poultry farmers who require a great deal of specialization in their field of activities did not have higher level of education. 40% of these managers had elementary level of education, and 80% of them had less than high school diploma. In addition to examining their level of education, the trainings that were offered to these individuals were also evaluated in this study. The obtained results indicated that, overall, 37% of the members and managers did not receive any kind of training. The managers who were directing and were in charge of the co-operatives, in comparison with the members, received less training. This difference with a 99% level of reliability is meaningful. Also, the quality of the offered trainings from the point of view of the trainees was assessed. The obtained findings indicated that the trainings were somewhat acceptable. Other factors effective in co-operatives’ success were the efficiency of these factors for the members, managers, and other organizations and the community. The efficiency of the co- operatives for each of the above-mentioned cases was assessed by the respondents.

Table 5) Frequency Distribution of Profitability for members, managers and other organizations

Members

Managers

Organizations

Profitability for:

Num

Per

Num

Per

Num

Per

Low or Very Low Moderate High & Very High

8

4.6

4

2.3

6

3.5

31

17.9

35

20.2

36

20.8

134

77.5

134

77.5

131

75.7

Total

173

100

173

100

173

100

The research results exhibited in Table 5 indicates that, overall, the members and also the managers evaluated the efficiency of these co-operatives for themselves, other organizations and communities in a positive manner. They also believed the existence and continuation of the co-operatives, in some way, as being beneficial and necessary. Table 5 evaluates the efficiency of the poultry farming co-operatives for the members, managers, and organizations.

Path Analysis

In order to examine the affect of the independent variables on the level of success of the co-operative companies (dependent variable), the Path Analysis method, and Regression with several variables technique was used. In this way, the independent variables which could have had an effect on the dependent variable were put into the model and their relation on the level of success of the co-operatives was measured. In later stages, the relation of each of the independent mediator variables with other factors was examined in order to measure the direct and indirect effect of these variables. The obtained results in Table 6 have been provided in detail.

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Table 6): Multivariable regression for understanding the effective factors in major concepts and the included mediator in the equation.

Dependent

 

Model

B

Std. Error

Beta

t

Variable

 
 

cooperatives

Profitability

for

2.057

.738

.331

2.787 ***

Organizations

Success

Understanding of cooperative principles 4.591 2.439 Member participation in the cooperative

.342

.195

.139

.147

*

1.883

1.751 *

affairs manager's expertise

 

.349

.184

.187

1.898 **

Training Quality

2.653

.502

.283

2.700 ***

Constant

-3.074

14.281

ـــ

.216 ns

 

df= 109

F= 6.347 *** R 2 = .301

R= .549

Member

 

manager's expertise

Managers’ interpersonal skills

 

***

participatio

n

in

the

 

.228

.649

.095

.259

.280

.290

2.414

2.504

***

cooperative

Constant

 

23.659

4.249

7.088 ***

affairs

 

ـــ

df=142

F=22.672 ***

R 2 =.245

R=.495

* , ** & *** Significant at 90%, 95% & 99% respectively

In table 6, the fisher statistical amount (F=6.374) at 99% level of reliability has been completely significant and indicates that there exists a real significance in relation between the entered independent variables in the equation and the dependent variable. The amount of regression correlation index is (R=0.549), which it expresses a relatively strong correlation between the collection of the independent variables and the dependent variable. The degree of the explained index (R 2 = 0.301) also explains the degree of average variance of the dependent variable through the entered independent variables in the model. In principle, in Social Science research, the index degree of R 2 because of the size of the factors affecting the system being low has made recognizing and explaining all the factors in a research quite difficult (2000, Sarmad). In addition, the entered independent variables in the model had a positive affect on the level of success of co-operative companies. The test results in Table 6 indicates that the level of co-operatives’ success is dependent on the efficiency of the co-operatives in regard to the external organizational factors, the training quality, managers’ expertise, members’ participation in cooperative affairs and their understanding of the cooperative principles, and also managers’ interpersonal skills with a positive index affect the level of members’ participation. After evaluating the effect of the mediator and independent concepts on the level of the co-operatives’ success, based on the theoretical research model, the diagram for the direction of the research was designed. Below, the index is shown.

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Understanding of cooperative principles

Training Quality

Success
Success
of cooperative principles Training Quality Success manager's expertise Member’ participation in
of cooperative principles Training Quality Success manager's expertise Member’ participation in

manager's expertise

Member’ participation in cooperative affairs

Managers’ interpersonal skills

cooperatives Profitability for Organizations

Figure 1. Diagram for path analyzing the relationship

For evaluating the degree of effect of each variable on the success of the co-operatives, the direct and indirect effect of each factor was examined separately. The obtained results have been exhibited in Table 7.

Table 7) Extent of direct & Indirect Effects of Independent Variables on Dependent Variable

Variable

Direct

Effects

Indirect Effects

Total

Understanding of cooperative principles Member’ participation in cooperative affairs

manager's expertise

Managers’ interpersonal skills

cooperatives

Profitability

for

Organizations

Training Quality

.139

.139

.147

.147

.187

.280 * .147 = .041

.228

.290 * .147 = .043

.043

.331

.331

.287

.287

According to the data in Table 7, the efficiency of the co-operatives based on external organizational factors, training quality, manager's expertise consecutively with effect indices of 0.331, 0.287, 0.228 had the most influence on the level of success of the co-operatives. Overall, the findings of this research can be summarized as follows:

The co-operative companies of poultry farming in the Province of Isfahan have not had much success in reaching their performance goals.

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This research achievement corresponded with the previous research findings by Safari Shali, Aghajani, Sar Sakhti Erqui, and Darvishenia. The co-operative members and managers have very little understanding of cooperative principles and objectives. This factor with index 0.139 has a positive effect on the success of the co-operatives. The members’ participation in co-operative affairs has been assessed as being average. This factor with index 0.147 had a direct effect on the success of the co- operatives. The results of the Path Analysis indicate that the members’ participation, and the managers’ interpersonal skills and expertise have a close correlation. The interpersonal skills of the selected managers have been evaluated as being higher than their expertise. The results of the Path Analysis indicated that the managers’ expertise with index 0.228 and the managers’ interpersonal skills with index 0.043 had a positive effect on the success of the co- operatives. The members’ educational level was assessed as being average, which for the activities required in this field is considered unsuitable. Also, 34% of the members and 50% of the managers had not received any kind of training. The results of the Path Analysis show that the training quality with 0.287 will have a positive effect on the success of the co-operatives.

Suggestions The achievements obtained from this research allow us to provide the following suggestions which can increase the success in poultry farming co-operative companies in the Province of Isfahan:

Recognizing that the level of quality of work force in the co-operatives of poultry farming is quite low, in spite the required expertise in raising poultry, it is essential to plan for long-term strategies in order to improve the quality of the work force. In order to help the poultry farmers, we need to offer constant training suitable for their needs.

The success of co-operatives is in the hand of the managers’ expertise. In our research, it became apparent that the co-operative managers did not have the essential interpersonal skills and expertise to create successful co-operatives. Thus, it is essential to train the managers in order to have successful co- operatives.

Attracting and encouraging the members’ participation in decision-making in regard to co-operative affairs will definitely benefit these co-operatives. It is essential to use suitable techniques in order to increase the level of members’ participation in co-operatives. It is evident that to create awareness among the members in order to believe in the philosophy and power (strength) of cooperation can be achieved through formal, informal or group training.

Since it is confirmed that the members’ participation is really in the hands of the expert managers; therefore in order to increase the level of members’ participation in the co-operatives, it is also necessary to teach the co-operative managers about the management participation techniques in order to obtain the members’ cooperation in reaching the co-operatives’ objectives.

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