Organisational Constraints in Rural Development: Causes of Different Performance among Ugandan Cooperatives

Abstract: African cooperatives are in the process to adapt to a liberalised economy where they are expected to function as independent business entities. So is also the case in Uganda where the competition on the free market puts pressure on cooperative performance. This thesis asks the question why some cooperatives fail in this context while others succeed and tries to find the answer in the organisational features of cooperatives. A comparative study of the cooperatives KAME and KAFAME has been done in order to answer this question. The two cooperatives have been selected as they encompass many similar internal and external attributes but perform differently which makes them two interesting cases to compare. The results show that leadership skills and channels for member participation are the most important organisational factors explaining differences in performance. It is also shown that different organisational features are a product of the cooperatives’ founding process where external actors promoted ownership and capacity building to a higher extent in KAFAME than KAME. The thesis concludes that the surviving cooperatives are those that are initiated with a high involvement of members themselves and where the organisational structure and leadership skills reflect this process.