Modelling the Impact of Strategic Planning, Structural Capital, Relational Capital, Members’ Participation, Governance Practices and Human Capital Development on Cooperatives’ Performance

In Malaysia, cooperatives was first introduced in 1922 to settle the problems of rural farmer being exploited and to overcome the financial problems among the government servants. Since then, the cooperative society plays a significant role towards the economic development in Malaysia and need to accelerate its performance in order to help its members. Despite the efforts to improve the cooperatives’ performance, there are issues regarding its weaknesses, especially in management, financial, and members’ participation. Thus, this study aims to examine the impact of strategic planning, structural and relational capital, members’ participation, governance practices and human capital development on cooperatives’ performance and to develop the model of cooperatives’ performance. Questionnaires constructed are distributed among 72 cooperatives board members listed under the 100 best cooperatives in Malaysia for the year 2011. By using Pearson's correlation and Multiple Regression Analysis, this study found that the relational capital plays a vital role in exerting a positive influence on the cooperatives’ performance. It is suggested that the cooperatives should always be involved in all the activities organized by the Suruhanjaya Koperasi Malaysia so that it can promote the product and services provided to the society as a whole. This would improve the networking of the cooperatives with the government, suppliers, and customers, which indirectly would give a positive influence on its performance. This finding will provide guidance for the cooperative to improve its shortcomings performance towards realizing the National Cooperative Policy 2011-2020.