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Module 2 - Understanding women's cooperative businesses

What you will learn in this module

Meaning of business and types of business
Identifying performance indicators of successful women's cooperative businesses
Understanding a business through the MAIR (motivation; ability; idea resources) model.[1]
Understanding women's cooperative businesses


Session 1

Definition & classification of business

45 min

Session 2

Understand business through the MAIR model

2 hours

Session 3

Indicators of successful women's cooperative businesses

2 hours

Session 4

Understand women's cooperative businesses

1 hour 30 min

Session 1 - Definition and classification of business

- Activity
- People
- Money
- Transfer
- Exchange
- Marketing
- Management
- Purchasing
- Large quantity
- Investment
- Income minus Expenses = Profit

Handout 1: Definition and classification of business

A business involves making an investment or undertaking an activity (manufacturing and selling a product, providing service, etc.) with the aim of earning a profit. When the income is more than the expenditure, the business makes a profit. When the expenditure is greater than the income, it makes a loss. It is necessary to ensure that the cost or expenditure is less than the income i.e. sales money, for the business to be sustainable.

A business is classified into three types according to the nature of the activity:

Manufacturing: This involves the process of production. Examples: making baskets, woodcarvings, fish sauce, textile-weaving, etc.

Trading or selling: Trading businesses involve only selling. Examples: trading in clothes, readymade shirts, selling provisions, etc.

Service: This involves providing and charging users for services. Examples: a telephone booth, beauty parlour, traditional Thai massage, hairdresser, etc.

Group business: This involves one or more of the businesses classified above. Many groups are engaged in trading as well as manufacturing. Some groups make one product and trade in another. Example: a group making herbal sweets also sells items made from water hyacinth by another group.

Session 2 - Understand business through the MAIR model

Ask if any of the participants has started or run a business. Then ask these participants to list examples of successful and unsuccessful businesses on the board under "successful" and "unsuccessful" business.

The MAIR model




Prior experience
Earlier learning
Knowledge of business management

I(dea with market)


Product is good
Demand for product



Successful business:
Sweets from fruit

Unsuccessful business:
Sugar palm sweets

Successful business:
Sal paper products

Unsuccessful business:
Crispy pork

- The business is successful with all four MAIR elements.
- The business group also has long-term strategies both at the management and production levels. The group has demonstrated its motivation through innovative methods of obtaining the raw material from different sources.

- The women's business group had only two MAIR business elements: a marketable idea and the ability and experience to make the product; they neither had the motivation and determination nor enough raw material.

- Even though the women had the production ability and experience, they could not market their product by convincing their customers about the raw material they were using (sugar palm).

Handout 1: Elements of business

The following four basic elements are required for a business as described by the MAIR model:

The MAIR model can be depicted as a rice house with each pillar representing a particular business aspect

If any of the pillars were to break, the house would fall. Likewise, all the four aspects described above have to be carefully explored and understood before an idea can take shape into a business.

The MAIR model can be used by the entrepreneur to assess a business before starting it or at any stage thereafter, using the questions given below:

Motivation and determination

Ability and experience

Idea with market

Resources needed and their availability

Physical requirements

- Premises
- Machinery
- Equipment
- Stock of raw material
- Employees that the group may need

Financial requirements

The MAIR model of understanding business

The MAIR model must take into account two additional factors, namely organizational management and business planning, for the activity to be successful.

Organizational management

All legal and organizational requirements must be understood and addressed before starting a business. The following checklist will be useful:

Business planning

A business plan must be prepared at the initial stage of starting an enterprise. We do this in our day-to-day lives. For example, before buying a two-wheeler worth 20 000 Baht, one would plan in advance which model to buy, depending upon the budget or money available.

When large amounts of money are involved, and the success of a business is at stake, it is definitely worthwhile investing time in business planning. Preparing a business plan is the most important step before starting any enterprise.

Handout 2: Analysis of case studies using MAIR model

Case study 1: Sal paper manufacture

The Ban Chumpol Women's Cooperative Group, set up in 1999 in Phitsanulok province has 32 active members who are skilled in making sal paper items. Initially, the women sold only in local markets, but with assistance provided by the CPD, they were later able to market their production in Bangkok and other provinces.

They use raw material from the sal tree. However, in anticipation of greater demand in future, the women are exploring how to use raw material from the banana tree, which is available in abundance.

In the early stages, the group lacked management and accountancy skills, but acquired these after being trained by the CPD. Now, they manage business production and accounts competently, earning profits of about 120 000 Baht in 2002. As a long-term strategy, the group wants to grow the sal trees themselves in order to ensure a timely supply of raw material at competitive rates. The women also plan to use their profits to buy machinery to increase production and, thereby, their income.

One of their business strengths is that their production is made fully with environment-friendly sal. This has enabled the women's group to sell their products not only in Thailand but also to export to the United States, Philippines and Japan where such products are highly valued.

Analyse the case using the MAIR model and elaborate the reasons for its success/failure.

Case study 2: Sweets made with sugar palm

This women's cooperative group started with 100 members making black and white coloured sweets from sugar palm. They learnt the skill from their family members.

Initially, the women were able to sell whatever they produced in the local market. But later, customers were unwilling to pay the price charged because they thought the sweets were made with sugar cane and not with sugar palm. Lacking a quality certificate from the government, the group was unable to convince customers that they were making quality sweets with sugar palm. As a result, their sales fell, stocks piled up and the group found itself without any working capital.

The group now has only 19 members. Obtaining sugar palm is also a problem because of its seasonal availability and price fluctuation. Sugar palm is in great demand for making alcohol. Realizing that the business was not profitable, most members of the group lost interest and dropped out which, in turn, further reduced production and quality.

Analyse the reasons for failure.

Case study 3: Determination and motivation revive a failing business

Somjit Songchona is the leader of the 10-year old Nangao Co-operative Women's Group. At the time of its inception, the chairperson declared she would make a personal donation and obtain a grant from the government. This motivated the women to join.

Beginning with 30 women, the group had to start with a manufacturing activity in order to qualify for the grant. They chose to make fruit-based sweets using different fruits, especially mangoes. The business idea was selected because mangoes were available in bulk and quite cheap in season. The chairperson's donation of about 100 000 Baht was used to construct a work shed.

The group wanted to process the mangoes to add value and make a profit, but did not know how to do this. Moreover, the women had no business experience.

Trained by a government officer to make a delicacy, locally known as 'fruit in syrup', the women's group made a first lot of 80 kg of this sweet. The volume was small enough to be sold fully within their village and give the group a profit. This motivated them to put together more capital and produce a larger volume of about three tonnes.

However, failure in following the production process properly spoilt about three tonnes of the product during manufacture. The women lost a lot of money and also the motivation and interest to continue in the business. As a result, 20 women dropped out. The government officer who had trained the group could not find the reason for the product being spoiled.

The leader of the group then visited another group making the same product where she learned that the porcelain jars used by them should be replaced with plastic jars treated with chemicals. On her return, the leader replaced the thirty porcelain jars with plastic jars at an extra investment of 30 000 Baht at 3 000 Baht per jar. The leader had to make a personal investment in this because the members were not interested in spending any more in the business. She did this without informing her family members because she was scared they would not let her put more money in a losing business.

The business then slowly started recovering and showing profits. The group leader later had the opportunity to attend a seven-day training programme on making fruit sweets at the Agricultural University. This helped to improve the quality and packaging of the group's product. Gaining confidence about the quality of their product, the group were able to extend their sales both within and beyond the province. They have now become a model for other groups who visit them to learn production and marketing techniques.

When asked what made her try again and again and eventually be successful, the group leader replied that she personally felt committed to the activity and did not want to abandon it without trying to achieve positive results. She also felt obliged to make good use of the money donated by the chairperson because it was given with good intentions and expectations.

Analyse the case study and write down what you have learned.

Session 3 - Indicators of successful women's cooperative businesses

Handout 1: Indicators of successful women's cooperative business


A group's business success may be assessed using the following indicators:

- Volume of sales
- Regularity of sales
- Profit per member
- Quality of product
- Marketability of product
- Returns on investment

It is important to see if there has been growth in sales and profits over the past three to five years. Sustained growth is an important indicator of the success of a business. If the business has remained static and not grown in any way, there is a chance that it is losing out in the market and needs to be examined carefully.

Cooperative business management

The first and foremost indicator of a successful cooperative business is a common purpose. To asses this, it is important to check if group is able to clearly articulate its vision. These should include clear statements of product/service and the business strategy. It is useful to see whether the group has used the tool of business planning. If this has been used, then it is easy to carry out periodical monitoring and adjustments as necessary. Thus clear articulation of vision and use of business planning are important indicators for assessing a group's success.

In a women's cooperative group business, the nature of cooperation is the key to its success. It is important to maintain regularity of group procedures (meetings, attendance at meetings, compliance with rules and regulations).

It is even more important to see whether the following criteria are fulfilling or not:

- Cooperation among group members
- Sharing of work and responsibility
- Sharing of information
- Maintenance of books/accounts
- Sharing of accounts/information with members (transparency)
- Team spirit: interaction among group members with common purpose
- Business, group management and networking ability in leader

Social factors

Family and community support directly impact on the group's success. Many cooperative women's groups engage in social and religious ceremonies and celebrations. While this may bring recognition from the community, it can also be a drain on the group's finances. It is important for the group to give priority to the need for investing in business expansion.


A group that has good contacts with other women's groups, government officers and local business, finds it easier to sustain and enlarge its business. A group with the ability to form partnerships for marketing, product information, technologies etc. is in a better position to develop its business.

Session 4 - Understanding women's cooperative businesses

Handout 1: Definition, values and principles of cooperatives

Definition of a cooperative

A cooperative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.

Cooperative values

Cooperatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, cooperative members believe in the ethical values of honesty, openness, social responsibility and caring for others.

The principles of cooperatives

Voluntary and open membership

Cooperatives are voluntary organizations open to all persons, aiming at maximizing the participation of members in their services with a clear understanding about the responsibilities of its membership in cooperative development without gender, social, racial, political or religious discrimination.

Democratic member control

Cooperatives are democratic organizations controlled by their members who participate actively in setting policies and making decisions. The men and women who serve as elected representatives are accountable to the other members. In primary cooperatives, members have equal voting rights (one member, one vote). Cooperatives at other levels are also organized democratically.

Economic participation of members

Members contribute equitably to, and democratically control, the capital of their cooperative. They usually receive limited compensation, if any, on capital as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their cooperatives, benefiting members in proportion to their transactions with the cooperative and supporting other activities approved by the membership.

Autonomy and independence

Cooperatives are autonomous self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy.

Education, training and information

Cooperatives provide education and training for their members, elected representatives, managers and employees, so they can contribute effectively to the development of their cooperative. They also inform the general public, particularly opinion leaders about the nature and benefits of cooperation.

Cooperation among cooperatives

Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.

Concern for cooperatives

Cooperatives work for the sustainable development of their communities through policies approved by their members.

Source: FAO, 1998, A manual for trainers on agricultural cooperative development (pages. 5 & 6). Rome, Food and Agriculture Organization of the United Nations.

Handout 2: Case study of a women's cooperative business

The Khao Yoi Cooperative Women's Group in Petchburi makes rice noodles. It was registered with 25 other women by the wife of the chief district officer Mr Thor when she learned about a government scheme to provide 90 000 Baht to start-up cooperative women's groups.

Mrs Thor offered the group the use of a large, covered shed in the front of her house to make the noodles. The government grant was credited to the account of the group in the cooperative. Mrs. Thor spent 30 000 Baht to get a rice noodle machine and spent another 60 000 Baht to repair the roof of the shed so that the noodles would not get spoilt during packaging.

When a CPD officer visited the group, the machine was idle. Mrs. Thor informed the officer that there were no orders and that she called the women to make the noodles as and when she received orders. However, the orders are usually small and only seven to eight women are able to find work. The machine stays idle for many days at a time when there are no orders.

As the members of the cooperative group cannot find continuous employment, Mrs. Thor wishes to apply for another CPD grant to make banana chips. The government has offered to finance the purchase of a drier by the group, which Mrs Thor intends to place in her yard. She says that this will enable her to continue with her efforts to engage rural women in productive work.

Analyse the case study. Is this a good cooperative group business? What should this group do to improve its business? Is this group operated along cooperative lines?

Handout 3: Information on cooperative women's group businesses in the Thai context

Common activities of women's groups

When women come together to form a cooperative group business, they are able to provide many services to their members. Typically, a group provides the following services:

By working together in groups, women can not only collectively manage and gain from a business, they can also access several benefits and subsidies from government and other support agencies.

Group businesses are complex and often combine more than one of the activities listed below:

- savings
- credit
- purchase and sale of raw material
- sharing of machines for production
- storage of produce
- purchase and sale of finished product
- sharing of office space for stocking, marketing and administration
- sharing of skilled personnel for common support services, like accounting

Are these groups cooperative businesses?

These groups register themselves with cooperatives to get government assistance in the form of financial grants for buildings and equipment. They also get training and marketing support. However, they are still largely dependent on the government and need to grow into vibrant and independent group businesses. Often, the principles and practices of cooperatives are not understood in these groups to become viable cooperative businesses; nor do they acquire the characteristics of their parent cooperatives.

Therefore it is important to provide cooperative members education in combination with business planning and marketing to ensure that women's groups in the cooperative sector are well managed.

What you have learnt in this module

When an investment is made or an activity is undertaken with the intention of earning a profit, it is called a business.

There are three types of businesses (manufacturing, service and trading). Some of these may be composite businesses.

The success of a business is measured with the help of multi- dimensional sets of indicators. These are classified as business, cooperation, social, impact and networking indicators.

Cooperative women's groups should fully integrate the principles of cooperation.

A business can be analysed using the MAIR model; this helps in identifying the strengths and weakness of the business, working on the weak areas and moving towards success.

[1] Source: Kevin Kane and the staff of Tototo Home Industries, 1992

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