Academic journal article Journal of the International Academy for Case Studies

Cooperative Guatemala, LLC: "An Examination of a Guatemalan Cooperative's Strategic development".(Instructor's Note)

Academic journal article Journal of the International Academy for Case Studies

Cooperative Guatemala, LLC: "An Examination of a Guatemalan Cooperative's Strategic development".(Instructor's Note)

Article excerpt

CASE DESCRIPTION

The primary subject matter of this case concerns the development of strategy for confronting barriers to growth facing a small fishing Cooperative in rural Guatemala. The core issues include coming up with ways to evaluate past performance and to evaluate future options. The backdrop for these issues consists of identifying competitive advantages through diversification into identified new businesses. While this case is based on an actual, real set of circumstances, people and organizations; specific names of people, towns and the Cooperatives have been changed for proprietary reasons.

The case lends itself to student project assignments with respect to developing a strategy for "Cooperative Guatemala". Proposed solutions should follow for determining which ventures to accept with particular attention paid to the cultural implications. Furthermore, students should determine the viability of entering various markets based on incomplete information and the lack of-full-time general management as identified in the case.

The case has a difficulty level appropriate for a senior course at the undergraduate level or at the graduate level. The case is designated to be taught in 1.5 class hours and is expected to require 2-3 hours of outside preparation by students.

CASE SYNOPSIS

This case explores the establishment and growth of homogenous Cooperatives in a stunted market and some challenges facing diversification of Cooperatives in rural Guatemala. Specific concerns of this case center on the development of strategy for confronting barriers to growth facing a small fishing Cooperative in rural Guatemala, with the added challenges of both strategic and operational decisions being determined solely by the Cooperative's board of directors. The cooperative faces some significant challenges including overcoming lack of education, culturally related decision-making stigmas, and poor organizational structure. These challenges fall within the context of attempting to find competitive advantages through diversification into identified new businesses. Stemming from a search for assistance, the Cooperative eventually was assigned a US Peace Corps volunteer, the viewpoint from whom this case was developed, to assist the Cooperative in providing business administration skills, such as strategy development along with financial and operational control mechanisms, and help improve profitability. A major task of the case is to develop a framework within which the Cooperative can evaluate business opportunities it should pursue.

INSTRUCTORS' NOTES

Discussion Questions

1. What major problems can you identify (internal and external) that have influenced the Cooperative's current economic position and strategy? Would you characterize their position as weak or strong? Defend your position.

Cooperative Guatemala is a real cooperative that is presently facing these and other issues regarding the growth and sustainability of their businesses. During the years from December 2004 to November 2006, the lead author was intimately involved in helping the Cooperative better understand its competitive position and define goals for strategic planning. The ongoing struggles within management and in the community are not uncommon among cooperatives in Guatemala. The cooperative movement has been used as a business model with varying levels of success for nearly thirty years across many industries with much more failure than success. The majority of the cooperatives have been formed by political parties throwing money at worker groups who were then left to fend for themselves.

Internally, Cooperative Guatemala is restricted in strategic ability due to the lack of formal training and low levels of education among its members. Decisions are made intuitively and draw from historic reference and experience. Rarely are decisions based on an actual plan designed to meet specific criteria or achieve set goals/objectives. …

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