DETERMINANTS OF MEMBERS’ LOYALTY IN
COOPERATIVE HOUSING SOCIETIES IN LAHORE
Munib ur Rehman, Farrukh
Ahmad Awan
Cooperatives
Department of Punjab, Pakistan
Email: [email protected]
|
KEYWORDS Members’ loyalty; Housing Cooperatives; Thematic analysis; Lahore |
ABSTRACT This is going to be first ever
study that aims to explore phenomenon of loyalty of members in Cooperatives
in Pakistan. Cooperatives are unique enterprises in terms of their business
model, working on the seven principles of Cooperatives. Members’
participation is the significant element in the functioning of a Cooperatives
and this model is getting attention in the emerging
economies around the globe. In Pakistan, especially in the Province of the
Punjab, 33000+ Cooperative organizations, 255 out of which are Cooperative
Housing Societies, play a vital role in different areas of life. In order to
ascertain the inclination of the members, who are also consumers in
management terms, towards cooperatives, 03 Cooperative Housing Coops i.e. The
Cooperative Model Town Society Ltd. Lahore, The State Enterprise Cooperative
Housing Society Ltd. Lahore and PASCO Employees Cooperative Housing Society
Ltd. Lahore were chosen as research site.
Four Proposition i.e Satisfaction, Perceived value, Response to
change, and trust were formed and were looked
into so as to assess their role on loyalty. Hence,
a qualitative approach was adopted.
Thematic Analysis was carried out on the data/information retrieved through
interviews. It was observed that that perceived value,
resistance to change and
trust have been treated as important towards members’ loyalty. However, proposition of satisfaction was given little
significance. This study gives a future direction of the research in
Cooperatives besides providing an insight into managerial implications of the
Cooperative Organizations as service providers as well as of cooperative
members. |
INTRODUCTION
While
defining Cooperatives, we can segmentize it into four catchwords. First, these
are formed by the people having common need or problem (Mogos Descotes & Pauwels-Delassus,
2015). Second, these
are organizations are formed freely by the members through contribution of
their assets. Thirdly, these organizations are governed democratically for
achieving the desired objectives equitably. And fourth, these are independent
enterprise promoted, owned, and controlled by the people to meet their needs.
Simply speaking, these are people’s organizations to exploit opportunities in
the economy to address their economic needs and obtain economic betterment.
The
International Co-operative Alliance (ICA) is a global federation of
co-operatives under UNO and it defines (ICA Report, 2018) a co-operative as
“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.”
Rosmimah
(2011)considers
that Cooperatives is a social enterprise that is formed and owned by a group
of individuals for the purpose
to meet their social
and economic benefits.
The definition of Cooperatives is supplemented as enunciated by (ICA Report, 2018) by a set of values and principles. These are in consonance
with ideas of the original founders of the co-operative movement in the
nineteenth century. The values of equity, equality, solidarity, democracy,
self-help, and self-responsibility are central to the purpose of a
co-operative and these values are put into practice through these seven
principles:
1)
Voluntary
and open membership.
2)
Democratic
member control.
3)
Member
economic participation.
4)
Autonomy
and independence
5)
Education,
training and information.
6)
Co-operation
among co-operatives.
7)
Concern
for community.
While
discussing the role of cooperatives in economic activity, Skumik (2002) observes
that Cooperatives develop a capacity among its members to solve their unlimited
problems within limited resources through self-help, pooling of resources and
democratic management under the slogan of “One for All and All for One”.
Chambo (2009) ascertains
that Cooperative organizations can be formed in any sector such as services,
industries, housing, agriculture, credit, farming, education, marketing and
supply and so on.
This study
will focus on Housing Cooperatives. Housing Cooperatives are formed to meet the
housing needs of its members and provide affordable shelter in economical way (Yakub et al., 2012). Besides
that, the entire setup of municipal services in a Housing Coop is run and
maintained by the organization through an elected Managing Committee with the
help of members’ contributions.
There are
many factors influencing the working and performance of a cooperative
organization as well as its ability to deliver the good to the members, as
maintained by Malaysian Cooperative Commission Report 2016, which says that the
competency and durability to remain relevant to the members is affected by
changes in Government Policies, liberalization, business environment and use of
ICT. This influence casts its affect to the members’ perception about the
cooperatives. In this context, Yacob (2023) identifies Satisfaction, trust, response to
change and value significant elements to secure members’ loyalty (Yusman et al., 2016).
The
Success of Cooperatives, as determined by Yang and Peterson (2004), is linked with
loyalty of its members i.e. their intent to remain with the Cooperatives as is
evident from past studies on customer loyalty, satisfaction and customer value.
The Cooperative
Movement in sub continent of India and Pakistan was initiated in 1904 and is
regulated through Cooperative Societies Act 1925 and Cooperative Rules 1927.
Cooperatives are a provincial subject under the Rules of Business of the
Government of Pakistan and each of the provinces has its own setup of the
Cooperatives. In Punjab, Cooperative Societies are regulated by the Registrar
Cooperatives and there are different organizational tiers upto levels of union
council in the province to organize and regulate the functioning of the system.
As of 31 Dec 2018, as per Punjab Cooperatives Annual Report 2018, there are
33643 Cooperative Societies of all kinds with seven million plus members. With
regard to Housing Cooperatives, The Model Town Cooperative Housing Society
Lahore was the first Cooperative Housing Society in the Sub Continent. The
Annual Report further indicates that there are 141 Cooperative Housing
Societies in Lahore and 106 CHSs out of them are functional and providing
shelter to the members with all possible amenities without any external help
from the Government Sector and meeting all their needs with the members’
contributions.
Like any
other organization, Cooperatives also need to keep on improving its performance
as per changing environment (Wanyama et al., 2009). Members’
Participation in the business of the society is highly significant towards the
performance, particularly in the Governance to long run the organization and to
ensure loyalty among the members. This gives rise to the notion or propositions
that Members’ Satisfaction, Trust, Response to Change and Value are critical to
secure members’ loyalty in the cooperative institutions to achieve their goals
and objectives (Wu & Wang, 2012).
Taking account of the above context, the current Study
was conducted, taking the qualitative approach, to analyze notion of loyalty in
terms of how it is influenced by Satisfaction, Perceived Value, Response to
Change and Trust among the Members of Cooperative Housing Societies in Lahore,
with the support of Literature, in a highly competitive situation where there
are many other ardent players like DHA, Private Real Estate Developers and
Development Authorities, and for the
study we have chosen three Cooperative Housing Societies which are:
1)
The Cooperative
Model Town Society Ltd. Lahore: The first ever Cooperative Housing
Society in Sub Continent, going to have centennial celebrations in 2021.
2)
The State
Enterprise Cooperative Housing Society Ltd. Lahore: A medium size
semi developed housing cooperatives situated at Multan Road with some amenities
of life. The society is more than 80% populated
3)
The PASSCO
Employees Cooperative Housing Ltd. Society. Organized by
employees of PASSCO; a federal government entity, situated at Canal Bank Road.
A small sized Cooperative with 290 members and the scheme is fully developed
and dwelled.
Framework developed in this study has been replicated from the work of
Taylor, Celuch and Goodwin (2004).
While members’ loyalty
is taken as the dependent
variables, satisfaction, perceived value, response to change, and trust are opted as the
independent variables (Yap et al., 2012). In light of the literature and the framework, following four propositions
are developed to address the research objectives:
P1. Members are satisfied from
a product or a service if their need is met conveniently that makes them loyal
to their Cooperatives. Hence, Members’
satisfaction is an important step to gain Members’ loyalty.
P2. Members / Consumers perceive various
benefits attached to a product/service. This leads them to remain within
Cooperatives.
P3. How do Members react to or respond to a
change is considered as significant step towards members’ loyalty.
P4. When We Build Trust, We Build Loyalty
RESEARCH METHOD
The
present study was carried out through Qualitative Approach. The Members of three selected Cooperative
Housing Societies of Lahore were taken as target population.. A non-probability purposive sampling technique
was utilized for collection of Data. Sample was made up of members and office
bearers of the Management (13 from each of the three societies) of the
population societies. Data was collected through semi structured in-depth
interviews for which a specific interview protocol was developed (Annex – A).
The interview protocol contained questions regarding propositions pertaining to
variables under investigation. The data so
collected was analyzed and interpreted through thematic analyses using Nvivo 10.
As suggested by Literature, viewed by Boyatzis 1998, thematic analysis is
method for identifying, analyzing and reporting patterns or themes within data.
It interprets various aspects of the research topic. This analysis helped us
understand as to how the members’ loyalty is influenced by Satisfaction,
Perceived Value, Response to Change and Trust. Majority of the interviewees
were not reluctant in expressing their views and this helped us a lot to make
proper inferences about our study.
RESULTS AND DISCUSSION
This was a
fascinating experience to explore the phenomenon of members’ loyalty in
Cooperatives, being the first one of its kind in this sector. This gave us
opportunity to test our propositions and enabled us to develop this groundwork
for Cooperatives.
Propositions
regarding members’ loyalty were tested through in-depth semi structured
interviews from the members of the 03 Housing Cooperatives of Lahore. One of
the Coop i.e. The Model Town Cooperative Housing Society Ltd. Lahore is about a
hundred years old and its continuation for a hundred years was not possible
without retention or loyalty (in term of management sciences) of the members.
So, in such scenario, inference can be made regarding members’ satisfaction,
perceived value, response to change and trust which yields the loyalty among
the members.
Although
we have already discussed the salient features of the Housing Coops (study
site) briefly in introduction section, however before analyzing the data
retrieved through interviews, it would be appropriate to discuss the
prominencies of them.
The Model
Town Cooperative Housing Society Ltd Lahore is a capacious housing scheme
providing an excellent living style with all amenities. The society is
superabundant with greenery resulting in healthy environment. Starting from 200
founder members under the presidentship of Sir Ganga Ram, it has now 5428+
members and constructed units. The society comprises of 1463 acres of
land. All its affairs are governed through
its registered byelaws. It is complete township and management is responsible
for all administrative and governance matters. There is going to be 3rd
or 4th generation of the members living in the society who are
members by virtue of original membership
The State
Enterprise Cooperative Housing Society Ltd, as elaborated in the introduction,
is a medium sized housing scheme with some amenities, having 2000+ members and
plots. It is a semi developed project and half of the scheme is dwelled. Like
MTS Lahore, the majority of its shareholders are original allottees. However,
some members joined this society by virtue of purchase of plots from original
allottee members.
PASSCO
Employees CHS is small housing society meant to cater the housing needs of
PASSCO. It is fully developed and dwelled. Maintenance operations of the
amenities are underway. It is facing, like adjacent societies, the problem of
trunk sewerage. And this issue is going to be resolved as the Government has
undertaken the project of laying trunk sewerage along the Canal Road to
facilitate all the concerned societies. Majority of its members are original
allottees and a few of them have joined this cooperative through purchase of
plots/houses.
While
conducting interviews at study site i.e 03 Cooperatives, we find a bit
deviation in opinion of the interviewees about their experience of joining,
living in and remaining with the Cooperatives. Some of the interviewees have
been part of organization’s management and contributed towards welfare of their
Coop and fellow members. Two of the interviewees from State Enterprise Society
were affectee members i.e. they were having some complaints about size of their
plots and were in struggle to get their issue redresses. Despite a minor
dissatisfaction, the interviewees, as whole, expressed their intent to prefer
the Cooperatives as compared to some other entity in real estate for different
grounds, as is exhibited from the analysis of the data.
Starting
from the Model Cooperative Housing Society Ltd. Lahore, the 13 interviews were
conducted in 04 days. Data so retrieved indicated divergent views of the
interviewees regarding, satisfaction, perceived value, response to change and
trust. 7 interviewees were members by virtue of inheritance that is their
ancestors joined Model Town Society as basic members and the property thus
owned was transferred to them. This way they had long experience of enjoying
the services offered by the Coop than other interviewees. While six
interviewees became member of the society by way of purchasing property in the
society. Their opinion about experience in Cooperatives was almost similar
except of a few individual issues. Taking the first proposition of Satisfaction
towards loyalty the respondents showed a bit dismal picture regarding services
provided by the society management. These services include maintenance, watch
& ward, security, redressal of complaints, responsiveness of the society
management towards sudden issues as well as but not limited to recreational
facilities. Since some high profile political figures are also residents of the
society and there are issues of free mobility in those peculiar areas due to
stringent security measures.
As a whole the society is worth living.
Much better than many other places of the city. My father purchased this property
measuring 4 Kanal in 1962 against a sum of Rupees 5000/00 which is now worth
100s millions. Over of period of hundred years, the society has seen many ebb
and flows and was successful in maintaining its prestigious place in the
planned urbanization sector. Members sometimes feel delayed response on part of
management regarding maintenance and development. But that might be due to non
cooperation on part of some members because society meets its financial needs
through receipt of dues and charges from the members. The delay on part of
members in payments causes the delay in development work. This delay is of
course annoying and creates dissatisfaction. Despite that, I have trust on
Cooperatives because I believe that it is doing for my economic betterment.
Financial Enhancement of my property is a solid proof of it. (Interviewee 1)
Cooperative
is in the field when there was no other significant player in the real estate
sector. Uniqueness of the Cooperatives is that it is working without any
commercial motif with a sole objective of economic betterment and capacity
building of the members. Whereas main motive of commercial enterprises is to
earn profit. This very fact makes the Cooperatives as a first choice for the
people to meet their housing needs. This very understanding gives the
Cooperatives a decisive edge upon other competitors like Private Housing
Schemes etc. Cooperatives offer a respectable living in much lower prices as
compared to others. This is the perceived value that is significant for the members
to remain within the Cooperatives. More importantly, members themselves are
responsible for timely completion and delivery of the project, so they being
shareholders and stakeholders take keen interest in growth of the cooperatives.
This inference was yielded out of views of the interviewees while responding to
relationship between Perceived Value and Loyalty. Members prefer Cooperatives
while comparing with what is being offered by other providers. The reasons
include but not limited to costs, services quality, duration of completion,
post completion operations and above all opportunity to be part of management
being shareholder. Although some real estate organizations like Bahria Town and
DHAs are doing a lot good but their first preference is to earn profit, though
they give extra luxurious living standards.
I am here in Cooperatives. I can go to
Bahria Town or to the schemes maintained by LDA etc. Though they have good
living standards but why I go there, when I can get same thing without any
organizational profit. I have no problem in schooling my children or availing
medical facilities or going for shopping. I am fully at ease in all above
terms. As far as living standard is concerned, Cooperatives can also have it or
better than that if members cooperate. (Interviewee 11)
When
exploring the third proposition i.e response to change, through the views of
the respondents, we got amazing inferences. Almost all the interviewees were
unanimous to say that improvement and enhancement in services and systems are
always welcome. But there was difference in opinion with regards to cost of
such enhancement or change in regulations. Like change in electoral mechanism,
levy of additional service charges, or any joint venture initiative for
financial gain of the society. For example, in recent past, a piece of land was
leased to some multinational to establish a METRO Store at link Model Town
Road. The initiative was extremely resisted by some elements. Even the society
had to face litigation and high level enquiries. But the initiative brought a
good permanent income for the society as well as placement opportunities for
the unemployed persons of area. Besides that It provided a great shopping
facility under one roof. Although the society got through all litigations on
the issue, but this resistance or response resulted in shattering the
confidence of foreign investment as well as was tantamount to depriving the
country of taxes. Similarly Commercialization Policy of the society is always a
favourite to criticize. Whenever a change is proposed in status and nature of a
property, a series of litigation is started. That is why since 2003 no worth
mentioning change in nature of any property was ever reported. This situation
leads us to deduce that members are very sensitive to sustain the township
status of their society and want to maintain it not as a commercial scheme full
of high rise commercial plazas but as worth living residential town. One of the
interviewee elaborated as under:
The Model Town is an elite housing scheme
with sufficient commercial areas. Establishing a Commercial Activity in
residential area is not justified in any term of law and morality. We do not
want to disturb our peace by allowing commercialization of residential
properties. So we oppose and will always keep on opposing conversion of
residential properties into commercial properties. (Interviewee 13)
Discussing
Trust, as supported by Literature, we find it as a strongest element in
sustaining the loyalty in Cooperatives. As our proposition says that we build
trust, we build loyalty; this comes true when we talk about Model Town. Trust
on the organization, Trust on safety of investment made by the members, trust,
or belief in other words, on collective benefits at the platform of
Cooperatives keep the members to retain within Cooperatives and above all this
is the trust that motivates the members to participate actively in the affairs
of the society and play their role in its uplift. While discussing the element
of Satisfaction, we found out that member might not be satisfied with services
because of quality but they appear to have trust on organizational strength in
terms of financial gain against their membership and property.
I find my property evaluated day by day. I
became member of this society by purchasing a house in end 90s. If moneytize
the current value of my property, it will be at least 100 times more than that
of at the time of purchase. I am not at loss if I dispose of my property right
now. So that is why I prefer Coops and do recommend it to others also. (Interviewee
12)
While analyzing the data retrieved from State
Enterprise CHS and PASSCO ECHS, we find more or less similar views of the
respondents. The interviewees from State Enterprise CHS give weightage to
satisfaction regarding services as the society is not fully dwelled and a lot
is required to be done in terms of Parks, proper approach road, etc. But they
were found hopeful that in near future these deficiencies will be overcome with
acceleration in dwelling and receipt from the members. Members were observed to
be more zealous in participating in society affairs. Though the society is less
developed as compared to adjacent Coops, however people believe that this is
due to non cooperation on part of defaulting members. Such members are
investors and are waiting for increase in prices to dispose their properties.
That is why they are reluctant to pay their dues and wish that perspective
buyer would make payment.
Since
Society is less developed, therefore any initiative to raise funds is strongly
resisted by the resident members who are regular in their payments. They are of
the view that instead of levying fine on the defaulters, regular payees are
being penalized.
Like Model
Town, the members of this society also have trust on Coops in terms of financial
gain as the prices of properties here have gone many times high from that of
their original price. And they find no way to show distrust on the Cooperatives
which provided shelter to them on no profit no loss basis.
PASSCO
ECHS a small society with fully dwelled and having all amenities like energy,
excellent road network, graveyard, worship place, gas water supply and internal
sewerage besides IT based security system, is found to be complacent in terms
of satisfaction, perceived value, response to change and trust leading to
remain consumer to the cooperatives. Construction of houses on all plots is a
good example to testify our propositions. Contrary to other two Coops, the
members of PASSCO ECHS were found to be positive while responding to any change.
This may be because of the fact that society delivered what it promised and
people here think any change leading to betterment in the existing systems.
With regard to trust we find unanimous opinion of the interviewees. They are
wishful to extend the society to another phase of the housing scheme. As
regards perception of value in cooperatives, they opined to have alternatives,
but none except cooperatives offer dwelling on no profit no loss basis. This
has no parallel in any other sector.
The analysis
of data so retrieved through interviews lead us to deduce that members prefer
cooperatives being it as unique members’ owned enterprise, on account of
satisfaction, perceived value, response to change and trust which are outcome
of the performance of Cooperative. More the Coop perform, greater will be the
loyalty. We also deduce that a particular perspective of members’ participation
in cooperatives and sense of ownership leads to develop Trust and satisfaction
and cause them to be remaining within Cooperatives, despite having alternatives
in other forms of planned urbanization.
The
analysis made thematically is depicted as under:
Figure 1. Summary of
Themes
Figure 2. Tree Map
Figure 3. Cluster Analyisis
Figure 4. Word Cloud (Themes Cloud)
CONCLUSION
It
is significant to translate the findings of our studies to use it in managerial
implications for the Cooperatives to utilize them in strengthening the
members-society ties not only for existing members but to attract new
membership. The members’ loyalty is dependent on society’s performance.
Therefore it is found imperative to recommend that Cooperative Management must
put more focus on enhancing perceived value, addressing response to change
adequately and enriching trust so as to ensure continuity of members’ loyalty
towards cooperatives. Satisfaction is important with a view to resident
members. But it might not be so stressing towards loyalty as compared to other
propositions, however it bears significance.
At
the end, in terms of magnitude, we feel that this study is limited
in several aspects
which lead to emphasize for the
need of future research to get more comprehensive results to be usable
for betterment of Cooperative System. Similarly the duration of membership is very helpful to
retrieve knowledge about members’ behavior to ascertain about the loyalty.
Finally we feel that in future researches, personal and situational factors may
be considered to obtain more detailed understanding on members’ loyalty towards
cooperatives.
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Copyright holders:
Munib ur Rehman, Farrukh Ahmad
Awan (2023)
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Devotion - Journal of Research and Community
Service
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