1. Of the specific aspects of this business sector
In Colombia, in the period between 1980 and 2000, the OFCC (Colombian Cooperative Financial Organizations) maintained rapid growth as business organizations. The transformation from small credit unions to large financial organizations was evident. This led to a metamorphosis of its organizational structure with the vicissitudes that result from it. There was no doubt the professionalization of organizational management and of the people who have integrated these organizations. This allowed them to climb positions of privilege in the financial sector and in the Colombian business sector itself.
In the decade of the 80s there is an organizational growth depending on the social base and the transformation of the environment in which they were circumscribed.
In some way there is a substantive rationality insofar as they maintained an organizational conception under cooperative assumptions that claimed solidarity values and principles. In the early 90s the country entered the era of internationalization of the economy and the financial sector as such stands as its guide. Organizational behaviors with different intensities are affected, based mainly on the new organizational theories arrived with the dawn of economic and financial globalization. In this context, in the OFCC there were growths based on themselves (within them) followed by conceptions of gigantism under instrumental logic where the means ended up being ends. The strength of these growths was tested in the last two years of the 1990s,when the Colombian financial crisis occurred.
Undoubtedly, in these processes there were many problems that concerned the social organizations to which the OFCC are circumscribed. Due to consubstantial solidarity values and identities, difficulties arose due to their links to the new conditions of economic opening. The obstacles were further deepened by trying to enforce their strategic goals and objectives. The object of research was then concerned with changes in organizational structures in their quest to keep inherent the social approaches that are characteristic of cooperative organizations. Being social organizations implies maintaining a related philosophy with aims and objectives focused on cooperation and solidarity. In this sense,The transformation of the organizational structure and the organizational approaches implemented with the organizational management must be in accordance with this foundation.
The problems addressed in the research work on the transformation of the organizational structure in its adaptation to the environment were manifested in: the formalization of the cooperative organization; in the organizational approaches of organization building, ignoring some values and principles of cooperation and solidarity; in the implementation of organizational management; in the interests and conflicts of relationships of authority, power and leadership; and in the changes to which the OFCC's organizational goals and objectives were subjected.
So the formulation of our research questions attempted to tentatively answer the statements of these problems. It started from conceiving that OFCCs are alternatives for social-economic development, despite being circumscribed in a market economy, and having an organizational conception that is inconsistent with its principles and values.
We also complemented the previous statement by proposing as a working hypothesis that the OFCC were characterized because the transformations of the organizational structures did not directly claim or correlate (they were not in accordance) with the inherent social character of these organizations.
I share the idea that the organizations of the Colombian Solidarity Sector, especially the SFCC, can become a starting point for the configuration and growth of new business organizational forms. This would facilitate the tendency to gain significant weight and lead participation in the designs of the national economy. This to the extent that their structures are designed or redesigned in accordance with cooperative purposes. With such organizational forms, they can be a concrete support and an economic base for strengthening humanistic and comprehensive conceptions of human fulfillment.
For the explanation of the reality studied, the reference framework (both the theoretical framework and the conceptual framework) was based on the conceptual basis of organization theory. In the theoretical framework, the contributions came mainly from authors with backgrounds in organizational issues, Charles Perrow; Francois Petit, Jeffrey Pfeffer; Richard H. Hall; Gareth Morgan; Jorge R. Etkin, Henry Mintzberg, and behind the inspiration of Max Weber's theory of rationality. For the conceptual framework, in addition to the concepts typical of the sociology of organizations, the conceptualization and recontextualization of concepts was used. These better facilitated the explanation of some realities of the research object in contexts of cooperative growth and development.
Organizational analyzes generally collect five variables that interrelate with one another in the organizational environment. These are the relationships of power, authority and leadership; the organizational structure; the aims and objectives; organizational culture; and technology. Due to the specifications of the objectives of the present investigation, it was decided to use the first three variables in the analysis. Also covering organizational culture and technology implied developing practically two additional chapters with the connotations that derived from it in terms of time and resources. On the other hand, matters related to organizational culture and technology can by themselves be considered a research topic.
In the theory of the organization two theoretical-methodological tendencies stand out. Studies that place greater emphasis on the structure and coordination aspects of the organization, whose object of analysis is the organization as a whole; and the authors who emphasize the aspects of interests, conflict and decisions, whose object of analysis focuses on conflicts. This investigation was oriented by the elements that make up the first aspect, without obviously leaving out some elements of the second aspect.
Focused on the previous clarification, the research visualized the organization as such, as a complex social unit that within it interacts with many interest groups that share some of the aims and objectives of the organization. The organization as a social entity is intentionally created to achieve certain objectives, through human work and material resources (equipment, machinery, physical facilities, etc.). OFCCs as organizational entities must be administered and have certain policies with hierarchical structure and positions arranged in units. The organization was also considered in a multiple and globalizing context. That is, the transformation of the structure was thought under the formal and informal organization, and its continuous adaptation to its changing environment;likewise with the different hierarchical levels, conflicts and organizational environments.
This implied orientations of the Weberian postulate of rationality. Rationality and organization were two important elements to approach this organizational study. It is difficult to understand organizational sociology independent of the concept of rationality. Therefore, this paradigm was the starting point of our organizational study.
Within the parameters of the analysis of the organizational structure in the OFCCs, rationality encompassed the formalization and bureaucratization of these organizations. This involved organizational designs and structures, and the construction of an administrative system through the division of labor and the coordination of activities. Consequently, organizational instances were formed, establishing themselves as power-generating sources that went beyond their organizational positions.
The sources and techniques for collecting information were confined to primary and secondary sources, and to survey-questionnaire and interview techniques. In the selection of the sources, the process of exploration, identification, collection, classification and processing of the information to work the critical analysis of the organizational structure in the OFCC, it was done taking into account the facilities of achievement and the means used to collect such information.
Within the primary sources, oral and written information was collected directly from the object of study. In the secondary sources we find a relative variety of written information, in addition to magazines and presses that were used to expand the pertinent information. In all this process, the existing experience in understanding the reality of the SFCC was started; in the contributions and experiences of other people familiar with the dynamics of this sector; in the information of descriptive documents with much significant importance as sources of information; in the institutional books that the organizations in our sample published, where they justify their births and business growth at given historical moments; in the annual reports,minutes and documents of the different OFCC conduction bodies; in the undergraduate theses (Sociologists, Business Administrators, Economists and Industrial Engineers) and postgraduate theses (Social Management, Administration and Finance, Solidarity Economy and Applied Economics) carried out towards the SFCC as units of analysis; in some doctoral theses (few for Colombia) whose research dealt with topics on social organizations in Latin America; and in published SFCC research mainly financed by the Colombian State and industry associations.Solidarity Economics and Applied Economics) carried out towards the SFCC as units of analysis; in some doctoral theses (few for Colombia) whose research dealt with topics on social organizations in Latin America; and in published SFCC research mainly financed by the Colombian State and industry associations.Solidarity Economics and Applied Economics) carried out towards the SFCC as units of analysis; in some doctoral theses (few for Colombia) whose research dealt with topics on social organizations in Latin America; and in published SFCC research mainly financed by the Colombian State and industry associations.
The survey-questionnaire techniques and the interviews were used in a representative population containing only people who were part of the different driving management instances. These were the strategic summit (general managers and members of the boards of directors); line of command (financial, commercial, administration, and branch / agency managers); technostructures (managers and / or department directors), and support staff (advisers). The survey-questionnaire with 50 questions was semi-structured in nature and designed for people who had a good level of information about the development and growth of their organizations (see Annex 3). The interviews were carried out with 50 interviewees (see annex 2).In any case, the interviews favored the people with the greatest influence on decision-making in their respective organizations. With the selection of the respondents, the procedural logic was reversed.
The research findings in general terms prove the hypothesis formulated. In their adaptation to the new conditions of the Colombian environment, the OFCC transformed their organizational structures without maintaining their own social focus that characterizes them as two-character organizations (the association and the business or business). The denaturation as social entities led them to consolidate business processes in fields where the SFTC had its fort. From this sense, the organizational references of cooperation and solidarity necessarily underwent changes.
Without ignoring the incidences of exogenous elements, the transformation of the organizational structure was linked to endogenous variables. A majority of the social group under study (administrators and leaders) appropriated and promoted an organizational approach that was finally applied. In this way, power relations and the hierarchical structure were affected with the evident conflicts that are generated from it.
Likewise, with the bureaucratic forms of organization assumed in the processes of transformation of the organizational structure, the OFCC emphasized the adaptation of the means to the ends. That is, they privileged the objectives of the business or business that was the medium, to the detriment of the social objectives of the association that ultimately is the purpose of these organizations. Bureaucratic rationality led them to seek efficiency that favored the deteriorating growth of organizational development. The advent of a formal / instrumental rationality of cooperative technocrats was evident.
The contributions of the investigation from the organizational perspective are manifested by the analytical way of approaching the object of study. The analysis is made from the double organizational characteristic of cooperative entities with democratic management, the association and the business or business. This led to the recognition of non-profit and an organizational conception of the social and local / regional. All in terms of a clear notion against organizational objectives and purposes, seeking to improve the quality of life of its associates and including increasing the environment to which they subscribe. OFCCs are first and foremost entities of a social nature rather than financial organizations themselves.In other words, in the research they were assumed as social organizations with economic-financial purposes, and not as has been the perennial tendency to locate them as economic-financial organizations with social purposes. Based on this foundation, there is no known study / investigation that undertook an analysis of growth and organizational development of these financial organizations based on these characteristics.
From the previous point of view then, the work carried out allows opening future lines of research in search of a better knowledge of the organizational work of these entities. The formulation and reformulation of the concepts that were developed motivated by the need for explanation allowed to a certain extent to assume this position. The study of other non-profit organizations belonging to the solidarity sector based on their cooperative purposes; the criteria for evaluating organizational management based on economic management, administration management and financial management in dual character organizations; cooperative government and its power relations vis-à-vis cooperative technocracy; the transformation of these organizations in terms of organizational growth and development;organizational development and its incidence at the local / regional level; contributions as an organization in their surroundings and environment; the efficiency, efficacy and effectiveness versus the demand, effort and emulation in the organizations of double character, are some examples that demonstrate the viability of the previous affirmation.
Likewise, it is also important to recognize that with the approach to this study, many of the variables involved in organizational growth and development can be characterized, as well as the behavior of the participating members. In Colombia, many faculties of administration have prevailed research on organizational structure focused on administrative principles and processes.
Something similar happens with the faculties of Industrial Engineering (Administrative Engineering) the investigations have been condensed to the theory of the rationalization of the work complemented with the administrative principles.
A good contribution from the sociological perspective to the "own" issues of the administration is the way of preparing this research work.
Finally, it should be noted that a particular style was assumed in the way of presenting the analysis of the research. It was based on the analytical model to support the statements that as a researcher were made with opinions that refer to the specific topic. The excerpted comments represented trends that characterized the exposed. This generated additional efforts and a systematic management of information sources.
A presentation in this way allows the reader to give a new facet of understanding of the reality of the research problem that was analyzed.
2. Of the elements and general concepts.
The ideas outlined in this article correspond to the actual results of the reality to which the research was determined, specifically to the so-called financial cooperatives in the time period of 1980-2000. I am careful not to generalize some similar trends and characteristics of the object of study (OFCC) to the entire Colombian cooperative sector and less to the solidarity sector. This to the extent of the limitations of all research; and for not knowing or having carried out research on the same subject with organizations from the other subsectors of the solidarity economy. I illustrate the above with the cases of cooperatives attached to the agricultural sector.From their internal structure, human nuclei unite, carrying out an excellent activity in social integration and involving the generation of social networks with their associates. The work that is most facilitated in rural areas has transcended to local / regional settings; but unfortunately, when it comes to research at OFCCs, the trend that set the tone was the opposite.
As I clarified at the beginning of the conclusions, growth and development coupled with changes in the organizational structure generated certain trends. Not all of them negative or contrary to their organizational goals and objectives. This interesting process has left some contributions that have been studied for other investigations. The contributions were most evident in the 1980s. In the 90s, re-orientations implicit in organizational dynamics began to appear in the OFCC. I am referring to the uncovering of private and individualistic management concepts of cooperativism as a concept. The complex situations in his work as cooperative organizations started his career.These are the trends that in our view do not contribute anything positive to clearly defined organizations of a social nature. This is what we want to highlight in a look from the outside mainly. Comments from the inside, from the investigation as such, were given in thesenpapier.
In Colombia the birth of cooperativism was linked to altruistic foundations, with a strong influence of European postulates from the end of the 19th century. Its organizational forms have mainly obeyed these positions. Our cooperativism was not accompanied in its construction of the associative foundations with deep roots in the forms of cooperation and solidarity systems that guarded our ancestors for hundreds of years. These forms of organizational structuring have been lost in our historical memory. Without historical memory our epic could not simply be written or sung by epic poets or troubadours. One of the reasons why our cooperators opted for international guidelines.And on the international stage, the principles and values of cooperation and solidarity were reduced to the principles and values of cooperativism. Pragmatism is reflected in the principles (in some cases 5, in others 7) and in the values (in some cases 4, in others 6) proclaimed and promoted by the institutions of international cooperative integration.
In spite of everything, the first generation of cooperators managed to some extent to legitimize the work of cooperative organizations as a practice and social transformation. It was in the late 1950s and 1960s that the births of OFCC and the vast majority of SFCC organizations emerged. In the beginning, these collective business and social organization proposals focused on the strategic aims and objectives and their cooperative purposes in direct relation to the expectations and interests of their social bases in particular, and of the community in general. External conditions were permeable and not so harsh for these organizational initiatives that solved basic needs. The social legitimation made possible the articulation in different local / regional development projects.In this context we are talking about cooperative organizations structured to function with different activities and / or services (consumption, social security, health, marketing, recreation, housing, savings and credit, among others). Multi-activity also included organizational instances to approach the work of the social and the local.
The emergence of globalizing mega-trends on the universal stage were main elements of the 1980s, but they were adapted and materialized in policies from the 1990s in our country. We refer to the strengthening of the international financial sector; to the consolidation of multinational trusts and their rational business logic; to wars for control of markets; and to the accelerated process of technological innovations. The combination of these elements is generating the most impressive concentration of wealth, and the creation of an individualized and individualizing discourse of modernization in national economies and in approaches to building business organization, which extends to the dynamics of society.
Colombian cooperativism was not oblivious to these incidents and new revaluations that somehow implied transformations in their organizational structures. In this sense, the second generation of cooperators promoted and made possible organizational guidelines that were directed towards strengthening the financial as a business purpose. The international discourse adapted to cooperative doctrine was the support that supported the need to modernize. In the organizations in our sample, four elements justified the modernizing wave: the lack of new sources of financing to sustain growth policies; the lack of cutting-edge technological developments; the deficiency in organizational management in light of new management concepts;and professionalization in financial management. Modernization led to the move from multi-activity to financial specialization. From closed link to open link. From the equity structure model to the banking or liability structure model. From social organizations for economic-financial purposes to the construction of economic-financial organizations for social purposes. From small but many credit unions to large but few financial companies. In other words, cooperative savings and credit organizations would adapt their structures to become organizations dedicated only to financial activity in a specialized way. Assuming this process meant competing side by side with the bulk of Colombian banks.Modernization led to the move from multi-activity to financial specialization. From closed link to open link. From the equity structure model to the banking or liability structure model. From social organizations for economic-financial purposes to the construction of economic-financial organizations for social purposes. From small but many credit unions to large but few financial companies. In other words, cooperative savings and credit organizations would adapt their structures to become organizations dedicated only to financial activity in a specialized way. Assuming this process meant competing side by side with the bulk of Colombian banks.Modernization led to the move from multi-activity to financial specialization. From closed link to open link. From the equity structure model to the banking or liability structure model. From social organizations for economic-financial purposes to the construction of economic-financial organizations for social purposes. From small but many credit unions to large but few financial companies. In other words, cooperative savings and credit organizations would adapt their structures to become organizations dedicated only to financial activity in a specialized way. Assuming this process meant competing side by side with the bulk of Colombian banks.From the equity structure model to the banking or liability structure model. From social organizations for economic-financial purposes to the construction of economic-financial organizations for social purposes. From small but many credit unions to large but few financial companies. In other words, cooperative savings and credit organizations would adapt their structures to become organizations dedicated only to financial activity in a specialized way. Assuming this process meant competing side by side with the bulk of Colombian banks.From the equity structure model to the banking or liability structure model. From social organizations for economic-financial purposes to the construction of economic-financial organizations for social purposes. From small but many credit unions to large but few financial companies. In other words, cooperative savings and credit organizations would adapt their structures to become organizations dedicated only to financial activity in a specialized way. Assuming this process meant competing side by side with the bulk of Colombian banks.From small but many credit unions to large but few financial companies. In other words, cooperative savings and credit organizations would adapt their structures to become organizations dedicated only to financial activity in a specialized way. Assuming this process meant competing side by side with the bulk of Colombian banks.From small but many credit unions to large but few financial companies. In other words, cooperative savings and credit organizations would adapt their structures to become organizations dedicated only to financial activity in a specialized way. Assuming this process meant competing side by side with the bulk of Colombian banks.
In terms of organizational conception and internal dynamics, financial specialization contributed to maintaining similarities with SFTC organizations. These organizations became the benchmark to follow and imitate in national markets. The existing duality (association versus business or business) in the OFCC began to divide, tending to privilege the business or business side. The achievements of the first generation on the association side ceased to be a priority for the second generation of cooperators. In this way, as a Colombian cooperative member commented (ZABALA Salazar, 1997: 17), the impetuous, ardent and passionate force that the gods granted to the first generation of cooperators did not affect or extend at all to the second.
It is logical to think that the transformations of the organizational structures were influenced by contexts and external variables. This is due to the trends that have determined the modernization of processes and the same internal dynamics of all Colombian business organizations. Although the above is true, a group of leaders and administrators of these cooperative organizations in a game of power relations managed to consolidate themselves in the political-strategic leadership in the late 80s and early 90s. The internal repercussions on the construction of the structures were, and in the case of the OFCC, mediated by elements that were characteristic of those who led and those who administered.In this way, they homogenized an organizational concept that adapted cooperative principles and values to neoliberal business pragmatism. Historical memory definitely disappeared from the cooperative scenario.
In this sense, the mentality and tasks of leaders and administrators were allied to forms of organizational construction not necessarily typical of cooperation and solidarity. Organizational management was a people problem. In some cases it was of small groups, and not of direction or activities based on collective and / or democratic processes. The adopted schemes were imported from the forms of managing and directing profit-oriented companies, which necessarily had its repercussions in the construction of the same.
The organizational management developed and influenced by these cooperators then remained framed in a “modernization” of the cooperative organization in order to adapt it to the new requirements that international economic-financial trends had been imposing. In the scenario of international cooperativism, advances in this line of construction were due to institutions with a recognized track record. The Credit union National Cuna Mutual, League of Cooperatives of the USA, ACI, COLAC, WOCCU, among others, put their “grain of sand” to the impulse and consolidation of this project. It is noteworthy that both political-ideological and money flow support for the construction of this style of cooperative organization deepened from the consequences of the consolidation of the Cuban revolution.Since then, contacts were maintained with the second generation of cooperators and their union organizations such as UCONAL (later converted to a bank) and CONFECOOP itself.
The modernized cooperative rationality was explained by these entities under the doctrinal platform of world cooperativism in a clear adaptation to the business concepts of the end of the 20th century. In these changes there was no vindication or deepening of the rationality of non-profit that precedes organizations of a social nature and democratic management. I simply opted for an instrumental rationality, reducing the differential factors with the SFTC organizations.
On the other hand, the Colombian State, in collusion with the group of administrators and cooperative leaders mentioned above, promulgated laws, decrees and resolutions creating an entire regulatory framework that guided the activities of the OFCC towards financial matters. Law 79/1988 provided the first stitches in the field of financial specialization, giving rise to the so-called financial cooperatives. Law 454/1998 formalized, consolidated and projected this trend. Consumer, speculative and rentier loans were formalized as their own activities in the organizations under study and outlined what they named SFCC.
With the previous task, the organizational structures were adapted with financial areas tending to create credit lines destined mainly for consumption. The designs of financial products obeyed more to the logic of recruitment and placement to obtain profitability levels that would strengthen the organization as such. In this process, their inherent social character was ignored, to the extent that the use of credit did not generate social impact from collective dynamics and less to the foundation of social fabrics. For example, construction of decent housing plans from specific conglomerates of organization of people. Support and impulse from clearly defined policies to community-based business units with significant impacts on the local and regional etc, etc.,in short, in self-managed experiences that will make it possible to consolidate as an alternative social development movement. Likewise, investments in the productive sector that privileged the organizational approaches of the Solidarity Economy have been very minimal. The transformation of the organizational structure was not due to seeking forms of consolidation and presence in the real sector of the economy through these different organizational forms that have been contained in the solidarity sector.The transformation of the organizational structure was not due to seeking forms of consolidation and presence in the real sector of the economy through these different organizational forms that have been contained in the solidarity sector.The transformation of the organizational structure was not due to seeking forms of consolidation and presence in the real sector of the economy through these different organizational forms that have been contained in the solidarity sector.
Likewise, the application of the resources obtained from their social bases was diverted towards speculative activities, rentiers and other investments in capital markets that were not characteristic of the cooperative sector. It was invested in the purchase of private companies, in the acquisition of sumptuous land and buildings, and in clearly speculative businesses not very well regarded for organizations with a social focus. For the sake of profitability, large amounts of money were disbursed, creating a concentration of credits in a few hands.
The non-transformation of the social and the local as an organizational conception was preceded by a vision that restricted the concept of the social. The possibilities of giving access to credit to people who for different circumstances were not considered credit subjects by the SFTC, were in themselves the social. In this idea, credit disbursements were assumed by themselves as articulators of circuits and networks that stimulate local / regional economies. The generation of employment is added to the previous discourse, and the payment of some punctual taxes as characteristic elements of this way of seeing the social.
The construction of organizational structures based on financial activities, together with the conception of organizational construction not covered by the principles of cooperation and solidarity, led the second generation of cooperators to privilege growth, leaving organizational developments to the background. In this framework, the concepts of modern administration were assumed without a level of inventory, and in many cases extrapolated into the organizational realities of these cooperatives.
Gigantism, managerialism, and efficiency created an environment to show the increase in quantitative indicators that gave significance to growth. The internalization of this process was interpreted as the efficiency of organizational management comparable to the achievements that the SFTC has had in this field. The previous statement is true in terms of organizational growth, or if these organizations are given the connotation of a common and ordinary company. But in the field of organizational development, unfortunately, its management is questionable. All to the extent that quality of life goals were not prioritized, or explicitly unknown.
The phenomenon of organizational growth with a strong dose of expansionism paved the way for individualized processes and encouraged competition among their peers for the markets (contrary to emulation) throughout the SFCC. It also led to the concentration in the same sector of some organizations (supposedly the most efficient) to the detriment of the others. At the end of the 1990s, the 50 largest financial cooperatives owned a close to 80% share of total SFCC assets (excludes cooperative banks and insurers); and 51% of the total assets of Colombian cooperativism. In turn, the SFCC (includes cooperative banks and insurers) generated 170,000 direct jobs, representing 18.8% of the total jobs generated by the solidarity sector.Figures that are not very representative and eloquent in job creation if the exaggerated levels of assets and other growth variables are taken into account. Some data in this sense are shown in Annex 1.
This structured and strengthened an external organizational design. Indeed, the atomized / competitive model, which does not have a unitary and emulation philosophy, fit well into these positions. The SFCC organizations and the pertinent unions adhered without hesitation to it. The federated model, which clearly limits the domains of operation avoiding direct competition between cooperative organizations, was simply not taken into account. The model assumed as a guide tacitly contributed to the individualized processes carried out by each of the organizations, leading them to squander large sums of money, time and effort. Many projects, such as innovations in technological platforms, were extremely expensive because they had not been assumed with joint criteria.
The same configuration of the external organization model reduced the possibilities of incidence, in a single direction, of transformation policies in the financial environment. Thus the fulfillment of the cooperative purpose of the business or business was hindered. To a lesser extent it happens with the policies issued for the transformation of the environment in which they are circumscribed as organizations. Compliance with the cooperative purpose of the association was hindered. And finally, the capacities for political dialogue with the authorities or centers of state power were weakened.
In one way or another, this scenario left OFCCs exposed to the structural fluctuations of the financial market and vulnerability as transforming projects. They became the weakest link in the entire chain and second-rate guests to a big league game. The SFTC crises will inexorably influence the dynamics of the SFCC, as indeed happened with the 1998 financial crisis in Colombia. This event revealed many of the questions that this investigation threw up.
A combination of the trends noted in the preceding paragraphs, allowed to devalue and / or distort to some extent the concept of cooperative organization. The cooperative "ethos" within the same social bases has been assimilated in its imagery as a business / company simply. The prevailing and visible Darwinian logic in the SFCC de-certifies them as transforming forces of social relations. Likewise, the similarity with the SFTC has meant that the social acceptance of financial cooperatives no longer has an important place in the collective imagination. Its legitimacy as a social practice, self-management, creator of social fabric and increased quality of life are questioned.
In this regard, I mention the comment of a friend of mine, a financial adviser and a worthy representative of the SFTC. Evoking a more Kafkaesque than realistic position, he told me: “The SFCC only has three alternatives left to sustain itself in the financial market in the future. The first is to focus on microfinance. The second run away, abandon everything; and the third is collective suicide ”. Naturally, the last two alternatives have no support. Facing microfinance as a foundation for financial cooperatives, there are many reservations. With the forgiveness of multilateral organizations (World Bank, International Finance Corporation, Inter-American Development Bank) and Colombian financial unions (ASOBANCARIA and ANIF),I share the opinion that considers financial activity useless for the sole purpose of speculation. Its main function should be aimed at guaranteeing financial resources to the productive sector of the economy, at least in Colombia, obviously involving specific economic sectors in this process.
The SFCC should not continue to be a mere credit setter and less destined as a consumer policy (I do not mean to say that microfinance is only consumer oriented). Small credit (not necessarily synonymous with microfinance) should be placed in localities or regions that allow a symbiosis with the local economies. In other words, reactivate productive business units in the sector that is really the responsibility of cooperative banking. With the obligation, since it is of a social nature, to insert itself into economic circuits that stimulate processes of development and social organization. Only in this way would they be fulfilling their postulates of transformation of the social and the local. The microfinance discourse is a euphemism for financial cooperativism.It deepens the instrumental rational logic evoked by organizational growth as a paradigm. The microfinance concept promoted by international entities assigns to cooperative organizations dedicated to financial activity, a task of softening and humanizing negative effects that the system itself is producing.
Today it is a little more difficult to build true social organizations, since the environment and environment in which it operates is adverse to it. The private and state sectors, with boundaries little differentiated by the privatization mega-tendencies, stand as the main foundation of a fragmented and individualized Colombian society. Reacting in search of reorientation towards transformative cooperativism that copes with the shortcomings of the current economic model will be the task of the third generation of cooperators. The work is facilitated since there are mechanisms given by the Colombian constitution of 1991. Approaching as a social rule of law, and the intention to protect and promote associative forms of the solidarity economy stipulated in decrees 58, 60, 333 can be a interesting legal support.
To finish, it is necessary to comment that the sources of information to carry out the investigative work were located mainly in the people who in one way or another were part of organizational leadership. It would be worth considering and developing research from the point of view of the associates or the social base in general. This is due to the role that they played or should have played in these transformations of the organizational structures in the OFCC. It would be to inquire a little about the organizational degree and its permeability so that many of the trends that occurred in said processes, effectively consolidated.
3. Of the business reality
The research work to which this article refers was a critical study that emphasized OFCC problems and pathologies more than their normal tendencies. Reason why the conclusions cover behaviors more than the negative that of the really positive. In fact there are many elements that enhance the positive character in these cooperative organizations hinted at in other research. This does not mean that OFCCs in particular and SFCC in general are not seen as an alternative proposal for economic and social development. The organizational viability of these organizations is shared, as long as their actions are consistent with their business name.
By their very social character, the OFCC had theoretical-philosophical references in Cooperation and solidarity. The marked dependence on international cooperativism led them to get in contact with international organizations (ACI, COLAC, etc.), keeping the international guidelines as a reference for their behavior. In this context, the principles and values of cooperation and solidarity were assumed and reduced to the principles and values of cooperativism.
In organizational terms, it implied that the organizational structure for its transformation in the first years of operation, used cooperative principles as a guide. This was also evident in the same formalization against the Colombian State. When OFCCs decide to enter into full competition with the SFTC, cooperative referents take a back seat. The new benchmark was the market.
The connotations were clear in these two-character organizations (association versus business or business). The change of conception of social organizations with economic-financial purposes for economic-financial organizations with social purposes began. The balance of the association against the business or business had its break. The association was surpassed by the conception of business, and ceased to be an end to become a means. Entrepreneurship ceased to be a means to become an end in itself.
Social, in the strict sense of the word, became an external and marginal process to the OFCC organizational structure, just as some Colombian business groups understand and work with it. The prevailing entrepreneurial conception in our country places the social in the sphere of merely generating employment and paying taxes, combined with the occasional social service (education or promotion of cultural activities, for example). The OFCC ended up identifying with this position.
This obviously did not allow OFCCs to differ in their organizational approaches or in their actions from SFTC organizations. It also prevents continuing with collective processes that transform realities and relationships of the environments and environment in which they operate. Similarly, the satisfaction of needs did not fully cover the increase in the quality of life (standard of living + living conditions + livelihoods) of its associates. He was only limited to one of its components: standard of living.
In Colombia, the origin and growth in the OFCC's first years of life was the product of the direct influence of the labor unions (in some cases with unconditional help from the respective companies); the Catholic Church; and in specific cases the national government (fundamentally through the two historical political parties). These were the institutional references that served to shape an organization concept. Subsequently, with the foundation of the union of national cooperatives UCONAL, the administrative and savings and credit construction part was advised.
UCONAL, as a promoter of cooperatives dedicated to managing savings and credit, continued with its mission until long after becoming a bank in 1991. In a sense, the focus of growth and organizational development of financial cooperatives is the work of this organization. As a bank, in addition to being a resource facilitator, which in many cases mediated through rediscount lines with the bank of the republic, it became one more competitor of its associated-owner financial cooperatives in raising and placing resources financial. Something similar happened with COOPCENTRAL but not so much on the national stage, but on the regional one.
In this same order of ideas, Colombian cooperativism was influenced by international cooperation programs mainly framed within the plans of the Alliance for progress led by the US governments of that time. In some way, the external structure known as Atomized and competitive due to its individual consolidation process aimed at organizational growth as a strategy, was inherited from these programs. The federated model that works in Europe, and that restricts competition between cooperative organizations, was simply not taken into account.
Two elements determined trends common to all these organizations analyzed, in their processes of organizational growth and development that were mainly evident in the early 1990s. The first related to the idea of providing only financial services (financial specialization), leaving aside the possibility of continuing to offer a diversity of services (multi-activity), such as health, construction, marketing, etc. Specialization displaced multi-activity over the years. In fact, this trend influenced the government regulation to readjust and institutionalize savings and credit structures and activities. Financial specialization brought three main things: a. The formalization and change of rational logic, b.The incorporation of technical-administrative personnel from the private sector, and c. Loss of identity vis-à-vis its associates for the first degree cooperatives, for the second degree cooperatives (UCONAL and COOPCENTRAL) it is added that they ceased to be integrating entities.
As a second element and linked to the previous one, there is a process of expansion in two directions: On the one hand, geographic expansion with the opening of agencies / branches / offices at the local, regional and national levels. On the other, the expansion of financial products and services with frequent introductions in innovations. This mainly meant large capital investments in technology, in addition to rental investments (purchase and / or adaptation of premises and infrastructure) and high operating expenses.
Choosing financial specialization as a strategic purpose allowed them to internalize administrative-organizational concepts typical of traditional Colombian banking. Likewise, the expansions led to opening the relationship link with its associates to third parties. These went from being closed organizations to being open-ended. The social base (associates) in this way went from being homogeneous to behaving heterogeneously. The cooperative bond became more complex and weak in their relationship, as the set of relationships that existed between associates and the cooperative organization became de-personified by the increase in the number of associates and third parties. We are talking about organizations that went from 3,000 to 4,000 associates on average, to having 100,000 to 200,000 between associates and third parties on average.
In this context, some of the first associates (founding associates or associates who were linked in the early years of growth of the OFCC) assumed reactions against the openness and disagreement with some transformations. It could be the case of COOPROPAL that its members did not allow the opening of the closed character. These first associates had the characteristic that due to their will and clear awareness of their needs, they decided to form the organization of which they are part (there is an affinity to the group). The rest of the associates became linked not so much by the affinity to the group or the cooperative ideals, but by the possibilities of accessing credit. Personal interests prevailed over the group as such.The social (through cooperative education for example) was one of the instruments to neutralize this situation.
In the same way that most of the members of the OFCC were linked, their reaction to the changes was easily neutralized by the strategic peaks. The participation in the calls of the maximum democratic events (such as the assemblies) ranged from 15% to 20% of those associated with full rights. The sense of belonging was not very clear, and they did not feel responsible for the decisions and destinies of their organizations. This gives an idea of the behavior in the face of change and paved the way for the formation of relatively small groups that assumed the changes and destinies of these organizations.
With the two aforementioned elements in the background, the transformation of the organizational structure begins in the face of the new conditions of internationalization of the economy, which coincided in the 1990s with the strengthening of capital markets. The time of the equity structure is left behind to start with the liability structure. It was the propitious moment to introduce formulas of organizational management in which the criteria of financial profitability prevail to the detriment of those of cooperation and solidarity.
For analytical purposes in the research period, the transformations of the OFCC organizational structure were referenced in three structures (Machinist Bureaucracy, Professional Bureaucracy, Divisional Structural Configuration) and three organizational designs (Linear, Functional Organization, and Mixed Organization).
In the analysis of the structures there is a conclusion that stands out in terms of authority and power. There was a bureaucratic style that led to a centralization of power at the strategic peak (General Management and Board of Directors). This style is also present in the formalization of the organization, in its rules, policies and procedures. The move from relatively small local organizations (80s) to large regional or national organizations (90s) was also based on authority and leadership styles with bureaucratic or pyramidal emphasis. There are very few cases where leadership was motivated by collective processes. It is not denied that in the early years of the 80s there were defined managerial styles towards social management with humanistic leadership,guided by ideals of cooperation. However, there were levels of decentralization (especially by region) that managed relative quotas of authority and power. It is clarified that although different concepts of authority and leadership with horizontal approaches as a reference, penetrated the organizational structures of the OFCC, they did not completely replace the autocratic approaches.
In organizational building, the leadership of boards of directors until the mid-1980s, and that of general managers until the mid-1990s, was gradually permeated by cooperative technocrats. In the sense that they were the ones that really had a direct impact on the transformation of the organizational structure. General managers, with very few exceptions, assumed more executive than organizational positions. This change in role led them to lose direct relations with the organizational bodies of their respective organizations, subject to the work carried out by the technocrats. For their part, the boards of directors assumed contemplative positions and without substantive discussions on restructuring and / or changes to organizational structures.
In the analysis of the designs, a functional grouping cut prevailed that falls mainly in three areas: Commercial Management; Administrative management, and financial management. In only two cases do we find the social area at the same level of management, as development management / social management. SOLIDARIOS, which maintained its social management, and COOMULATED that after the death of the manager of this instance in 1995, he decided to finish it as management to transfer his functions to the administrative area. As a majority trend, work in the social area was assumed as an instance external to the command line, functioning in some cases as a department and in others as programs. Financial specialization and rationalization (efficiency) of resource management began to locate social work as an expense.It was not free then that several organizations in our sample ended up detaching themselves from the social as an organizational area or instance. To do this, they contracted these services with third parties, or simply created a foundation in the style of private companies to carry out these activities.
At the end of the 90s, the financial areas finally consolidated as a strategic area in these organizations. In a last plane were the areas of social development. The social was subordinated to the financial. The financial abandons its character as an instrument to become a single purpose. In this logic, the structure of several OFCCs is adapted to take advantage of the capital market. Likewise, seeking high profitability, large investments and / or purchases were made in trust companies, commercial finance companies, stock brokerage companies, leasing, hotels, among others.
Organizational designs also showed an organizational management trend highly influenced by the concepts of modern administration. Although it is true that until the end of the 80s the management in the OFCCs was based on the cooperative approach to organization, by the end of the 90s the homogenization of the private approach to organization was indisputable. The characteristics of the cooperative approach and its complementarity with the philosophy inherent in the organizations of common property and democratic management, were displaced from the organizational structure by a modern business management logic approach.
As the second approach to organizational management made a career in OFCCs, the ownership of the concepts and visions of the private sector became clearer and more evident. The point was that it became ideological doctrine. Undoubtedly, who took the first step to extrapolate managerial management techniques into business or business (managerialism and efficiency) was UCONAL. Managerialism and efficiency are a scheme typical of the solidarity economy that in principle does not combine with double character organizations.
Despite the cooperative and humanist training of the general managers and many of the people who made up the boards of directors, there was no political will to confront the cooperative technocrats in their career of incubating managerialism, efficiency and gigantism in structures organizational. Political will was also lacking to force an organizational management not so much referenced in cooperative principles but as a principle in itself that differentiated OFCC as true social instruments with economic and financial purposes.
From the point of view of organizational growth and development in OFCC, growth prevailed as an overwhelming trend. This explains a little the strengthening of the private approach to organization and gigantism as an extreme conception. The organizational development associated with the quality of life of the social base and the transformations of the local, was promoted since the 70s. The boards of directors and general management focused on it as a policy consistent with cooperative organizations. The foregoing laid the foundations for the evolution in the structure of the social committees to the large departments of social development, which came to languish in the mid-1990s.
Here also in the unbridled race to compete side by side with the SFTC, in wanting to be large business organizations, they generated an organizational dynamic where the principles and purposes of the OFCC, were not in line with the transformations in their organizational structures. In this sense, as two-character organizations, there is not much to say about their organizational developments manifested in their social actions, in the transformation of their localities, and in their articulation with the principles and values of cooperation and solidarity. As business projects if there is much to add. Its organizational growth has been a real success in the business world, regardless of the effects of the 1998 financial crisis on the entire financial system.The truth is that there were processes that strengthened entrepreneurial capacity and managerial innovation that helped guarantee the transformation of small cooperative savings and credit organizations into large financial services businesses.
In this scenario, the perspectives of the SFCC in a society that tends to an increasing degree of individualization and fragmentation are not very flattering. Today we can say that if we continue with an approach to build organization privileging only organizational growth, most likely, we will have large cooperative organizations transformed into corporations. Organizational development as a complement to all growth should not be minimized in double character organizations. Organizational growth and development must go hand in hand with their organizational transformations. We must rethink this approach, return to the principles and values of cooperation and solidarity or at least to the principles and values of cooperativism. Take advantage of the growth that has given to, and from there,resume organizational development as a complement to a vision more in line with social organizations.
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