Organisational Learning and Firm Performance of Credit Co-Operative in Malaysia

Abstract

This paper examines the relationship between organisational learning and business performance relate in a Malaysian credit cooperative. According to a study of the research of organizational learning, which is organisational culture, leadership, and empowerment. A proposed conceptual model has three constructs in addition to organisational learning outcomes and organisational performance. Four hypotheses proposing relationship between the three variables were look at in order to constructs in the research model. A survey of the directors and managers of credit cooperatives is the research method used to obtain primary data. a survey intended to gauge their perceptions of organisational learning practises, organisational antecedents, and organisational learning outcomes. Upon completion of the questionnaires, researcher plan to disseminate the questionnaire online to more than 500 board members and managers of credit cooperatives in Malaysia after it has undergone pretesting. Researcher anticipate receiving 250 complete surveys back with a response rate of 50%. To develop concise, validity, and reliability to measure organisational learning and its variables, namely organisational culture, leadership, and empowerment, as well as organisational learning performance, data were analysed using the statistical package software (SPSS) version 22.0. The study's conclusion were include a discussion of the results' ramifications. There are recommendations for academics, managers, cooperative authorities, board members, and organisational researchers.

Keywords: Firm Performance, Leadership and Empowerment, Organisational Learning, Organizational Culture

Introduction

A group of individuals who cooperate to manage a jointly owned and democratically run business (enterprise) in order to accomplish their common economic, social, and/or cultural aims and objectives is known as a cooperative. Members of the cooperative are those who use its products, resources, and/or services. Although member services are typically given more priority in cooperatives than investments, earnings are frequently returned to the cooperative's members. Cooperatives can be founded for a variety of reasons or to solve a range of requirements, such as shared labour control, cost sharing, shared labour control, purchasing power (bulk purchases), sharing of workers and wages, and others. Following the success of the movement in Cyprus, Sir Arthur Young, the British Secretary for the Straits Settlements, had the idea to establish co-operatives in Malaysia (then known as Malaya) in 1907. The local community initially had a less than favourable reaction to the cooperative movement since it was thought to contain aspects that were regarded as questionable.

The development of a co-operative will provide shareholders with the opportunity to expand their wealth in their community, particularly for those with low or moderate-income. Aside from that, co-operatives have the potential to reduce financial burdens, particularly among government employees (Smart Mhembwe & Ernest Dube, 2017, p. 231).

In a Credit Co-operative setting in Malaysia, a developing nation, this study looked into the level of organisational learning practises that are now in place. We'll look into the metrics for measuring organisational learning and its precursors. Organisational culture, leadership, and empowerment are the three key antecedents of organisational learning, according to a review of the research. A proposed conceptual model includes three constructs together with organisational learning outcomes and performance.

Problem Statement

Four research gaps that were outlined in the previous section are looked at in this study. A significant amount of study has been done on the individual linkages between organisational learning and organisational culture, leadership, empowerment, and organisational performance. Less study has been found on organisational learning, however, that simultaneously considers how organisational culture, leadership, empowerment, and their impact on organisational performance interact. The mechanisms used in organisational learning are unique in that they are based in culture (Nicole Roder, 2019). How does organisational learning and its antecedents influence the performance of Credit Co-operatives in Malaysia has been identified as the overarching research problem. since there hasn't been much research done in Malaysia.

Research Questions

There are two questions was study in this research as below:

Does the comprehensive model, which includes organisational culture, leadership, and empowerment, of the linkages between cooperative organisational performance and organisational learning give a reliable result?

Are there any relationship between organisational learning and the effectiveness of Malaysian credit cooperatives?

Purpose of the Study

The research came out with evidence on the perceived performance of credit co-operatives that can be influence by an organisational learning process. In detail, it can be seen that at the end of the process, it will show valuable input to those who are involved in developing the organisation in co-operative namely, Board and management staff. In a wider context, the finding will use as an important matter to contribute to the various bodies to regulate and make policy decisions on the development of co-operatives, like the Ministry of Entrepreneur Development and Co-operative (MEDC) and the Malaysia Co-operative Societies Commission (MCSC).

Research Methods

There are a few methods that researcher used to collect data and one of them is survey method using a questionnaire (Julie Ponto, 2015). Survey method can be used in a group that allowed doing quantitative analysis and collecting huge data through methods like distribution of questionnaires, interview through telephone call or media social. Through the distribution of questionnaires, the researcher will utilise the survey approach to collect the data. Respondents for the research are from Board of Directors (BOARD) and managers of credit co-operatives of all sizes or clusters. Generally, credit co-operative can be described as a registered co-operative which runs credit activity such as giving loans to their members at a reasonable interest rate. However, this study does not include another financial co-operative like bank of co-operatives. The aforementioned co-operative banks, Bank Rakyat and Co-op Bank Pertama, are excluded from this analysis due to significant variations in their operational systems, membership sizes, product offerings, operational regulations and processes, and overall revenue.

Sampling procedure in this survey study contains three main stages. Firstly, a list of 589 credit co-operatives registered by Malaysia Co-operatives Societies Commission (MCSC) as of 31^st December 2020 was sourced from the MCSC. However, only 536 among them have sufficient contact details, and the rest have dropped due to lacked of information like address, contact persons and telephone numbers. Secondly, the study needed a minimum sample size of 230 credit cooperatives, according to the table of necessary sample sizes and statistical methodology proposed by Krejcie and Morgan (1970) and Zikmund (2000).

The targeted respondents for the survey study are BOARD and managers of the credit co-operatives. These groups are targeted as respondents because they are directly responsible for effective performance of the co-operatives.

Research framework

Research framework was developing to study the as below:

Research framework was developing to study the as below:

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The dependent variable for this study will be the performance of credit co-operative whereas independent variables are organisational culture; leadership and empowerment (refer to Figure 1. Research Framework).

Finding

Result shows the level of response rate by Co-operative Cluster. The total number of credit co-operatives in this study is approximately 536, and the researchers have recently contacted them. It appears that not all respondents decided to take part in the survey. Only 501 responders had completed surveys, according to the researcher. The set of questionnaires received from the 35 respondents, on the other hand, was incomplete and was deemed invalid and dismissed. For this study, the 501 sets of completed questionnaires will be analyses. Table 2. shows response rate by co-operator cluster as below.

Table 3. explains the financial information profile of 501 credit co-operatives (micro, small, medium, and big) in terms of membership size, total shares, total assets, revenue, and profit or loss.

Results and findings from this study showed and explained there are significant relationship between independent variables which organizational learning (organizational culture, leadership, and empowerment) and dependent variable a firm performance.

According to the table of necessary sample sizes and statistical methodology offered by Krejcie and Morgan (1970) and Zikmund (2000), the study required a minimum sample size of 230 credit cooperatives. This study also found that in the Malaysian co-operative environment, leadership has an impact on organisational culture, and have an impact on the learning process.

This study found that workers have self-confidence in their ability to accomplish a job and have the capability to establish trust in organisational learning based on the empowerment construct indicator loadings. As a result, this study found that having proof as a component of organisational learning leads to greater organisational performance, with employee satisfaction being one of the performance measures.

All of the direct relationship paths between the construct and organisational learning were found to be significantly different from zero in Figure 2 below, with the exception of a non-significant direct path between leadership and organisational learning, where leadership does not influence organisational learning directly but does so through the mediums of empowerment and organisational culture, with organisational culture having the largest influence.

This study also found that in the Malaysian co-operative environment, leadership has an impact on organisational culture, which in turn has an impact on the learning process. This study found that workers have self-confidence in their ability to accomplish a job and have the capability to establish trust in organisational learning based on the empowerment construct indicator loadings. Figure 2. Showed relationship between variables and as a result, this study found that having trust as a component of organisational learning leads to greater organisational performance, with employee satisfaction being one of the performance measures.

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Conclusion

The report of the study will contribute to the insight of the level of organisational culture, leadership, and empowerment among credit co-operatives in Malaysia. These will help co-operatives to assess the efficiency of the learning process. In a competitive business environment, a good learning process can contribute to the necessary assistance and guidance for the success of co-operative and building up its good reputation. The study will help co-operative to gain more details to develop guidelines on learning in co-operatives. At the end, it can show the finding that can be used to formulate policies and guidelines for the performance of co-operatives and lead to the new questions for the future research. Last but not least, the research can give support to the significant of information in audit of co-operatives.

Acknowledgement

Researchers would like to thank to UUM Kampus Kuala Lumpur, supervisor, lectures and friends. This paper is self-funding by the authors

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