Improving the Performance of Cooperative Businesses through Redesigning their Productive Capacity: A Case Study of Consumer Cooperatives in Hamedan

The main purpose of this study was to investigate ways of improving the performance of some consumer cooperative businesses in Hamedan province, Iran, through redesigning their productive capacity. In this descriptive applied survey research, two questionnaires were designed: one to collect the opinions of the managers of the cooperatives (n1 = 82) and the other for their members as consumers (n2 = 160). The validity of the instruments was ensured by a panel comprised of scholars from Bu-Ali Sina University and experts from the provincial bureau of the Ministry of Cooperatives, Labour and Social Welfare, while their reliability was calculated to be 0.78 and 0.93 using the Cronbach’s alpha via two separate pilot studies. To analyze the data collected from the questionnaires and to further investigate the construct validity of the cooperative's business performance in the proposed model, a confirmatory factor analysis was done and SPSS and LISRELsoft ware programs were utilized respectively. Meanwhile, the goodness of fit indicators confirmed the consistency of the proposed model with the field evidence. From the viewpoint of the managers, the following factors account for 64.59 percent of the improved business performance of cooperatives: (1) legal and financial protections, (2) physical facilities, (3) personnel motivation, (4) goods quality improvement, (5) marketing/advertising, and (6) trust building amongst managers and staff. Nevertheless, the customers mentioned that the following features could largely improve the cooperative's business performance: (1) being quality-based and customer-based, (2) advertising and informing, (3) behavior of personnel, (4) improving some physical factors, and (5) developing electronic services.