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Founding
native crafts dependent corporations,
as an approach to social welfare
driven economic development of
underdeveloped
communities, has been presented as having
the potential for creating large number of employment
opportunities. One approach to founding such corporations was
explained as Crafts-Based Cooperatives, which contracted the
crafts practitioners to become crafts suppliers to the
cooperatives. The significance of this arrangement is
effectively elicited through
the analysis of the very essence of what a craft is.
In the practice of a
craft -
a stable subsistence living
- the practitioners usually buy the raw materials in small
quantities and produces the craft-product in proportion to the
quantity of raw materials purchase, and then sells the products
upon finishing.
The crafts-skill sellers
effectively are simultaneously production forces and an entire
miniature company onto themselves.
Now given that by the non-aligned
practice of subsistence Crafts Operations, the
production, marketing and sales activities are undertaken
singularly by the crafts practitioner.
Often though the quantity of raw material purchase is dependent
on space
availability for storage, speed of completion as a result of
time availability because time for such people are usually split
across several tasks, and available funds because after all
practitioners of crafts for subsistence living are generally
without much disposable income.
Now given that the
vision analysis of the Crafts-Based Cooperatives necessarily
stipulates the design of various business functions set
that include all such
venture corporation business functions except the production operations, so
contracting the several crafts-trades sellers as crafts suppliers
and the positioning the venture cooperatives as wholesale buyers of the crafts,
invariably separates the production forces and the marketing
forces of the several miniature crafts operations while
simultaneously
fusing the marketing forces into a different entity for
efficiency of production but continuing to let the production
rest with the crafts trades sellers.
The entrepreneur desirous of
founding a Crafts-Based Cooperatives is in every respect, as the
entrepreneur addressed under
The
Entrepreneur. In effect, the would-be founder of a
Crafts-Based Cooperative must perform all the tasks expected of
the non-crafts based venture developer entrepreneur. Yet there
are distinct differences between the circumstances of the
conventional [or non-crafts-leveraging] entrepreneur and the crafts-leveraging
entrepreneur. A cooperative is structurally similar to a
corporation, however, unlike a corporation, cooperative has no
shareholders, rather it has beneficiaries.
The difference between a
cooperative and a corporation, is limited only to the nature of
the relationship between the associates and the legal |
entity.
A cooperative entity obtains when a group of people who produce
certain products come into an agreement to deliver their products to
the entity, with an accepted management team, which then sells the
products for any amount possible while compensating the producer a
fixed monetary amount, irrespective of the amount for which the
product was sold. The balance, if any, is placed with the entity to
meet operating expenses as well as smoothing out fluctuations in
sales prices in order to support steady compensation payment.
Effectively, a cooperative is more or less a Business Trust. The
producers/suppliers of the products are also the beneficiaries of
the cooperatives, and are also known as the grantors to the
cooperative. The valuation of each producer/supplier delivery to the
cooperative constitutes the value granted at each such delivery to
the cooperative.
Outside of this difference in the
relationship between the entity and its associates, a cooperative
and a corporation are both internally structured and operated the
same way. So in planning for the
inception of business operations of the Crafts-Based Cooperative,
then the entrepreneur can adopt the perspective applicable to
corporation assume that the cooperative as it were a corporation is
in the position
on the Adizes Corporate Lifecycle Curve that
characterizes the Adolescence, and that the stage of the cooperative development on the venture start-up stage
is [early stage] Execution Phase. This assessment, of course, is
quite significant in the development of the Operational Cooperative
Growth Strategic Plan, which the cooperative would operate as
competitive strategic thrust [in] counter to the competitive forces
identified through the competitor analysis of the Strategic Forces
Model. In any case, the
vision for founding crafts-based
cooperative, without any doubt, even while having
an underpinning of innovation, has the innovation only in the Marketing Tactics dimension
of the product innovation dimensions.
In
consideration of these characteristics of the crafts-based
venture, only the
growth strategic of Horizontal Integration cab be adopted by the entrepreneur who is
intent on founding venture cooperative with growth
strategic goal based on native-crafts leveraging. The Horizontal Integration
Growth Strategy adopts the growth thrust of maintaining
association formation with the prevailing operations of a very specific
crafts operation as seed and then growing from the one member
association to the many member association with concomitant expansion
of volume of production; and hence effectively
operating with the object of facilitating
volume production of the subsistence crafts-products, yet
notwithstanding
the subsistence character of the product, eschew the default obvious marketing
strategy of high volume low margins for high volume higher
margins on the assurance of steady supply.
Even then, the Horizontal Integration
Growth Strategy to be adopted by the entrepreneur must
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actually be a variant of the type
presented above. The variation is motivated by the circumstance that
the entrepreneur is not already an established crafts practitioner.
The entrepreneur has no reference operation from where to initiate
the horizontal integration.
The Horizontal Integration Growth
Strategy variation obtains from being constructed on the guarantee
of wholesale buyer agreement, with the cooperative as a Trading
Company owned by the crafts producers:
The bringing together of a collection of people practising the same
craft, which is tantamount to undertaking the formation of an
association, for more structured and superior marketing capability
than each craft producer is capable of.
Further in undertaking the vision
analysis, the crafts-based cooperative invariably
must adopt a Corporate Growth Strategy,
naturally, based on the aforementioned variant of the Horizon
Integration Growth Strategy.
The Growth Tactical
Plan must necessarily follow the Strategic Plan:
The approach is akin to the founding of an association. Effectively,
the entrepreneur must treat the crafts business sellers as grantors
of assets supporting the operations of the cooperatives, and as such
both as suppliers and as equity-holders, such that each one's
product delivery is assessed and used as the basis for valuation of
grantor investment. Of course, needless to state that extensive
training is required here to inculcate the concept of cooperatives -
or joint-venture ownership corporation - in the participants.
Further, the Plan must also develop means of overcoming the
shortcomings of the crafts-skill sellers such as warehousing space
and financial limitation.
At the inception of
operations, as with the
founding of venture corporation, in any other situation,
implementation of a strong corporate culture is imperative.
Internal intelligence
system is absolutely imperative to head-off misconceptions at the early
stages of the gelling of the individuals into having shared vision
and with the mindset of being of one corporation.
Except perhaps for Shadow Organization, the entrepreneur must aim to
implement all the other aspects of the founding of venture
corporation deemed important. |
