1.

DEVELOPMENT KOPERASI AND LEGISLATION

Development of koperasi can be defined as a process of change that
concerns the life of koperasi in order to achieve the welfare of its members.
Indonesia as one of the developing countries today, also helped build or develop
koperasi. In Indonesia there are divided into 2 era of development, Pembangunan
Jangka Panjang (PJP) I and Pembangunan Jangka Panjang (PJP) II.
Development of koperasi in Pembangunan Jangka Panjang (PJP) I, have
shown varying success very substantial, both in terms of the number of koperasi,
the number of members of koperasi and koperasi business value. Koperasi
have also been involved and actively participate in the economic activities of the
people and at the same time began to improve the welfare of its members. The
situation is reflected in the increase in the number and variety of koperasi, the
number of members of the koperasi, the number and variety of business fields
koperasi, the number of members' savings, the amount of capital, and the amount of
the value of koperasi efforts. This situation is the result of various policies such as:
a. Koperasi wisdom
b. Wisdom macro, both fiscal - monetary and real sectors, such as credit,
substitution, or protection.
c. Koperasi institution building programs
d. Apprenticeship training, counseling and information, coaching and consulting
e. Koperasi research activities
According with national development stages in the Pembangunan Jangka
Panjang (PJP) I, the government's role in the development of koperasi in those
days it was still great, especially there are activities that are pioneering and other
economic activities which are not yet fully capable executed by the koperasi
movement. Wisdom fostering koperasi, since the Rencana Pembangunan Lima
Tahun Pertama, efforts prioritized to support the success of the national food
procurement program through KUD, which is supported by crediting the procurement
of food along with the provision of loan guarantees which then has a big contribution
to the achievement of self-sufficiency in rice since 1984.
In the agricultural sector, the field of koperasi efforts also helped develop
both agriculture and non-farm enterprises, such as the food industry, fertilizer
distribution, marketing copra, clove marketing, milk marketing, marketing of fishery
products, livestock, mining folk, folk crafts, fuel distribution , the distribution of
cement, business apparel, metals and mining industry business people, marketing
services, marketing of rural electrical services, penyaluran kredit candak kulak
(KCK), penyaluran kredit tebu rakyat intensiikasi (TRI) and others.
Then, there are also some organizations that houses the koperasi movement,
namely Dewan Koperasi Indonesia (Dekopin), which serves as a place of struggle and
innate aspiration for the benefit of the koperasi movement. In addition, during PJP I
has also been established infrastructures for PJP II such as:
a. Institut Manajemen Koperasi Indonesia (Ikopin) and Akademi Koperasi
(Akop)
These two institutions are educational institutions to undergraduate koperasi
development cadres who are experts in the field of koperasi management.
b. Koperasi Jasa Audit (KJA)
Koperasi Jasa Audit have been spread over twenty provinces and serves as a
center for audit services, guidance and management services, as well as
training services.
c. Koperasi Asuransi Indonesia (KAI)
Koperasi Asuransi Indonesia functioning services in the field of insurance.
d. Perusahaan Umum Pengembangan Keuangan Koperasi (Perum PKK)
Perum PKK services functioning of the financial sector which is a refinement
of the Lembaga Jaminan Kredit Koperasi (LJKK) and serves to provide
collateral for a loan to the koperasi granted by banks.
e. Bank Umum Koperasi Indonesia (Bank Bukopin) and other financial
institutions, such as the Koperasi Pembiayaan Indonesia (KPI), Koperasi Bank
Perkreditan Rakyat (KBPR), and Koperasi Simpan Pinjam (KSP).
Nevertheless, the development of koperasi during PJP I was still far from
perfect, the various fundamental weaknesses still characterize the koperasi. The
fundamental weaknesses eg: managerial weaknesses, the weaknesses of human
resources, capital weakness, and the weakness of marketing. Implementation of
koperasi development in PJP II is expected to be further improved, so that in
addition to the koperasi grew into a healthy company and a strong role in various
aspects of national life can be improved as well. Implementation of koperasi
development in PJP II era mostly relies on increased productivity and creativity of
human resources, and the creation of a healthy business climate for koperasi
development on the other. In order to be proactive, koperasi are required to have
the formulation of a clear strategy. That is, in addition must have a purpose and goal-
oriented business in the future, the koperasi also required to formulate appropriate
strategies to achieve those goals and objectives.
In connection with the matter, some of the main objectives of koperasi
development to be taken by the government in PJP II era are as follows:
a. Business development
The development of cooperative efforts with more emphasis on increasing the
ability of cooperatives to create uasaha field and take advantage of business
opportunities that exist.
b. Development of human resources
Cooperative human resource development, in relation to the challenges faced
by the cooperative in the future is a major problem. Therefore cooperatives
should be able to anticipate the pattern of education and training of human
resources that best suits the needs of development.
c. The role of government
The government in collaboration with the cooperative movement has always
sought to play a role that encourages the development of cooperatives. The
role of government is required to hold coaching to develop the initiative and
creativity of the community.
d. International cooperation
International cooperation in the field of cooperative done for example in the
form of exchange of experts cooperative with other countries.
Besides that other important things in the development of koperasis in the
Pembangunan Jangka Panjang (PJP) II is Law No. 25 of 1992 concerning
koperasis which provide a strong legal foundation for the development of
koperasi in line with the development in other sectors in an effort to build a
koperasi which developed and independent. In principle, the law's new koperasi
provide greater flexibility to the koperasi movement to determine the direction of
business development in order to further suit the needs and interests of the members.
In addition, the government provides guidance, convenience, and protection in the
framework of the koperasi independence.
So, the koperasi development is absolutely necessary in an effort to build a
national economy because it is mandated by the constitution. In addition, the
koperasi is also the most appropriate forum to raise the economic power of the
people in order to realize economic democracy. Therefore, the development of
koperasi is the duty and responsibility of the people and the Government, which
must be implemented in order to foster progress and independence of peoples and
societies Indonesia.

2. CHALLENGES, OBSTACLES AND OPPORTUNITIES IN

DEVELOPMENT KOPERASI
2.1 Challenges in Development Koperasi
Although many of the results that have been achieved in the
development of koperasi for Pembangunan Jangka Panjang (PJP) I, there
are still many unresolved issues, which should be continued and enhanced
handling in the Pembangunan Jangka Panjang (PJP) II, as a challenge to
realize the ideals of koperasi as mandated in the UUD 1945. The challenge
as follows:
a. koperasi into enterprises develop a healthy, strong, advanced,
independent, and competitive so as to improve the welfare of its members
which leads to increased national economy.
Due to a variety of economic and non-economic reasons, koperasi in
general have not been able to fully implement the principles of the
koperasi who have aspired, so the koperasi as a business entity and a
popular economic movement has not been able to develop fully the
potential and ability to advance the national economy and improve the
welfare of its members.
In addition, various structural conditions and the existing system still
hamper the koperasi to fully implement the economic principles in order
to achieve and exploit various economic opportunities optimally.
Meanwhile, the opening of the national economy to the development of
the world economy is expected to bring major changes in the order of the
national economy. Business competition will be tighter, the role of science
and technology increases, the demand for qualified human resources to
anticipate and plan for the future increase. The status and the existence of
koperasi increasingly integrated and decisive role in the national
economy.
b. Realizing koperasi, both as a corporation and as a popular economic
movement to be able to contribute significantly in economic activities of
the people.
Having regard to the position of koperasi, either as a pillar of the
national economy as well as an integral part of the national economic
order, the role of koperasi is very important in growing and developing
the economic potential of people. In this case, the koperasi actually have
the space and the vast business opportunities, particularly in matters
relating to the interests of the economic life of the people. But in reality,
koperasis still faces some structural bottlenecks and system to function
and contribute as expected, among others, in strengthening the economy of
the people as the basis of the strength and resilience of the national
economy.
c. Realizing koperasi as a popular economic movement rooted in society.
Core strength lies in the koperasi members who actively participate
in the koperasi organization and consciousness of people to join in a
koperasi container. Actually, public confidence in the koperasi is
increasing, but not sufficient, partly due to the existence of various barriers
to increase the benefits of the koperasi for its members. This has led to
the slow koperasi rooted in society. As people's economic movement,
the koperasi still has to improve its ability to mobilize and to
accommodate the participation of the community at large.

2.2 Obstacle in Development Koperasi

Koperasi development experience in the Pembangunan Jangka
Panjang (PJP) I, have hinted that in order to meet the challenges in the
Pembangunan Jangka Panjang (PJP) II, there are still some problems that
need attention in order to outline the policies and develop programs to achieve
the desired goals. The obstacle are follows:
a. The level of skills and professionalism of the human resources of
koperasi which are generally inadequate. This obstacle is the factors that
affect the ability of koperasi to exercise their functions and roles that
resulted in less effective and efficient organization and management of
 koperasi. This is reflected in the koperasi management and member
participation rate is not optimal.
b. Weak capital structure of koperasi and koperasi limited access to
external capital sources.
c. The limited deployment and provision of national technology for the
koperasi, which affect the poor ability of koperasi to improve the
efficiency and productivity of its business leading to the koperasi
limited competitiveness.
d. Institutional mechanisms and koperasi system that has not gone well. It
is caused by a lack of awareness of members of their rights and obligations
as well as the non-functioning working mechanisms between the board and
between the board with the managers of koperasi as a whole.
e. There is still a lack of trust in working together for the realization of
business networks between koperasi and other economic actors.
f. The inadequate facilities and infrastructure available in certain areas,
especially financial institutions, both banks and non-banks, production and
marketing, particularly in disadvantaged areas.
g. The lack of effective coordination and synchronization in the
implementation of the development program of koperasi sectors and
localities.
h. Lack of awareness and understanding of koperasi, and the lack of
awareness and public confidence in the koperasi, which is reflected in
the low participation and support of the community in the development of
koperasi.

2.3 Opportunities in Development Koperasi

In harmony with the dynamic development and economic growth in
particular Pembangunan Jangka Panjang (PJP) II Reancana Pembangunan
Lima Tahun Keenam, which prioritize aspects of equalization open business
opportunities that can be exploited in the development of koperasi. The
opportunity as follows:
a. Small-scale primary koperasi are expected to come together in a more
stable secondary koperasi, thus further consolidated into a great
 economic power and strong and able to take advantage of the opportunities
opening Indonesia's economy to the world economy.
b. A strong political will from the government and growing demands of
society to build more koperasi in order to realize a healthy economy that
is based on Pancasila and UUD 1945.
c. Economic growth is quite high as a result of continuous development since
Pembangunan Jangka Panjang (PJP) I will also create opportunities for
the development of koperasi efforts in the future.
d. The increasing openness of the world economy also helped create new
opportunities for koperasi, among which is increasingly opening up the
international market for the production of Indonesian koperasi, as well
as opening up opportunities more cooperation international
betweenkoperasi movement in various fields.
e. Changes in the structure of the national economy create opportunities for
the development of koperasi in rural / KUD who tried in agribusiness,
agroindustries and other rural industries. Meanwhile, Law No 12 of 1992
on Plant Cultivation System will encourage diversification of koperasi
efforts in accordance with the interests of local communities.
Pembangunan Jangka Panjang (PJP) II demands on protection and
guarantee of economic and social welfare for workers, who have started to
be felt at the moment, is expected to increase. In addition, it would be
expected rapid increases in the industrial sector which will increase the
number and type of company. This situation creates opportunities for
koperasi growth of new employees.

3 PURPOSE, OBJECTIVE, AND POLICY IN DEVELOPMENT IN THE

KOPERASI
3.1 Purpose of a koperasi Development
A koperasi development as a institution that shade economic of
society activities that aim to become have more skill and ability to become
efficient enterprise and also become strong and deep in society movement so
that can give the prosperous for their members. A koperasi development
also aim to become society economic movement that support by spirit and
high enthusiasm to formed economic democracy based on Pancasila and
Based Law Year 1945.
To form that way, koperasi in village, in the specification, need to
higher their quality and the ability and also increase their contribution in
village economic activity. Function and contribution of koperasi can be
increase through increase the togetherness and more professional in
management. Beside that, active contribution by society in develop
koperasi also must be increase with increase the awareness, spirit, ability
in koperasi in the all elements of society through elucidation, education,
and coaching.
Function and contribution koperasi also become responsibility of
organization that organize koperasi movement as a institution that fight the
interest and bring aspiration in koperasi movement that cooperation with
government as coach and patron. koperasi development support through
give chance to running the business in the all sector of economic, and create
good business atmosphere and easier to get capital.
To develop and protect the society business that held in a koperasi
institution for society interest, can be settled economic activity that only
doing by koperasi. Economic activity in the area that has been success the
koperasi there, the all elements have effort to prevent another kind of
business entity to participate the business activity although with keep the
awareness and national economic interest to spread business evenly and give
job opportunity.
Cooperation between each koperasi, between koperasi and
national enterprise and private entity as a business colleague develop as a real
for create spirit and kinship principle, togetherness, business colleague and
solidarity and also support and can get benefit each others. koperasi
potential for growth become big scale business still increase and develop,
such as through wider koperasi business spread, and also business related
with upper and lower business activity.

3.2 Objective of koperasi Development

GBHN in 1993 settled target of koperasi in Pembangunan Jangka
Panjang (PJP) II is formed a koperasi as a business entity and also become
 society economic that health, strong and autonomous and also become one of
based national economic support in the all kinds of national economic
activity, so the koperasi can give major contribution in increase economic
stability and society prosperous.
koperasi development activity in the Pembangunan Jangka Panjang
(PJP) II tend to be in the increase the productivity and creativity in human
resources, and create good business for koperasi development. To become
proactive, koperasi tend to be have good strategic, in this case mean that
koperasi must have aim and objective that also for future orientation,
koperasi also must be formulate precise strategic for reach the aim.
There are main objective for koperasi development that through by
government in the Pembangunan Jangka Panjang (PJP) II, such as:
a Develop the business develop the business stressed in the effort to
increase the koperasi ability in the create job opportunity and also
take benefit from business opportunity
b Develop in human resource develop human resources in the koperasi
related with challenge of the koperasi in the future. koperasi must
be can anticipate education and also human resources that suite with the
needed by koperasi.
c Government act this mean that government cooperation with
koperasi movementalways push the develop of koperasi.
Government must be held the education for develop creativity in the
society
d International cooperation international cooperation in the koperasi
sector such as koperasi expert exchange with another country
So, in the future the prosperous and also competitiveness of koperasi
will be increase.

3.3 Koperasi Development Policy

In the Pembangunan Jangka Panjang (PJP) I koperasi development in
Indonesia has been show good results. Although that, koperasi development
in the Pembangunan Jangka Panjang (PJP) I, have many weakness in the
koperasi such as managerial weakness, human resources weakness, equity
weakness and also marketing weakness.
 Koperasi development activity in the Pembangunan Jangka Panjang
(PJP) II hopely can be increase, so beside koperasi growth become health
and strong business, koperasi also have ability to increase human life in the
nation.
There are many government policy in the development of koperasi in detail,
such as:
a Development as a place that society economic have ability to become
business enterprise that become efficient and become stronger and
deeper in the society
b Function activity and also koperasi act in increase through increase
togetherness and professional management
c Increase the koperasi support by give the opportunity as wider as can
I the all sector of economic in the country or in the abroad, create good
business atmosphere to support the equity
d Cooperation between koperasi and also between koperasi and
national enterprise and also with private enterprise for make real
economy democracy that based on togetherness, business colleague and
also fairness

4 BUSINESS PROBLEMS WITH NON KOPERASI

The problem that face in business and also middle entrepreneur and weak
economic group such as in the equity problem, ability and also skill and management,
form of business and limited the market. Equity problem such as equity resources,
business cost problem, equity spend problem and others.
Financial capital and business expenses can be reach with many sources, such as :
a Personal equity from owner
b Retained earning
c Credit invest from bank
d Loan from third party that get by publish the obligation or others
Fourth of the sources can be used by business for increase their activity, but for
low middle entrepreneur will be hard to fulfill the term of condition that need. This
happen because of low level enterprise usually personal enterprise and not go public.
The problem in less of skill and also experiences in the manage the enterprise is that
second problem that faced by private entrepreneur.
 The enterprise own by family member, so it will make hard to become
professional, and also the skill of production and also marketing also limited. The
going concern of enterprise only based on short term and traditional judgment and also
based on their personal experiences. The problem still in the business structure that
have weakness in the equity and management skill and technique
Small of the enterprise and also how they operate will be obstruct business for
bigger the enterprise include limited the ability to equity mobility but must be increase
the marketing the product. Volume of business that not efficient will be make cost
higher. Marketing problem of production result such as limited in marketing because
limited of equity and tools, low the knowledge of entrepreneur in marketing,
consumption by society and also competitive in the country market and also abroad .

5. RELATIONSHIP BETWEEN MARKET AND KOPERASI

Individuals who have the Economy activities and join in the Koperasi, their
economic activity has been represented by a Koperasi, so Koperasi is related to the
market to fulfill members necessary (discussed in the topic status of Associate
Members). Viewed from the side of production and consumption, Koperasi members
can be grouped into Koperasi Producers and Koperasi Consumers. Relations between
the two sides can be evaluated from the function of Koperasi as companies doing
business transactions with the market, it is necessary to describe the market economic
relations with manufacturers who join the Koperasi and which do not join the
Koperasi.

5.1 Relationships between Producers with Market without Koperasi

This relationship can be described by: Suppose Producers (P) which
produces cocoa will sell their products to the market (Consumer C). in this
case the P and C are not integrated or do not know each other very
well. Therefore, the role of Trader (T) is very strategic to bridge the economic
interests of both parties.
 Figure 5.1 shows that P will sell their production to T or vice versa, T
is buying from P. It is interesting to note here is that, the relationship P and T
is set according to the market mechanism, namely through the forces of supply
and demand. The same thing happened in the T to C where interaction occurs
between them is regulated by market mechanisms. in this case, T and C are
also separated from each other. So the position P, T, and C are mutually
exclusive, so that each has autonomy full in making the best decision for their
self each. Where each party would attempt to gain a stronger position in the
bargaining process. So, T is the market for P, and C is a market for T.

5.2 Relationship between Producers of Koperasi Member with Market

According to the concept of Koperasi, a group of people either as
producers or consumers who have the same economic interests can form a
Koperasi enterprise. The similarity of economic interests is forming a "special
relationship" between the members of the Koperasi with its so-called
Koperasi. The special relationship can be described as follows:

This Figure shows the economic relationship involving three parties,

namely:
 a. Manufacturers or Producers (P1, P2, P3, and so on) are also members of
the Koperasi as an economic unit
b. Koperasi that sell production members
c. Market (consumer C)
Actually producers / members of the Koperasi itself can be related
directly to the market to sell their products, but because of considerations of
efficiency or their economic and noneconomic benefit larger, they are handed
over to the cooperative marketing. Thus, the Koperasi took over marketing or
sales functions previously performed solely by the producers. The next was the
Koperasi interacting or doing business lobby with markets or customers to
market their members' production.
In product marketing members, the Koperasi enterprise and its
members have been tied to the unity of the Koperasi organization. There's
engagement relationship built on togetherness and family in a democratic
environment. Therefore, in the case of the above cooperative relationship with
the company members are not separated absolutely like the relationship P and
T in the first case. Koperasi task is to interact with the market, to market goods
into the production of members of producer Koperasi or by the calculation of
the benefit occurs when the profit will fall in the hands of members of the
Koperasi and vice versa when there is a loss, the losses will be borne jointly by
the members of the Koperasi. Relationships with companies that
market producers, namely cooperatives are no longer regulated by market
mechanisms but governed by the values, norms and principles of cooperatives
themselves because it is produce belonging or cooperative members
together. But the Koperasi relationship with the market (C) is still based on the
relationship of market mechanisms, namely a power struggle to gain
bargaining power.
Based on the concept of Koperasi from several different sources,
especially the "Cooperative Management Indonesia (Sudarsono & Edilius,
2002) can be summarized their 3 important relationship in a cooperative
environment, namely ownership, service relationships and market relations.
 1. Market relations
In principle, according to market economists even more emphasis on a
meeting between demand and supply. Demand is planned number of products
demanded in a certain time period, while the offer is a product plan that will be
offered in certain periods. If the request was met with an offer, it will display a
new concept in the form of price or quantity of products traded. Markets are
grouped into five types, namely goods market, labor market, money market,
capital market and foreign markets. These five types of these markets can be
exploited cooperatives as a useful resource for the growth of the Koperasi.

1.1 The Goods Market

Goods market is a meeting between demand and supply of
goods. Koperasi can move in the market by offering goods of Koperasi
production or members and can also perform demand for
products required by Koperasi or members. In the market of goods,
products - products sold Koperasi would compete with products - other
products of its competitors. The task of Koprasi management in this
respect is to win the competition. At least two things are needed to win
the competition, namely:
Koperasi should offer special advantages not possessed by its
competitors.
Management must be able to motivate their members to participate
actively in
the cooperative.

1. 2 Labor Market
The labor market is a meeting between supply and demand for
labor. This meeting will produce a concept of wages and the amount of
labor needed. Koperasi as business entities also need workers for its
operations, which means that regardless of the labor Koperasi
membership. The main task for administrators in the labor market are
recruiting workers and place them according to their expertise, and
provide proper incentives for the labor force. In addition, the Koperasi
board should retain the existing workforce premises path provides an
opportunity to develop. Koperasi should wherever possible lower levels
of labor turnover to improve work efficiency.
In the labor market Koperasi will also compete with its
competitors in order to recruit qualified labor. For the least cooperative
must:
Provide incentives are relatively better compared with its competitors
Providing career development opportunities are relatively better
compared with its competitors.

1.3 Money Market

The money market is a meeting between demand and supply of
money. In the money market transacted is the right to use the money for
a certain period. So in the money market will happen lending and
borrowing of funds, which in turn relationships debts.

1.4 Capital Market

In a narrow sense, the stock market is synonymous with the stock
exchange. But in a broad sense the capital market is a meeting between
those who have the funds to those who need funds for capital. For the
Koperasi itself, entering the capital market is a phenomenon that is rarely
done, because the Koperasi is not a collection of capital but a collection
of people - person or legal entity cooperative.
In this context does not mean the Koperasi is not allowed to enter
the capital market, it could be a Koperasi to buy letters - securities in the
capital markets if there is idle funds and temporarily can not be invested
into the production process in Koperasi business unit or business unit
members and purchasing decisions shares was approved by the members.

1.5 Overseas Markets

Overseas markets illustrate the relationship between domestic
demand and supply of imported products in the country will export
products.
 In the framework of Koperasi development, the government
strongly encourages Koperasi to move in overseas markets, which means
carrying out import-export activities.
Some Koperasi have entered into export activities, mainly
Koperasi that engaged in handicraft industry.

6. STRENGTHS AND WEAKNESSES OF COOPERATION IN THE

MARKET SYSTEM
Koperasi as part of the overall market, the Koperasi will compete with other
companies that are not Koperasi. Koperasi should be able to use the strengths you
have, is able to look for opportunities to increase growth, take advantage of existing
opportunities and improve the weaknesses that exist in the body of the cooperative.
6.1 The strength of Koperasi:
1. The establishment of cooperative has a clear legal basis and strong. So the
cooperative is a type of business that already has a legal basis in the formation.
So that the legal form of cooperatives is very strong. On appeal to the
individual business.
2. The existence of shared responsibility among members. Koperasi done in a
way that a minimum group of cooperative members is 20 people. So any loss
of cooperatives in the responsibility shared by all members of the cooperative.
Likewise with the cooperative business activities undertaken by all members
of the cooperative. Thus koperasi will grow faster in the business.
3. Each member has the same rights and obligations in the life of cooperatives.
Members of the cooperative have the same rights and obligations, either in the
right to choose the caretaker or supervisor cooperatives and deposit liabilities
in the cooperative capital. And also in savings deposits. Unlike the PT is based
on the percentage of share ownership.
4. The existence of transparency in the management, because there is a principle
of, by, and for the members. All the activities of cooperatives reported
transparently to the cooperative Rapat Anggota Tahunan or RAT. Nor
extraordinary meeting of members if there are special events that urgent
6.2 Weaknesses of Koperasi:
1. Cooperation shall be deemed economically profitable. Because the cooperative
principles that familial cooperatives are economically less profitable for the
board and its members.
2. Public interest to become members of the cooperative are low. Many people
who do not know the benefits of cooperatives so they are reluctant to become
members of the cooperative.
3. Most of the members come from the middle to the bottom, so that cooperatives
often associated with low standard of living. People who have the capital
rarely interested establish cooperative. they prefer to establish PT or CV
4. Support governments and financial institutions to promote the cooperative is
still less than the support given to the form of another business entity. Many
Banks who have not believed to provide working capital loans to cooperatives
for fear they can not return the loan.
5. In general, the cooperative is still difficult to develop, because there is no
formation of a cooperative network with other business entities entities. Many
cooperatives stand-alone. do not want cooperation with other cooperatives.
This is usually because of the reluctance of the Board to synergize with other
cooperatives. because they think other cooperatives in the area they are rivals.
6. The emergence of many cases of fraud in the management of cooperatives
reason people are interested in becoming members of the cooperative. Many
administrators and managers who embezzled funds from cooperative members
so that people no longer believe in the cooperative.

7. KOPERASI ORGANIZATION IN THE MARKET STRUCTURE

7.1 Koperasi in The Perfect Competition Market
Perfect competition market is the most suitable market form used in the
organization or company. Because, in a perfectly competitive market there are
many benefits to be taken into consideration in making a planning analysis and
also have the ability to allocate resources optimally. The Characteristics structure
of perfect competition market:
a) The total of producer/ entrepreneur/ seller are very much and the volume
of their business only small proportion from volume of kind goods in the
market. As a result, although the company producing the maximum
 amount or not, the market price will not be influenced. So price can not be
determined only by a single seller and single buyer.
b) The products sold are homogeny. The buyer consider the production of a
company is same by with other companies. The assumption of
homogeneity of the product has several important conclusions :
The companies will not be motivated to perform non-price
competition (ex: advertising) because the resulting product is a kind
/ Identic and buyers know it. Non-price competition will make a
company does not have excess market.
Individual company can not affect prices because the company is not
a determinant of price however, it accept the price that formed in the
market. So company may sell any output at market price
c) Theres no barriers to enter the market for the source and the sellers, they
are free to exit or enter the market. This assumption can guarantee the
efficiency of performance for companies in free market competition and
lead the production factors move freely from one company to another.
d) The buyers and sellers have complete information about the market, the
price structure and quality of goods. The information is easy to get and
dont need big cost.
The koperasi management must understand the market characteristic, so
in the identification, constituent goals, objectives, strategies and tactics of
business in entering the free market would be better. From the characteristic can
conclude several things:
a) Total revenues of koperasi are only determined by the number of
products sold because of the constant price
b) The market price can not be controlled by koperasi or other individual
entrepreneurs.
c) Changes in market prices only occur because of changes in market
demand curve or the changes in market supply curve or both.

7.1.1 Short Term Analysis

A. The Koperasi with Managerial Capability Same As The
Competitor
 In perfect competition, a koperasi has no effect in
controlling prices. koperasis can sell any product without
affecting the selling price. By following the pricing rules AC =
MR = P = D, then the only difference between koperasi and
company is that koperasi can sell more quantity at the same
price level. Therefore in the short term, if the members buy goods
there will be no advantage for members compared with buying on
the free market.
B. Koperasi with Managerial Capability Lower Than
Competitors
In a perfectly competitive market, a koperasi with a lower
ability means:
a) The average cost curve is above the sale price, or
b) Costs incurred koperasi higher than the market cost.
In these conditions throughout the koperasi still able to
cover the variable costs, the koperasi was able to carry out its
activities, with hope in a long time koperasi can erase those
losses. However, these conditions will make it difficult for the
koperasi because koperasis have to compete with efficient
nonkoperasi companies.
The most koperasi that have this case is a koperasi that
are in the initial phase, it is because management has not
experienced. In the short term the poor performance koperasi
can operate if their production do not occur loss. koperasi will
be able to sell a homogeneous product at market prices (P1) as
the nonkoperasi company. Sales only done up to output
achieve the quantity at Q1, more than that koperasi will get
losses.
C. Koperasi with Managerial Ability Higher Than Competitors
A koperasi with a higher competitive level can produce
output at a lower cost than its competitors. When the koperasi
set the prices in accordance with the principle of maximizing
profit, advantage that can be achieved by the koperasi will be
greater than the company's competitors because it can sell more at
 a price that equal with the price of its competitors. But the
advantages of the koperasi will be reduced over time.
koperasi will produce more to fulfill the demand of members,
when the production level has been reached, the koperasi is not
able to provide its members more advantage.

7.1.2 Long Term Analysis

Hendar and Kusnadi (2005: 138-141) in microeconomics, the long-
term is defined as a long enough period, so companies (includingkoperasi)
can change the input equipment. So, in the long run all inputs are variable. In
analyzing the comparative performance of koperasi in a perfectly
competitive market in the long term, will be classified being three cases.
A. Koperasi with Managerial Capabilities Same As Competitors
In the long term balance of a company achieved when LRAC
= MC = P = AR. So, in a perfectly competitive market, long-term
equilibrium achieved in this condition.
B. Koperasi with Managerial Capability Lower Than
Competitors
In these case the average cost ofkoperasi is greater than
the average cost of a competitor, so the koperasi will not
succeed survive. The market price will touch on the long term
average cost curve at the minimum point. Because koperasi are
only a minor player in the market, then in the long term they can
not affect the price. koperasi can not give their members
higher price than its rival. Finally with the higher cost, the
koperasi will get losses.
C. Koperasi with Managerial Ability Higher Than Competitors
Koperasi that have higher managerial capabilities may
exceed its competitors through two strategies namely:
Providing goods at a lower price.
Provide the same price as competitors and then dividing the
SHU (patronage refund) to their member.
 Koperasi can maintain a competitive advantage in the
long term only if they can reduce ongoing expenses at a faster
rate than permanent Koperasi competency.
It can be concluded that in a perfectly competitive market in the short term
koperasi will not have a comparative advantage in determining the selling price
and just might have the advantage in providing indirect benefits (SHU) to its
members, therefore the price competition is not suitable to be applied by
businesses including co-operatives in a perfectly competitive market. To obtain
greater profits, the koperasi must be competitive in terms of costs such as the
cost of production

7.2 Koperasi in The Monopolistic Competition Market

Monopolistic competition can be defined as a monopoly competitive
market. So the market of a product can be said to exist in monopolistic competition
if in the market there are competition and characteristics of monopoly. The
characteristics of monopolistic competition market:
a. There are many sellers
b. The products are diverse (heterogeneous)
c. There are the substitute goods
d. The sales promotion competition is very active
e. To enter and exist the industry is relatively easy
f. The price in the all market is not same based on the seller.
Monopolistic market competition is a mixture of perfect competition with
monopoly markets so to determine product of a company does tend towards perfect
competition or monopoly depends on product differentiation that produced by the
company with substitute products produced by other companies. Smaller
differentiation, it is more direct to a perfectly competitive market. Conversely
bigger differentiation, its more direct to the form of a monopoly market.

7.2.1 Short Term Analysis

A. Koperasi with Managerial Capabilities Same As Competitors
A koperasi that aims at maximizing profits will operate at
MC = MR. If there are substantial profits in a koperasi, the SHU
(patronage refund) can be shared. At the time of earned income, the
 new members would be interested in joining the koperasi, so that its
output will increase. In the short term, if the koperasi with the same
ability enter monopolistic competition market, the cost curve is
considered equal with cost curve of competitors. In this condition, the
koperasi can set different pricing strategies.
Koperasi with the same capabilities with competitor, can
provide a clear price advantage for its members compared to the
market. Additional short-term benefits obtained if the service that sold
is something new for members (ex: fertilizer in developing countries)
due to the elimination of the effects of the monopoly, the koperasi is
not only selling goods at bargain prices, but also in great numbers, in
terms of new input. Thus, the innovation that done will be easier and
more profitable.
B. Koperasi with Managerial Capability Lower Than Competitors
If the managerial capabilities of koperasi is lower than
private companies, the koperasi will still be able to provide better
services to members throughout the average cost curve cutting function
of demand at a point that lower than the price asked by the private
company. Even in the short term, the gap this ability will not hamper
the comparative advantage of koperasi
7.2.2 Long Term Analysis
A. Koperasi with Managerial Capabilities Same As Competitors
In the long term koperasi with the same capabilities engaged
in the monopolistic competition market will not have a competitive
advantage with its competitors. Its market share is too small to have a
direct impact to other sellers. Private profit will attract new players to
enter the market. As a result, demand will be gradually reduced. New
competitors will not enter again when the entire profit has been
exhausted and the company in a long-term balance. In this case, the
koperasi will not be able to provide service superiority to its
members. This situation is same as the long-term analysis on a
perfectly competitive market
B. Koperasi with Managerial Capability Lower Than Competitors
 Its more difficult to examine koperasi with a lower ability in
monopolistic competition. When the demand function is equal to all
market players, higher cost producers will not be able to compete
because of the function of demand will be lower than the long-term
costs. Koperasi will produce in the loss condition. Every
manufacturer is a small monopolistic. Besides in this case the
koperasi or the competitors can affect demand through advertising
or sales promotion
So If the koperasi wants to maximize its profits in a monopolistic market
structure, the koperasi must be able to produce different products compared with
products produced by other companies. In addition to the strategies and tactics of
business in the promotion also has an important role. The strength of the
koperasi in determining the price of the product will be even greater if the
product is more directed to the monopoly market. Besides in the long-term,
koperasi superiority tend to diminish. Koperasi will require a level of
performance at least equal to its competitors when it wanted to survive.

7.3 Koperasi in the Oligopoly Market

Oligopoly is a market structure in which there are only a few firms (sellers)
that dominate the market, either independently (individually) or tacitly
cooperating. Therefore, only a few companies in the market there will always be
obstacles to entering the market. Many koperasis in local markets that have
integrated vertically or markets where larger companies that have been established
are still very limited. This shows the koperasi is structured oligopoly market,
the market structure there are only a few sellers who lead activities that the seller
has an important role for other sellers. Vertical integration is carried out by a
koperasi company in addition to improving the efficiency of the company, also
avoid the intense competition between the sellers .Competition among multiple
sellers (oligopoly) will vary with competition among many sellers (perfect
competition and monopolistic competition), because the limited number of sellers
will lead to interdependence among sellers to one another, so that every decision
of each seller will largely depend on decisions other sellers.
 Characteristics of Oligopoly Market
a. There are some sellers / producer that dominate the market
b. Goods traded are homogeneous
c. Theres strong barrier for companies outside the market to enter the
market
d. One among the oligopolies is a price leader
The goods produced by an oligopoly:
a. Standard goods, often found in an oligopolistic industry that produces
raw materials (aluminum) and raw materials (cement, building
materials)
b. Different shades goods (differentiated product), generally found in
industries that produce final goods (cigarettes, shampoo)
Excess Market Oligopoly
a. There is little sellers because it requires a large investment
b. Because little sellers so they can control the price
c. In the event of price competition, consumers can get benefit
Weaknesses Market Oligopoly
a. There is a strong barriers to entry to the market because they
oligopolyhigh investment
b. There will be a price war
c. Manufacturers can koperasi (Cartel)
Cartel is an official agreement between several companies in an
oligopoly. The agreement set a price that will be charged to all
companies and often impose quotas or market shares of the various
companies. Cartels are illegal in most countries of the world. OPEC is
a major example of a cartel. He was raised because he is beyond the
control of individual countries
The properties of an oligopoly market:
a. The price of the products sold are relatively similar
b. Superior product differentiation is the key to success
c. It is difficult to enter the market because it takes a great resource
d. The price changes will be followed by other companies
 Koperasi do vertical integration with other companies, with the aim of
improving the efficiency of the company, as well as to avoid fierce competition
between sellers. Heflebower (1980, 29) found that many entry performed by
vertically integrated koperasi, occurs in local or regional markets, where
companies that have advanced only a few are doing it.That is empirically, many
koperasis established or appear in an oligopoly market structure.
Koperasi Strategy in Oligopoly
Two basic strategies for the koperasi use price as a parameter of
activity and non-price competition (through the reduction / cost reduction,
product differentiation, quality, and etc.). A koperasi can use active
price competition in an oligopoly market. Prices may be reduced in large
enough quantities.
If a co-operative follow pricing rules (AC = AR), koperasis can
drastically gain profit competitor. With the pricing policy of active
koperasis,koperasi creates a strong incentive for competitors to
sweep the entry of new koperasi.
a. The decline in prices that are Predator
koperasi new entrants to the market will compete with other
companies that are already established. Therefore, the koperasi had to
do with the price policy of price reductions that are 'predatory', that is
selling a product at a price below the average, despite the loss. Losses
will be covered by the monopoly profits as a stacked during times of high
prices before the prakoperasi
b. Price Leadership
One form of conspiracy (collusion) is not authorized. This happens if
the price of a company changes, it will be followed by other companies
in the market. Type Price Leadership:
i. Leadership by a company at a low cost assumptions:
There are only two companies in the industry, one of them
koperasi.
Their market share quietly with each earn half of the market there.
The resulting homogeneous product.
One company has lower costs than others.
 ii. Leadership by a large company (dominant)
Large companies set prices for their products and allow smaller
companies to use the same price in selling their products.
Koperasi not only promote their members, but also all the services of the
koperasi product concerned.
Price Reduction "predatory"
Reduction in price "predatory", is selling products at prices below the
cost of "Total average" koperasi are ill-equipped by the financial
resources can be excluded from the competition, prices can rise again, as
well as temporal loss can be replaced by a supra-normal profits
(monopolistic) again. koperasi effect on active pricing policy will be
zero.
Price leadership
If the koperasi is managed for the benefit or the benefit of members,
the koperasi may use more methods has its own characteristics to
optimize its members as paying SHU (patronage refund) as well as provide
additional services better (using non-price competition).
One way to prevent destructive price war koperasi, is to 'follow the
leader (price)' in selling. Leadership is another form of price collusion. It
occurs when the price changed by a company which was then followed by
other companies in a market; There are some companies that lead the price:
If the price leadership to introduce companies to participate in
optimizing profit, it will be easier for new companies, especially for
koperasi which are not profit-oriented, to enter the market. Since a long
time, as long as the price leader did not lose power and position by the
koperasi enters the market, it may be tolerant of new competitors, for
koperasi to follow the price leader.
It would be a rational strategy for koperasi to follow the lead of the
price, if the koperasi entered the market with a higher initial cost, or
low. For most koperasi are entering the market, this may be an
assumption that is very real.
 Barriers Sign For koperasi
Oligopoly assumes newcomers who entered the restricted / limited.
Without barriers to entry, new competitors will enter the market and the
industry would tend to approach perfect competition (with products that
are homogeneous)or imperfect competition (homogeneous products).
Barriers to entry for new firms into the market oligopolistic or
monopolistic markets consist of several forms:
a. Penalties government law (patent, quota, a monopoly / franchise),
b. Size is limited on market demand and economies of scale (only one /
some companies who may be able to generate profitability in a limited
market),
c. Prices were limited.
For koperasi, three forms of the latter may be the most serious
obstacle to entering the market oligopoly (or monopoly). Due to a lack of
capital and / or managerial and technological capabilities are low
(expertise, technical knowledge, and experience less), then the cost curve
will be under the koperasi cost curves that have been developed in the
market. Therefore, potential entry of koperasisin such cases will not be
considered seriously by the companies.
The difficulty of recruiting koperasi management personnel who are
experienced, are already widely known. Their capacity to pay higher
salaries in an effort to attract managers from other companies,can not be
done in some conditions of the koperasi because financial resources are
less able and interesting career opportunities seem cannot be met by the
koperasi, for professional managers. The new companies generally and
koperasi in particular, must pay a higher interest rate for acquisition of
financial resources needed for the formation of the company.
Koperasis that have similar capabilities, will more easily enter the
market oligopoly, because:
a. The members are more likely to contract with a company owned its
own.
b. The members will be more willing / Outdoor provides important
information on market conditions that are beneficial for the
 management in improving the quality of products, advertising, and
reduce the cost of operations.
c. The relationship stronger intercompany loyalty members and between
members and management

7.4 Koperasi in the Monopolistic Market

Monopolistic market is one of the market where there are many manufacturers
who produce goods similar but differ in several aspects. Sellers on a monopolistic
market is unlimited, but each product definitely has its own character which
distinguishes it from other products. Examples are: shampoo, toothpaste, etc.
Although the functions of all the same shampoo to clean the hair, but each product
different manufacturers have particular features, such differences in aroma, color
difference, packaging, and others.
In a monopolistic market, manufacturers have the ability to influence prices
although the effect is not as big as producers of market monopoly or oligopoly.
This ability comes from the nature of the goods produced. Because of the
differences and characteristics of a product, consumers will not easily switch to
another brand, and still chose the brand despite producers raise prices. For
example, the motorcycle market in Indonesia.
The characteristics of a monopolistic market are:
a. There are a lot of sellers / producers working in the market.
b. Goods are traded is a differentiated product.
c. The seller has market power of oligopoly.
d. Seller or entrepreneur of a product is a lot, as well as the types of
products are various. The products offered are not the same in all
respects. As a result, the determination of the purchase by the
consumer depends on who is selling the product. Here, companies are
encouraged to be bound by non-price competition, for example
through advertising and other types of promotion, because the
products are not similar and buyers or consumers do not know.
e. There are substitute products. Its use can be replaced completely by
other products. There are other similar products that can provide the
same satisfaction.
 f. Exit or entry into the industry is relatively easy. The product price is
not the same in all markets. But it varies in accordance with the
wishes of the seller, because the seller or entrepreneur in this market
is much that consumers have to adjust in terms of "price".
g. Employers and consumers of certain products equally competing. But
the competition is not perfect, because the products are not alike in
many ways. Product entrepreneurs which will occupy a monopolistic,
is determined by the consumers of the product and not the gardener.
To determine the shape of the market of a product the company, is
dependent upon differentiation (differentiation) of the company's
products are produced with substitute products produced by other
companies. The smaller / little difference, then it is more likely to
perfect competition. Conversely, the farther the distance difference is,
the more inclined towards forms of monopoly market.
Therefore, if the koperasi wants to maximize its profits in a monopolistic
market structure, then theoretically, the koperasi must be able to produce
products which are very different to those produced by other entrepreneurs.
Certainly the strategy and tactics of business in the sale, in a very decisive for the
difference.
If koperasi wants to get the maximum profit in monopolistic market ,based
on theory koperasi must produce the product which has the high differentiation
than other producer. Certainly the strategy and tactics of business in the
promotion, the decisive difference.. So, the total revenue which get by the
koperasi in the monopolistic market is different from the perfect competitive
market. If TR = H1Q, TR depend on price (H1) and the quantity of product
produce (Q). The strength of koperasi in determine the price will be higher if
their product head for the monopoly market form.
 REFERENCE :
Partomo, Tiktik Sartika. 2009. Ekonomi Koperasi. Bogor: Ghalia Indonesia.
Sitio, Arifin dan Halomoan Tamba, 2001, Koperasi Teori dan Praktik, Jakarta:
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