The quest for leadership qualities in cooperative societies: An exploratory analysis

Abstract

Successful leadership is imperative for a cooperative to flourish. However, there is limited literature concerning leadership qualities in the context of cooperatives, most particularly in cooperatives in the global south. This study applied the participatory Delphi research technique to identify effective leadership qualities in the context of community-based cooperative societies in rural Nepal. A survey of 1255 leaders and team members from 210 cooperatives was undertaken and the qualities of leadership were obtained by using explorative factor analysis. The results identified four dimensions of effective leadership: Role Model, Empowering the Team, Performance-based Rewards, and Skills of the Sector. These four dimensions, unified in the 'REPS' Model of leadership, are presented as a contextualized model of cooperative leadership that can serve to inform both further research and cooperative development practice.

1. Introduction

Leadership's role in organizational success has been hotly contested in recent studies [1]. Empirical examples around the globe have shown that some organizations stand out from the crowd, winning the competition, and growing while others are declining in a similar environment [2]. Among others, effective leadership is considered one of the key factors that contribute to the healthy growth and success of an organization [1]. Varied opinions are found on the characteristics of a successful leader. Leadership characteristics effective in one type of organization and situations may not be suitable for others. Therefore, several studies have been conducted in the leadership field, to explore the relationship between leadership qualities and organizational effectiveness [1] (see Fig. 1).

Fig. 1.

REPS model of an effective leader.

Researchers examined the traits of effective leaders to identify the characteristics of an effective leader [1,2]. The trait theory leadership study indicated that the effectiveness of a particular trait depends on the situation, types of followers, and the external environment. Scholars did not identify universal traits important to successful leaders [2]. Then the research on leadership shifted to a behavioural approach [1]. The behavioural approach of leadership found that situations and contexts have important roles to make a leader effective or ineffective. The different contexts and organizational values and principles demand special leadership qualities. Leadership qualities effective in private firms may or may not be suitable for cooperative societies and other types of organizations.

Past studies that explored the relationship between leadership qualities and organizational effectiveness [1] tend to focus on corporate models operating in developed economies and are often of uncertain relevance to less developed economies and social enterprises such as cooperatives. To date, only limited effort has been made to study leadership in the context of cooperatives in Nepal and globally [3]. Although leadership is a highly researched field, this is still a less researched area in the cooperative field in general and the Nepalese cooperative sector in particular.

Unlike conventional investor-owned firms, the distinctive identity and structure of cooperative is that it is an association of people, united voluntarily to meet their common needs through a jointly owned and democratically controlled enterprise [4]. The cooperatives are associations of people rather than capital and often require quite distinctive approaches to leadership. In this distinctive organizational model, there are obvious reasons to question the relevance of the conventional leadership archetypes promoted in the Western corporate context such as the Heroic Individualist or Charismatic Leader [5]. A common assumption is that more collaborative, team-based approaches to leadership would be most appropriate in member and community-owned enterprises such as cooperatives. However, there is a significant research gap on the characteristics of successful leaders in cooperative societies, most notably in the Nepalese context. To this realization, this article attempts to explore the characteristics of an effective leader in Nepalese cooperative societies.

The purpose of the study was to identify leadership qualities that drive the performance of cooperatives. This article presents a preliminary exploration of the characteristics of an effective leader in the context of a select set of cooperative societies in Nepal. The cooperative sector was selected in the study as the sector is an important economic and social actor most particularly with regards to providing access to affordable and accessible goods and services to marginalized communities in Nepal and the contribution of cooperatives to the national GDP is estimated to be 3% of the total, and Nepali cooperatives serve 6.5 million members (approximately 20% of the national population) and provide direct employment to 68,400 employees [4].

Despite above stated achievements, the performance records of some cooperatives have been unreliable and unpredictable. It is estimated that almost half of all registered cooperatives in Nepal are either dormant or ineffective in meeting members’ needs. These performance challenges are not wholly attributable to poor leadership: other studies have highlighted the importance of policy environment and management capacities as key determinants of cooperative success and failure in Nepal [6]. Nonetheless, it is hoped that a better understanding of effective cooperative leadership will in turn result in more effective organizations.

Past studies in cooperatives have indicated that among other factors leadership is the crucial factor behind the success of cooperatives [[7], [8], [9], [10], [11]]. Therefore, this study focuses on exploring the qualities of leadership that help enhance the performance of cooperatives. The study applied the Delphi Method of inquiry to obtain the most reliable consensus across a group of experts on the research topic [12,13]. The Delphi is conducted to understand deep-rooted concepts or social constructs on a particular matter such as characteristics of a successful leader to achieve organizational goals or determinants of leadership qualities and other issues [13]. Therefore, we applied Delphi techniques to develop indicators and questionnaire to measure leadership qualities within the cooperatives. Exploratory Factor analysis was administered to explore and retain valid dimensions and items of effective leaders identified during the Delphi process.

The findings of this study can be helpful to policymakers and practitioners to formulate policies and programs for enhancing leadership qualities and strengthening cooperatives in Nepal. The characteristics of an effective leader identified by this study can be useful to develop a training model and for developing these qualities in cooperative leaders. It is hoped that the findings of this research will be of interest not just to students and academics, but of assistance to the government, donors, developmental organizations, cooperatives, and their networks to formulate appropriate policies, strategies and interventions to strengthen the cooperative sector by enhancing leadership qualities and competency.

1.1. Literature on leadership qualities

Leadership is considered as one of the pivotal determinants of organizational effectiveness [1]. However, there is a continual debate on what qualities of leadership are more helpful to enhance organizational performance. Questions such as: What are the characteristics of successful leaders? Do leaders have innate qualities or leadership qualities are acquired? Is it the characteristics of a leader or followers or situations that make an effective leader, or does the combination of these factors determine the success of a leader? Such questions about leadership have attracted the attention of researchers to conduct studies in this field. Thousands of such concerns on leadership make this field of study complicated as well as fascinating and arouses the interest of researchers and readers alike [2]. In the quest for what makes a successful leader, leadership has become a highly researched topic in the social sciences.

The role of leadership in promoting a prosperous and just society has been acknowledged for generations across a broad range of cultural and religious settings [9]. Nepal is a predominantly Hindu society, where the popular understanding of leadership draws largely from popular Hindu scriptures such as Vedas, Bhagavad Gita, and Kautilya Arthashastra. This tradition emphasizes the qualities of a good leader or king, most notably ethical, truthful, and trustworthy, and serving as a role model to society [14]. Other Eastern traditions, such as Buddhism and Confucianism emphasize the leader as a good and inspirational teacher, leaders do not speak to compel but to inspire and they live by core principles that attract followers and command respect [15]. Eastern traditions and values demand that successful or role model leaders are those who are ethical, truthful, educating, and inspiring.

The scientific analysis of management and leadership did not emerge as a body of knowledge and study until the 20th century [5]. Scientific research in leadership was initiated only in 1920. Initial studies examined the traits of effective leaders [2,16] to identify the dominant components of effective leadership. The early leadership researchers were confident that comparing effective and ineffective leaders could identify the traits essential for leadership effectiveness. The trait theory leadership study indicated that the effectiveness of a particular trait depends on the situation, types of followers, and the external environment. Scholars did not identify universal traits important to successful leaders. The trait approach of leadership studies was not conclusive on the aspects of which traits, behaviors, and skills of leaders are more important than others to enhance leadership effectiveness. The studies on leadership traits indicated that the effectiveness of a particular trait depends on the situation. A person does not become a leader by possessing a combination of some traits [7,17].

The findings of the trait approach of research indicate that the behavior of leaders is more important to determine organizational effectiveness than traits. This prompted research on leadership to shift in the ensuing decades towards a more behavioural approach [10,17]. The behavioural approach of leadership studies investigated the behaviors of successful leaders during 1940. Research findings revealed that the effectiveness of democratic and autocratic styles depends on the types of followers. Ensuing studies focused on the behaviours of a leader and revealed that the effectiveness of democratic vs. autocratic styles, and task-oriented vs. employee-oriented leadership behaviours varied widely depending upon organizational contexts and conjunctures. Therefore, by the 1960s, most researchers abandoned the quest for universal leadership traits and behaviors suitable for all situations.

Between 1960 and 1980, contingency theory dominated leadership studies. The studies explored the effective characteristics of leadership situations. Transactional leadership is appropriate in a stable environment and large established organizations, while transformational leadership is suitable within a turbulent environment [5]. However, the situational approach of leadership is easy to cite; but in reality, if an organization changes its course of action according to every situation, it may never achieve the set visions. Additionally, a particular situation may be favorable to a certain group of people and actions, but unfavorable to others. The situational approach offers a false notion of having to adopt different behaviors depending on the context. Intensive studies are required to understand why some organizations are thriving in a context while other organizations in the same line of business, operating under the same types of contexts, and having similar kinds of employees are on the verge of collapse.

This emerging consensus prompted the next generation of leadership studies to shift by the 1960s toward a more situational approach [5]. Researchers focused on exploring the hypothesis that successful leadership was leadership that adapted and evolved in response to changing circumstances and contexts. Leadership studies sought to identify those traits, behaviours, and skills that enable effective situational analysis and adaptive responses [2]. Some of these have highlighted the need to respond effectively to rapidly changing external environments (in terms of technology, policy changes, market disruptions, etc) while others have highlighted the internal dynamics of organizational processes, human relations, and dynamics [18]. Over time, the nature of effective leadership has come to be understood as the ability to navigate the ever-changing relationship between the external environment, internal organizational capacities, dynamics, and core organizational mission and values. In this context, effective leaders are those who manage and integrate both the task-oriented and relations-oriented dimensions of an organization and strike the necessary balance between the transactional and the transformational leadership approach [5].

In the search for leadership effectiveness, there was an emergence of various theories, such as team leadership theory [1960–1980], servant leadership theory [1970–1980], situational leadership theory [1970–1980], leader-member exchange theory [1975], transformational leadership, and full range of Leadership theory [1985–1990]. Different studies on leadership contributed to the evolution of different leadership theories.

Leadership theories discussed in the above paragraphs such as trait theory, behavioral theory, skills approach, situational theory, transformational and transactional leadership theory, servant leadership theory, team leadership theory, authentic leadership theory, and ethical leadership theory have their own strengths and limitations. As noted above, a particular leadership theory cannot capture different characteristics and behaviors of leadership, and one study cannot incorporate all the leadership theories to understand the characteristics of leaders within high, moderately, and low-performing organizations.

The different leadership theories discussed above indicate that patterns of behavior that are regarded as acceptable in leaders differ from time to time and from one culture to another, but there are surprising commonalities across different leadership theories [5]. The ideal characteristics of leaders such as taking initiative, motivation, self-confidence, integrity, ethical qualities, and serving the public are evident in varying degrees across every society, culture, and in all human enterprises [2,5]. However, a trait effective in one situation or context may not be effective in another. The traits and behaviors of effective leaders prescribed by Western researchers may not apply to Eastern societies, as successful leadership is also a product of specific situations and/or socio-cultural contexts. Therefore, the effectiveness of the characteristics of a leader, and the relationship between leadership qualities and organizational effectiveness depends on the types of followers, situation, culture, and society.

1.2. Leadership in cooperatives

Most studies on organizational leadership globally have tended to focus on corporate or at least to conventional firms. However, it is not obvious that the particularities of investor-owned firms related to enterprise goals, governance, financial structures, and incentives are readily transferable to cooperatives that operate within a quite different framework. While the primary objective of investor-owned private firms is to maximize profit, cooperatives are dedicated to maximizing services to members [19,20] and promoting members’ economic well-being [21]. Indeed, the Statement of Co-operative Identity, as agreed by the International Cooperative Alliance (ICA), provides both the logical starting point and ethical basis for deriving effective cooperative leadership that aligns with cooperative values and principles [22].

The ICA Statement clearly articulates the distinctive nature of cooperative enterprises and their multiple and substantive differences from conventional private firms. For example, the governance of a cooperative is rooted in an ownership and control structure that involves the election/selection of leaders through democratic processes. This redefines the political governance of cooperative enterprises away from focusing on a minority of dominant shareholders to embracing the many [23]. This defining feature of cooperatives is reinforced by the legal nature of cooperative shares, which - unlike corporate stocks – are non-transferable and driven not by economic return but by securing access to services.

Given these significant differences between the two enterprise types, it is reasonable to posit that cooperatives likely pose unique leadership challenges and require distinct leadership skills. Indeed, the cooperative sector itself has undertaken to address this question through the ICA's publication in 2017 of a set of “Guidance Notes” that provide guidance and advice on the practical application of the Cooperative Principles to cooperative enterprise. The primary audience of these notes is defined as “the upcoming generation of cooperative leaders” with the hope expressed that the Guidance Notes will help this new generation to ensure that cooperatives are run more efficiently and effectively. For each of the seven operating principles, the Guidance Notes present a discussion of underlying issues and then suggest both operational guidelines as well as naming emerging and outstanding issues that warrant further attention.

In recent decades, researchers have applied a range of conceptual and analytical tools to address the challenges of leadership in cooperative organizations. The research studies provided a useful turn-of-the-century survey of modern management practices, viewed through a cooperative lens [19,21,24]. The studies highlighted not just the differences between cooperatives and private firms, but also identified the common ground between a new, emerging generation of value-led private businesses and those that subscribe to cooperative values and principles. Nilsson and Hendrikse [25] applied classical sociological concepts to the tension they observed between the associational and enterprise elements of agricultural cooperatives, with their distinct behavioural logics. They posit that Gemeinschaft norms (rooted in interpersonal social relations) dominate within the membership association, while Gesellschaft norms (rooted in more formal organizational structures) dominate the business component. They, therefore, frame the challenge of cooperative leadership as being the task of aligning these two distinct components and logic. This analysis is echoed by Puusa et al. [21] in their critical analysis of the teaching of the cooperative difference in university business texts. This study reaches a very similar conclusion about the dilemma faced in determining how best to reconcile the dual nature of cooperatives wherein the enterprise aspires to address both the economic and social well-being of members.

It has been observed that managing this duality becomes increasingly challenging as the cooperative grows and member engagement becomes steadily more transactional and less value-based or ideological [26]. This scenario is often reinforced by the lack of adequate technical knowledge and skills within the elected board of directors, rendering them unable of providing effective direction to management or vision to the membership. This can often lead to an expansion of the scope and role of managers as they act to fill the perceived power vacuum [23,27]. In such circumstances, strong internal management can ensure the continued business success of the cooperative, but the distinctly cooperative and associational nature of the enterprise is greatly diluted if not wholly compromised [26,28].

More recently, Lamprinakis [29] adopted the notion of “embeddedness” to describe the process by which organizations that do not rely solely on market forces attempt to integrate into decision-making social and cultural factors. Case studies are presented in which two well-established cooperatives faced significant institutional and market challenges, testing the hypothesis that co-operatives have a unique capacity for high degrees of embeddedness, and therefore may exhibit increased resilience in turbulent times. In one case (the Saskatchewan Wheat Pool in Canada), the cooperative undertook a process of dis-embeddedness that ultimately led to its demise.

Novkovic and Power [24] have interpreted the challenge of cooperative leadership through the lens of Jim Collins' construct of “catalytic mechanisms” by which effective leaders align an enterprise behind a chosen strategy. In the specific case of cooperatives, the challenge is to align member commitment and participation behind the cooperative's values and principles, ensuring that they are not only reflected in day-to-day operations but also communicate in terms of how they contribute to fulfilling members' economic, social, and cultural needs.

Others have approached the issue of cooperative leadership somewhat differently, framing it in the model of social movements more than economic enterprises. For example, Wilkinson and Quarter [30] examined rural cooperatives in the Evangeline region of Prince Edward Island (Canada), which has a strongly integrated network of community enterprises. Rooting their analysis in the theory and practice of community leadership and development (rather than enterprise management), the authors highlight the importance of local leadership in fostering three crucial determinants of cooperative success: community consciousness, strategies of empowerment and self-reliance, and negotiating the engagement and support of external actors and structures. Diamantopoulos [31] supplements this analysis in his assessment of the movement-based development of cooperative enterprises, observing how some movements slip into a process of ‘degeneration’ as the movements' social and developmental commitments gradually erode. Only occasionally is this process reversible, through a process of ‘movement regeneration’ – as leaders facilitate a process of re-affirmation of movement goals through diverse educational and cultural interventions, and interventions of institutional intermediaries and networks. The research which focused on cooperation amongst small farmers in Georgia, Moldova, and Ukraine revealed the differences between leaders and members at large with particular regard to their skills in trust building and team building [32]. These skills were considered crucial for building member commitment to the group, though this could be tempered by leader tendencies to dominate groups unduly, as well as a lack of understanding of cooperative principles amongst both leaders and members.

1.3. Leadership in the context of cooperatives in Nepal

Longstanding policies and practices of both government and the development sector endorse cooperatives as an important vehicle for providing affordable and easily accessible services to marginalized communities in Nepal, with a focus on rural (both agricultural and financial) sectors. Cooperatives in Nepal serve an estimated 6.5 million members, provided direct employment to 68,400 employees, and directly contribute 3% of the national GDP [4]. However, a study conducted by the German Technical Cooperation Agency [GIZ] concluded that almost half of the total 35,500 cooperatives in Nepal are either ineffective or dormant [6]. If effective leadership is indeed a pre-condition of cooperative success, this single statistic must surely prompt serious questions about the capacity of leadership of the cooperative sector. While there has been some research to examine the distinctive nature of cooperative leadership in Western economies [3], there is much less research on cooperatives in the Global South and virtually none within the cooperative sector in Nepal. A 1998 study conducted by the Canadian Center for International Development and Cooperation (CECI) revealed that [33] one key leadership dimension of successful savings and credit cooperatives was that of “vision”, the ability of leaders to communicate a vision of their cooperative as a sustainable community-based financial institution. The CECI study observed that [33] the clear articulation of an ambition of growing the often semi-formal, volunteer-based savings and credit group into a formal community-based financial institution served to motivate members and the larger community to pursue and achieve that vision. This attribute of visionary leadership has been confirmed in other Nepali studies [34] and observed in other cooperative contexts [8]. This attribute has often been linked to the charismatic leadership provided by cooperative founders, who frequently graduate into formal leadership positions within cooperatives as board chairs or managers [35,36].

This research initiative was designed to address this issue: to identify models of effective cooperative leadership that could inform the programs, policies, and practices of stakeholders seeking to strengthen cooperative performance, outreach, and impact through enhanced leadership. A strengthened cooperative system in Nepal could make a significant contribution to poverty reduction and national development (11), with a focus on a more dynamic and efficient rural economy. Sebhatu [37] and others [26] and Adriano [38] have observed the extent to which rural cooperatives lack leadership competency due to a lack of educated and well-trained human resources.

1.4. Research methods

This study was designed to begin to address the knowledge gap regarding critical leadership characteristics and qualities required for the success of cooperatives in the Nepali context. Given the distinctive, community-based nature of the Nepali cooperative sector, the researcher sought to apply a participatory methodology that would root the analysis of leadership in the local culture and experience. The Delphi method was therefore adopted as it provides an approach that builds on local social and cultural constructs and is not externally driven by Westernized leadership theory. Indeed, the Delphi approach is often used by social researchers to examine and understand deep-rooted social and cultural constructs.

The Delphi research method is a systematic and qualitative approach that collects and analysis opinions from a group of experts through several rounds of questions and discussion. The method relies on experts who are knowledgeable about a certain topic, working through a multi-stage process to move towards consensus on that topic. It offers to understand deep-rooted social constructs. This technique may be helpful to de-Westernize leadership theory in co-operatives' distinctiveness and Nepali context. It helps to understand how and why leadership is a principal factor in cooperatives in a particular social and cultural setting. Therefore, the Delphi technique was used in the study as it helps identify the underlying dimensions and items (Variables) for measuring leadership qualities of cooperative societies in the Nepali context, and to construct a leadership questionnaire.

In keeping with the Delphi approach [12,13], the research methodology for this study was structured around a set of open-ended questions that explored the nature of leadership qualities in cooperative societies and the extent to which leadership is considered a principal factor in the effectiveness of the cooperatives. The initial set of questions was constructed with the help of a selected subset of leaders in a cooperative society, managers, experts in the field, and literature. These questions were then applied through an initial round of structured interviews with a larger group of experts. Panel discussions with these same experts were then convened to test and confirm the preliminary findings. Information provided by the practitioners and experts was transcribed into text and analysed to identify underlying issues and key elements related to cooperatives' leadership.

This process generated a set of four open-ended questions: (i) What are the factors that determine the success of a cooperative? (ii) What roles can a leader play to enhance the performance of a cooperative? (iii) What are the qualities that facilitate the emergence and effectiveness of leadership? And (iv) What are indicators to measure leadership qualities?

These four open-ended questionnaires were sent to a larger group of 35 experts and practitioners, selected through purposive sampling representing cooperative promoting organizations, training and technical support providers, wholesale credit providers, regulators, and donors. The experts and practitioners were requested to provide written answers via email and 21 responses were received out of a total of 35 questionnaires sent. The written answers received were segregated into different dimensions and items for measuring leadership qualities. The experts and practitioners were then invited for a panel discussion to provide their views on the qualities of effective leaders. The views provided by the experts and practitioners were recorded and used during the process of finalizing dimensions and items for measuring leadership qualities. During the whole process of Delphi research, interviewees provided informed consent.

The research process generated 10 dimensions and 56 indicators with which to measure leadership qualities. The identified items were developed into the statements and sent to 41 individuals including research scholars, and professionals in the cooperatives’ sector for rating and received 24 completely rated statements. The items were rated on the 5-point scale as adequate internal consistency and reliability can be obtained with five-point or more scales [38,39], e. g. strongly agree, agree, somewhat agree, disagree, strongly disagree. Items scoring more than 70% under the strongly agree and agree category were retained [13]. Out of a total of ten dimensions and 56 items, eight dimensions and 48 items to measure qualities of leadership were retained.

1.4.1. Piloting of the questionnaire

A draft questionnaire was developed in Nepali for piloting with purposefully selected cooperatives. During piloting, face-to-face interviews were conducted with 70 respondents representing cooperative staff, board members, and chairpersons to confirm the clarity of the questionnaire. In the face-to-face interviews also, interviewees provided inform consent. The piloting prompted some revision of terminology and structure: some terms that had been translated into Nepali from the literature such as “instilling pride”, “high expectations”, “re-examines assumptions” etc. Were not clear to respondents and required adaptation.

The Cronbach's alpha coefficient was applied to test the reliability of the data. Since the values of all dimensions were more than 0.70, the data collected were considered consistent [40]. The application of the Delphi technique and pilot testing helped to ensure content validity [41].

1.4.2. Respondents and administration of the questionnaire

The cooperative sector of Nepal comprises primary cooperatives of several types such as savings and Credit, agriculture, consumer, producer, multipurpose and others, district and central federations, and the National Cooperative Federation. There has been exponential growth in Nepal's cooperative sector since the liberalization of the Cooperative Act in 1992. By July 2019, there were almost 35,500 registered cooperatives in Nepal serving 6.5 million members, [4]. Most of these cooperatives are urban-based and many serve a better-off class of society. For the majority of cooperatives, financial services are core to their product and service line. To ensure some degree of consistency and cohesion in the study, it was decided to select participating cooperatives from those affiliated with Small Farmers Development Microfinance Financial Institutions (SFD-MFI). These cooperatives are community-based and provide financial services to small farmers and people in rural and remote areas of Nepal. Besides financial services, they provide various services to members such as the collection, processing, and marketing of agricultural products as well as the sale of agricultural inputs.

The 382 cooperatives affiliated with SFD-MFI on July 15, 2014, were considered to be the population for this study, with a sample size of 196 cooperatives obtained by applying the sampling formula of Yamane [42]. After determining the sample size, the first cooperative was picked randomly from the list of 382 cooperatives. Then based on the randomly picked number, every other alternative number was picked. A further 10% sample was added in anticipation of a reduced response rate. Thus, 216 sample cooperatives were selected and questionnaires were sent to 216 of these cooperatives. In the introduction part of the questionnaires, the purpose of the study and confidentiality of the information collected were mentioned. It is also mentioned that respondents may decline not to fill the questionnaires.

In cooperative societies, chairpersons and boards are involved in policy matters and the manager is responsible for mobilizing human and financial resources to achieve the objectives of cooperatives. Therefore, the chairperson and the manager are considered the leaders of the cooperatives. However, their leadership had to be assessed by their team. Therefore, it was decided to send six questionnaires to each of the selected cooperatives. A leadership questionnaire was addressed to the chairperson for self-rating, with two additional board members then reviewing the chairperson's leadership. Similarly, the manager undertook a self-rating exercise that was then reviewed and rated by two staff. Out of 1296 (216 × 6) questionnaires sent, 1255 responses were received. It was a remarkable 96.8% response rate. The respondents comprised Policy Level (210 chairpersons, 417 board members), and Operational Level (209 managers and 419 staff). The demographic variable of respondents is given in Table 1.

Table 1.

Demographic variables of respondents.

Category of Variables	Policy Level		Operational Level		Total
	N	%	N	%	N	%
Gender
Male	359	57	325	52	684	55
Female	268	43	303	48	571	45
Total	627	100	628	100	1255	100
Age
Below 30	44	7	219	35	263	21
30-60	529	84	408	65	937	75
60 and above	54	9	1	0	55	4
Total	627	100	628	100	1255	100

Table 1 gives the details of information about gender, and age of the policy level and operational level leaders of the selected cooperatives. Table 1 shows that female representation in aggregation is 45%, which is lower than male representation (55%) of both operational and policy levels of leadership. The table shows that only 7% of policy-level leaders were below the age of 30, and only 3% of chairperson was below the age of 30. On the contrary, the percentage of operational-level leaders below the age of 30 was 35%. This shows that policy-level leaders largely represent the older age group in comparison to operational-level leaders. Also, this indicates that cooperatives elect matured chairpersons and boards of directors (policy-level leaders) and generally recruit younger managers and staff members.

2. Results

The data collected from the leadership questionnaires were entered into the database and analysed by applying Statistical Package for the Social Science (SPSS) software version 20. Principal Component Analysis (PCA) and the Varimax method of factor analysis were applied to identify the dimensions of effective leadership. In this analysis, items having more than 0.4 loaded values were retained, and items with a lower value were removed. Dimensions having more than three items with at least a 0.4 loaded value were retained in keeping with established practices (43, 44). The rotated component matrix table (Annex-1) lists the 40 items loaded under four dimensions of leadership qualities out of the total 48 items. The last two items shown in the rotated component matrix table are not included as two items are insufficient to consider a valid dimension [43].

In line with the items loaded, the four dimensions of leadership qualities are named as follows: Role Model; Empowering the Team; Performance-based Rewards; and Skills of the Sector. Providing appropriate descriptive titles to dimensions identified through this approach is more of an ‘art’ than a science and reflects the author's best effort to capture and summarize the essence of those items that fall within the dimension [44,45]. For this paper, the four dimensions of leadership are referred to as the 'REPS' model of leadership and proposed as a unifying model of cooperative leadership in the Nepali context.

The result of the correlation coefficient is stated in Table 2.

Table 2.

Correlations of four dimensions of an effective leader.

Leadership factors	Leadership factors and correlation
	Role Model	Empowerment	Performance-based Rewards	Skills of the Sector
Role Model	1
Empowerment	0.858a	1
Performance-based Rewards	0.739a	0.837a	1
Skills of the Sector	0.687a	0.758a	0.772a	1

^aCorrelation is significant at the 0.01 level (2-tailed).

The coefficient of correlation indicates the strength and direction of correlation in the range between – 1 and + 1, the coefficient + 0.6 or more is considered a strong positive correlation [46]. The results stated in Table 1 indicated that all dimensions of an effective leader are highly and positively correlated. A strong correlation (close to 1 or -1) indicates that one dimension helps enhance the quality of other dimensions.

3. Discussion of leadership qualities

The four dimensions of leadership qualities identified by the study are briefly elaborated and compared with established leadership theories and literature.

3.1. role model

The rotated component matrix (Annex 1) identifies a cluster of qualities such as selflessness, confidence, a respected and trusted person of the community, compliance with the code of conduct/rules, promotion of teamwork, collective mission, ethical values, the ability to instill pride, establish a culture of fairness, enhance ownership feeling, and purposeful and optimistic about the future. This dimension of leadership quality is titled “Role Model” as the associated characteristics fit with the image of an ideal citizen. Of the 14 items listed in the factor analysis, 12 items are loaded and retained, two items are cross-loaded, and cross-loaded items were removed.

This underlines the importance attributed by Nepali cooperators (both leaders and followers) attribute to the role model function of leaders. In both the pre-test consultations as well as while administering the set of questions, cooperative leaders acknowledged the importance of the Chairperson and other leaders exhibiting good moral and ethical character. This was considered a precondition for building the trust and confidence necessary for members to invest financially and socially in their cooperative. This type of moral leadership is considered crucial not only for business success but also for ensuring that the cooperative adheres to its values and principles [3,24,27]. In Nepal, where cooperatives are often small and the social relations between members are direct and intertwined, there is a widely perceived correlation between cooperative success and the leadership of selfless, respected, and trusted individuals.

This notion of the role model is also widely found in leadership theories and literature, linked to the practice of “leading by example” that motivates followers and subordinates to emulate good behaviours. Like the transformational leader, the role model leader raises the followers' level of consciousness about not just vision and outcomes but also in terms of ways and processes of achieving goals [10]. Drucker has observed that role model leaders not only know the path forward in an organization but enable others to find and follow that same path [47], with the process of admiration and emulation minimizing the need for direction, preaching, and teaching [2,14]. He/she does not only preach but also practices or leads by example.

The act of role modeling is often linked to the referent power of leaders [2], through which a leader motivates followers and subordinates to comply based largely on the leader's status and the pride they feel in being associated with him/her. There is also overlap with even earlier leadership studies such as trait theory which includes more assertive leadership attributes in its components [48,49].

3.2. Empowering the Team

The attributes clustered in the second dimension of leadership quality are: maintaining a good relationship with the team, communicating about future tasks, capacity building of the team, team empowerment, encouragement for active participation in decision making, inspiration for innovative ideas/differing perspectives, re-examining of current assumptions, developing new ways of performing tasks, exploration of different perspectives while analysing and solving problems, listening to others views, making rational decisions and succession planning. These items all relate to the fostering and building of team capacities; thus, this dimension is titled ‘Empowering the Team'.

Empowering the members is considered one of the chief characteristics of an effective leader. This dimension highlights the ability and commitment of successful leaders to build strong working relations with his/her team, building their individual skills but also their collective capacities to advance the mission of the cooperative. Both transformational and servant leadership models emphasize the importance of these functions such as team building, appreciation and valuing of others, active listening, mentoring, and teaching that serves to empower followers and subordinates to act [50]. The importance of team building is often emphasized as a core leadership function that enables leadership to occur at all levels of an organization and thereby contribute to attaining organizational goals [1].

Under the broad heading of team building and empowerment, there are different approaches enumerated in the literature. Some focus more on “psychological empowerment”, the cultivating of intrinsic motivations by leadership behavior. Others highlight the reengineering of management structures and work processes to foster the delegation of authority and responsibilities that create space for initiative and empowerment. Others focus more on skill development, coaching, mentoring, and directing [2]. The most appropriate approach may be defined situationally, dependent upon the nature of the organization, its structures, products, markets, and technologies, as well as the skills of team members.

As reflected in the study findings, the building of team capacity and facilitating team empowerment is considered an important ingredient of cooperative success. An effective leader can communicate this commitment not just as a business strategy, but as an articulation of cooperative values and principles [3,19]. This has been observed to be a particular challenge for rural cooperatives in Nepal, given the lower standard of technical and professional skills generally found in poorer and more remote communities. This makes the case for sustained support for capacity building even more compelling than usual [34].

3.3. Performance-based rewards

There are twelve items loaded in this factor: provision of terms of reference (ToR) to subordinates, a delegation of accountability and authority, monitoring and comparison of the performance with the target, concentration on irregularity and mistakes while monitoring, keeping track of all mistakes, expression of satisfaction if leaders' expectations are met, market-rate salary, provision rewards based on performance, instructs to address mistakes and shortcomings, directs team attention to achieve goals, and applies leadership styles suitable to the situation. This cluster of qualities is much more managerially and operationally focused and underlines the importance of performance-based management of human resources in successful cooperatives.

The items loaded in this dimension of leadership quality are related to transactional leadership theory, Leader-Member Exchange (LMX) theory, and leadership and influence process. The LMX theory was developed by researchers such as Graen and Uhl-Bien [51]; which posits that it is an individual's likes and dislikes regarding the traits or personality of another person that determines the level and nature of the relationship, and this relationship and interaction between leaders and subordinates largely determines the performance of an organization. According to Bass [5], LMX originated with the observation that supervisors of a group consider each member as either in-group (‘inners') or out-group (‘outers'), and this perception then impacts the leaders' relations with the different individuals. Subordinates from the in-group get more support, encouragement, good ratings/rewards, and attractive roles in the organization than do the “out-group”. LMX theory posits that a strong relationship helps to promote communication, constructive feedback, and emotional support between supervisors and subordinates which helps to enhance the performance of the organization [52,53]. By contrast, weak relationships are associated with issues of poor performance, absenteeism, staff turnover, etc.

However, this third cluster of leadership attributes incorporates factors that go beyond the simple relationship between leader and follower. It highlights the use of managerial tools such as performance monitoring and reward systems to promote desired behaviours and achieve organizational targets. This reflects a more political (power-based) reality of leadership that draws upon the many different types of power that a leader possesses [2]. Cooperative members may follow a leader not just because he/she is a role model: they may follow a leader because he/she has control of certain rewards such as access to resources and benefits or has decision-making, perhaps even coercive power, over punishments and penalties.

In summary, this third factor reflects the impact that organizational leadership has in applying powers of reward and punishment, rooted in performance monitoring and evaluation. Within Nepali cooperatives, performance-based systems are considered an important mechanism for securing improved performance of both members (presumably in terms of loyalty, patronage, investment, and engagement) and staff (presumably in terms of job performance and benefits package). This logic seems to supplement rather than contradict the earlier emphasis placed upon values, principles, and ideology as pillars of cooperative success, recognizing that fundamentally the enterprise must bring material benefits to stakeholders. The cooperative tool of patronage rebate is the most obvious mechanism by which the link is made explicit between member performance and financial reward.

3.4. Skills of the sector

The fourth and final cluster of leadership attributes comprises five items: knowledge of cooperative principles and legal framework, knowledge of Key Performance Indicators (KPIs), ability to develop linkages with stakeholders to mobilize needed resources, design and offer appropriate services to members, and ability to manage conflict. This is the most disparate cluster of attributes and as such is simply titled “Skills of the Sector”, as it combines different attributes, both knowledge, and skills, that are considered critical for successful leadership in the cooperative sector.

Leaders in cooperatives should have the skill to mobilize needed resources and offer appropriate services to cater to members' needs. If leaders fail to address members' needs, the purpose of establishing a cooperative cannot be justified. The importance of foundational skills and knowledge of the sector seems obvious for the success of a cooperative society.

This dimension also incorporates an element of “expert power” as being critical to successful cooperative leadership. According to Bass [5], successful leaders apply expert power in addition to referent, reward, coercive, and legitimate power. This expertise is rooted in knowledge and skills related to the sector, the organization, and the external environment [2] and framed by an appreciation of flexibility in terms of changing situations and contexts. This presents a bit of a challenge to the previous dimension (Performance-Based Rewards) as contemporary management thinking moves away from long-standing, conventional approaches to hierarchy and coercion as tools for managing human and organizational performance, with growing emphasis being placed on the sorts of interpersonal and team-building skills incorporated in the second (Empowering the Team) dimension [54].

Management research on leadership skills is fraught and complicated. Taxonomy of leadership skills developed by Robert Katz in 1974) which comprised technical, human, and conceptual skills [2]. This provided a useful set of categories with which to drill down on leadership attributes. But Implicit Leadership Theory as developed by Robert Lord and colleagues [2] has argued that the important question for organizational success is not actually what skills a leader brings to an organization but how those skills fit with the expectations of members or subordinates. If their expectations of the leader are not fulfilled, such leaders may not be successful. This challenge seems particularly relevant for more democratic forms of organizations such as cooperatives.

Subsequent researchers have expanded Katz's typology to include different organizational functions (finance, human resources, production, marketing, etc) while others make the case for focusing on some combination of conceptual clarity, strategic vision, and emotional intelligence, the ability to understand and respond to the concerns of others [5,52,55,56]. The fact that the Delphi process with cooperative members highlighted leadership skills in planning and monitoring (ie, the reference to KPIs), the design of appropriate products and services, the ability to negotiate effectively with multiple stakeholders, and the effective management of conflict are likely all reflections of respondents' perceptions of key obstacles to cooperative success in their different contexts and communities.

4. Conclusions

This study applied the Delphi approach to identify the qualities of a successful leader in the context of cooperative societies in Nepal. The Delphi technique was successful to bring leaders of the Nepali co-operative movement together, stimulating critical self-reflection, and identifying the leadership qualities needed to be a successful cooperative. The Delphi and factor analysis identified four dimensions of leadership qualities: Role Model, Empowering the Team, Performance-based Rewards, and Skills of the Sector. It is proposed to join these four inter-connected dimensions together into a single, unified model of cooperative leadership, with the acronym-based title of the ‘REPS model of leadership’. This model is visually depicted in Figure One.

REPS model of leadership indicates that if a leader has a role model character, empowers the team members, provides incentives based on performance has related skills of the sector, he/she becomes an effective and successful leader. The REPS model of leadership provides a complete set of qualities needed to be a successful leader and, this could be an important contribution to leadership study and literature.

A role model is the first quality of an effective leader. The role model leader sets a good example in the organization and motivates team members to achieve the organizational goals effectively. The characteristics of role models include selflessness, energetic, complying with rules, moral and ethical character, visionary, and others. The second quality of an effective leader is related to empowering subordinates. Without full support from the team members, the leader alone cannot achieve organizational goals, therefore the effective leader empowers the team members and pays adequate attention and invests in the human resources development of the organization. The third characteristic of an effective leader is that he/she establishes a culture of fairness and meritocracy by establishing a transparent system of rewards and punishments. Finally, the fourth characteristic of an effective leader is that he/she possess requires skills, knowledge, and conceptual clarity of the sector to lead the organization successfully.

The consensus that emerged from the mix of cooperative experts and practitioners participating in the research was that effective leaders are a prerequisite for a successful cooperative. In the context of rural Nepal, such a leader must set a good example for members and staff in terms of his/her moral and ethical character, and vision for the organization. Such leader must actively seek to engage and empower members and staff, making the necessary investments in the capacity development of human resources. An effective leader also needs to ensure that a transparent system of rewards and sanctions is put in place and applied fairly and equitably. Finally, effective leaders must also bring the required combination of skills, and knowledge for successful operations of cooperatives.

This analysis and model reflect the tendency of Nepali culture and understanding to view both people and organizations in more synthetic, integrated, and holistic terms than is usual in the predominantly analytical diagnosis favoured by Western management studies. This is particularly evident in the first two dimensions of the REPS model, role modeling and team empowerment, which speak directly to the distinctive associational nature of cooperative societies. The natural tension between the association and enterprise components of a cooperative is reflected in the latter two dimensions of the model, recognizing the need for both performance-based systems and adequate sector-focused skills to ensure cooperative success.

As this has been the first substantive examination of leadership qualities within the Nepali cooperative sector, it is hoped that this study can serve as the foundation for further research that explores leadership issues in different sectors of the national cooperative. More immediately, in Nepal, opportunities are be explored for the REPS theoretical framework to inform the recruitment and development of a new generation of leaders within Nepal's cooperative movement. The research questionnaire and approach used in this study can be used to study cooperatives elsewhere around the world.

There was no comprehensive study in the Nepali cooperative sector that explored the qualities of leadership. Although this study serves as a reference for future research in leadership study, there is some limitation in this study. In the study, sampled cooperatives were selected from Nepal only. The representation of the cooperatives besides Nepal in future studies will ensure the validity of the findings. The application of items for measuring leadership qualities across other types of cooperatives and organizations can help improve the items for measuring leadership qualities in Nepali as well as other contexts.

Author contribution statement

Nav Raj Simkhada: the conception and design of the study, the acquisition, analysis and interpretation of data; drafting the article or critically revising its important intellectual content; final approval of the version submitted. Prakash C. Bhattarai: the conception and design of the study, the acquisition, analysis and interpretation of data; drafting the article or critically revising its important intellectual content; final approval of the version submitted.

Data availability statement

Data included in article/supp. Material/referenced in article.

Declaration of competing interest

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.

Annex 1. Rotated component matrix

Role model	Components/Dimensions
1.1. Go beyond self-interest	.712
1.4. Display sense of confidence	.672
1.3. Act to be respected, person of community	.666
2.1. Adherence of code of conduct	.662
1.5. Trusted persons of the stakeholders	.659
1.6. Emphasize for teamwork	.655
2.5. Importance of having a collective mission	.608
2.3. Consider ethical consequences of decisions	.605
1.2. Instill pride to be associated	.602
2.2. Establish culture of fairness	.596
2.6. Enhance members' feeling of ownership	.593
2.4. Explain importance of having sense of purpose	.586
3.2. Articulate a compelling vision	.455	.434
3.1. Talk optimistically about future	.432	.411
Team empowerment
4.5. New ways of completing assignments		.659
4.4. Seek differing perspectives while solving problems		.647
4.3. Analyze problems from different angles		.600
4.2. Re-examining the current assumptions		.598
4.6. Encourage for active participation in decision making	.423	.552
4.9. Team empowerment		.547
4.7. Succession planning		.546
3.3. Talk energetically about future tasks to be done		.524
4.8. Listens others views and make decision with logics		.514
3.4. Confidence on organizational goals achievement	.439	.493
4.1. Inspire for innovative ideas/differing perspectives		.487
5.3. Consider developing special capabilities of individuals		.485
5.1. Spend time to maintain good relationship with team		.429
Reward and punishment
7.3. Provision of performance based rewards			.689
7.1. Market rate salary based on efforts			.662
7.2. Delegation of accountability and authorities			.655
7.4. Expression of satisfaction when expectations are meet			.654
8.1. Monitoring and comparison of the performance vs. target			.641
6.9. Provide ToR to achieve goals of Coop			.636
8.4. Keep track of all mistakes			.601
8.2. Concentrate on irregularity and mistake while monitoring			.577
8.5. Instruct to improve mistakes and shortcomings			.551
8.6. Direct team attention to achieve goal			.501
8.3. Deal with complaints and grievances		.434	.497
6.6. Adapt of best practices of others coop		.443	.448
6.8. Apply leadership styles suitable to situation			.435
6.7. Ability to make timely decision		.401	.406	.400
Skills of the Sector
6.1. Knowledge of coop principles, act, rules and by-laws				.741
6.3. Knowledge of KPIs to measure performance of Coop				.722
6.4. Linkages with stakeholders to mobilize needed resources				.632
6.2. Appropriate policy, procedures and services				.569
6.5. Manage conflict in timely manner				.534
5.2. Sensitive to individual problems needs of the team					.733
5.4. Listen individual grievances of team members					.541

Note: Items with bold are removed as they are cross loaded and have less than three items in each dimension.