Knowledge and Practice Gaps in Cooperative Financial Management

Abstract

Financial management is one of the important areas of management in any business entity. A cooperative is an autonomous organization that conducts business activities, and its establishment aims to provide returns to its members. However, this goal will not be achieved if the cooperative is not managed well, and weak financial management will cause the failure in the cooperative to function and may result in negative impacts such as wastage and misappropriation. Therefore, this study aims to analyze the knowledge and practice gaps based on 74 items consisting of five financial management areas: Working Capital Management, Budget Management, Capital Management, Financial Reporting, and Financial Information Systems. A questionnaire was used as the data collection instrument. The sampling method for the cooperatives involved the stratified random sampling technique. A total of 221 respondents completed the questionnaire, and this study utilized the Rasch Measurement Model analysis with Winstep 5.2.2.0. The study findings revealed that the most challenging items in terms of knowledge and practice levels were in the area of Working Capital Management, followed by Capital Management and Financial Information Systems.