The long history of world’s cooperative movement has shown many dairy cooperatives as examples of success. Dairy farmer cooperatives/milk cooperatives have a graat potential to develop into major scale cooperatives in Indonesia. However, its potential has yet to be realized in Indonesia. Only one dairy cooperative is including among the five best cooperatives in Indonesia, namely the North Bandung Dairy Farmer Cooperative (KPSBU).
In order to maximize the potential of the dairy cooperative, a concept of institutional strengthening of dairy cooperatives is necessary, in order to improve performance and respond to the main problems faced by dairy cooperatives. The dissertation research of Karuniana Dianta Arfiando Sebayang, titled ‘Institutional Strengthening of Cooperative through Chaddad Governance into a New Institutional Cooperative Form (Case Study of the North Bandung Dairy Farmer Cooperative)’ formulates an understanding on strengthening the institution of cooperatives through reconstructing cooperative management based on Chaddad’s (2009) ideas. In order to understand the ideal form of dairy cooperative institutional strengthening, Karuniana quoted Chaddad’s cooperative governance indicator index, namely property rights, formal authority, incentive, administrative control, central structure, partner selection and legal contract.
This study uses the soft systems methodology based action research method, to illustrate the relations between institution and human behaviour, and uses KPSBU as the research object, being the best dairy cooperative in Indonesia. During his doctoral promotion examination on Wednesday, 11 January, Karuniana describes their finding that institutional strengthening of the dairy cooperative can be conducted by maximizing social capital in the Chaddad governance of the cooperative. Social values make up an important capital in the success of a cooperative. According to Karuniana, the cooperative institutional strengthening by focusing on social capital will maximize the results, as each change will result from two elements: organizational governance culture and organizational governance skills, which can support the indicators of property rights, formal authority, incentive, administrative control, central structure, partner selection and legal contract as forms of control.