Publications

Financial co-operatives and social cohesion: how do they interface in the new "local" territory in the age of globalization?

Research project undertaken in co-operation with the:

Co-operatives Secretariat (Department of Agriculture and Agri-Food) and the Department of Canadian Heritage

Research team

in Québec

Marie-Claire Malo, professor, École des Hautes Études Commerciales (HEC)
Benoît Lévesque, professor, Université du Québec à Montréal (UQAM)
Lucie Mager, independent researcher
Geneviève Huot, graduate, Master's program in Sociology, UQAM
Annie Camus, student, Master's program in Management Sciences, HEC

in New Brunswick

Omer Chouinard, professor, Université de Moncton
Pierre-Marcel Desjardins, professor, Université de Moncton
Éric Forgues, CRISES post-doctoral researcher, Université de Moncton
Ugo de Montigny, Economics student, Université de Moncton

2001-03-30

Abstract

Globalization is forcing companies to redefine themselves in order to adjust to the new realities of the marketplace. We can see the results: mega-mergers and economic concentration, creation of new companies and the closing of others, impoverishment of some persons and communities while others prosper. In this context, more and more men and women are feeling alienated and excluded from the advantages that can stem from these changes, and removed and isolated from the centres of influence and decision-making centres. Co-operative movements consisting of associations of persons in control of collective enterprises have historically provided many communities with bases for social mobilization. The co-operatives of today, however, are also faced with change. How can they adapt to this new environment? Will they be able to continue generating the social capital that will help individuals and communities meet their new challenges?How can we measure their vitality and their impact?

In an attempt to help answer these questions, the authors have chosen to examine financial co-operatives in Québec and New Brunswick, because they are experiencing some major changes. In Québec, the Mouvement des caisses populaires et d'économie Desjardins has initiated not only a re-engineering of its business processes, but also a reconfiguration at both the global and local levels. Globally, the Caisses Federations and the Confederation are giving way to a single federation of Caisses Desjardins. Locally, we are witnessing a two-pronged process: first, the Caisses are being encouraged to amalgamate, and second, corporate accounts managers are being organized within Desjardins Corporate Financial Centres (CFCs). The territory of the Caisses is expanding, and a number of them are now served by a single CFC. At the same time, the institutional territory of local development is changing, as proven by the establishment of Local Development Centres (LDCs), which in the regions are adopting the territorial division of the regional county municipalities (RCMs); and in Montreal, LDCs are adopting the division of municipal districts which correspond to the territories of the Community Economic Development Corporations (CEDCs) and other organizations mandated by the Montreal LDC. In New Brunswick, the Mouvement des caisses populaires acadiennes is also encouraging its Caisses to merge and to start re-engineering their business processes, without going as far as to contract out financial services to businesses. Through an examination of five examples of the "new Caisses" (three in Québec and two in New Brunswick) resulting from such changes (re-engineering, merger and sometimes outsourcing), the authors studied the relationship between financial co-operatives and social cohesion in a local territorial context which now extends beyond the parish, the initial unit of territorial reference. By virtue of their specific form (combination of a group of persons and a business), financial co-operatives may well play a role in the process of generating social cohesion, but what happens when, as businesses, they are obliged to adjust to the rules of the marketplace? Can they continue to be successful agents of solidarity and at the same time agents of adjustment? If so, should this dual role not be recognized in public policies developed in view of strengthening social cohesion?

The five case studies have been carried out with a focus on four aspects: the relationship to the territory, the Caisse as a business, the Caisse as an association, and the relationship to community development. The summary presented in this report not only takes these four aspects into account, but more specifically addresses five dimensions of the identity of financial co-operatives from the perspective of social cohesion: sense of the local territory, accessibility of financial services, employability of female workers downgraded because of change, degree of democracy in the new Caisses, and how connected they are to local economic, social and community development networks.