THE MANAGEMENT OF SMEs AND COOPERATIVES

THE MANAGEMENT OF SMEs AND COOPERATIVES Fitriatul Zahroh – 20180101287 esa unggul university faculty of economic & business TANGERANG TABLE OF CONTENTS PREFACE ii TABLE OF CONTENTS iii ABSTRACT 4 CHAPTER I INTRODUCTION 1.1 Background 5 CHAPTER II LITERATURE REVIEW 2.1 Definition of Management   7 2.2 History of Cooperatives and SMEs 8 2.3 Cooperatives 10 2.4 UKM 17 2.5 Cooperatives Management 19 2.6 Cooperative and SME Relations  21 2.7 Government Authority Against Cooperatives and SMEs   22 2.8 Government Responsibilities Towards Cooperatives and SMEs   23 2.9 Problems in the Development of Cooperatives and SMEs  24 2.10 Strategies for Overcoming Cooperative and SME Development Problems 24 CHAPTER III METHODS 3.1 Strategies for Developing MSMEs to Face Global Markets 26 CHAPTER IV CONCLUSION 4.1 Suggestions 28 REFERENCE 29  PREFACE Thank you for the presence of Allah SWT, for His mercy so that we can complete the preparation of a paper entitled "The Management of SMEs and cooperatives” in time. Writing this paper is one of the tasks given in the Introduction to Management courses. With this paper, it will help in providing an understanding of Operations Management. What is the scope of management of operations and production processes. Our thanks go to those who have helped in completing this paper, especially to our Lecturers : Prof. Dr. Lia Amalia who have given assignments and instructions for completing this paper. We realize that this paper is far from perfect. For that we hope for constructive suggestions, input and criticism to complement the shortcomings of this paper. Jakarta, December 2019 Author (Fitriatul Zahroh)  ABSTRACT In Indonesia, the empowerment of cooperatives is one of the efforts to reduce unemployment and alleviate poverty through community economic empowerment programs. Government efforts in this case the State Ministry of Cooperatives and Small and Medium Enterprises are to be able to produce programs and policies that can support the growth and development of cooperatives. However, the image of cooperatives in society today is synonymous with marginal business entities, which can only live if they get help from the government. Although obstacles always confront, cooperatives as pillars of the economy based on community-based small and micro economies continue to be pursued development. In the economic recovery effort, cooperatives actually get the opportunity to appear superior. The exchange rate crisis and then brought the foreign debt crisis, has opened the eyes of all economic observers that the economic fundamentals that were initially believed to be valid, were in fact destroyed. Because there is still a lack of understanding of cooperatives and cooperative movements in Indonesia. In addition to cooperatives, small and medium businesses also participate in development efforts including aspects such as improving the quality of human resources in terms of management, organizational and technological capabilities, entrepreneurial competencies, wider access to capital, transparent market information, other factors of production inputs, and the business climate a healthy environment that supports innovation, entrepreneurship and business practices and fair competition In Indonesia, Micro, Small and Medium Enterprises (MSMEs) are known as microfinance. Microfinance is the provision of financial services for low income earners, including consumers and entrepreneurs, who traditionally do not have access to banking and related services. Today microfinances are considered as an effective way of poverty alleviation. SMEs have two functions in the development of the country's economy. According to Marzuki Usman in the micro function there are two roles, namely as an inventor (innovator) and as a planner (planner). Meanwhile, when viewed at a macro level, entrepreneurial economics has an important role in the development of a nation, as the initiator, driving, controlling, and driving the socio-economic development of a country. CHAPTER I INTRODUCTION !.1 Background Cooperatives as a people's economic movement is one of the institutions that become economic pillars where people who have relatively homogeneous interests gather to improve their welfare. Cooperatives as a business entity that is quite strategic in achieving economic goals that have an impact on society at large. Cooperatives are economic institutions that are compatible with the spirit of the community, namely the principle of kinship. Kinship is a principle that is in accordance with the soul and personality of the Indonesian people and has deep roots in the soul of the Indonesian people ( Hadhikusuma, 2000). The principle of kinship actually shows individuals who join groups. Individual borrowing money from cooperatives means borrowing group money. Individuals who join the cooperative will interact with other cooperative members. Individuals interact with each other so that groups emerge. A solid group with certain goals, norms , and behaviors will support the achievement of cooperative goals. Conversely, groups that are not solid with individuals who do not support the achievement of group goals listed in cooperative rules. And individuals who behave not in accordance with the objectives of the cooperative will be fired according to Buttutasik (in PIP, 2005). Thus cohesive groups can still achieve good performance goals (Nieva, Fleishman and Rieck in Robbins, 2003). In Indonesia the introduction of cooperatives was indeed carried out by the encouragement of the government, even since the Dutch colonial government. The cooperative movement itself declared as a movement that had started on July 12, 1947 through the Cooperative Congress in Tasikmalaya.     In Indonesia, the empowerment of cooperatives is one of the efforts to reduce unemployment and alleviate poverty through community economic empowerment programs. Government efforts in this case the State Ministry of Cooperatives and Small and Medium Enterprises are to be able to produce programs and policies that can support the growth and development of cooperatives. However, the image of cooperatives in society today is synonymous with marginal business entities, which can only live if they get help from the government. Although obstacles always confront, cooperatives as pillars of the economy based on community-based small and micro economies continue to be pursued development. In the economic recovery effort, cooperatives actually get the opportunity to appear superior. The exchange rate crisis and then brought the foreign debt crisis, has opened the eyes of all economic observers that the economic fundamentals that were initially believed to be valid, were in fact destroyed. Because there is still a lack of understanding of cooperatives and cooperative movements in Indonesia. In addition to cooperatives, small and medium businesses also participate in development efforts including aspects such as improving the quality of human resources in terms of management, organizational and technological capabilities, entrepreneurial competencies, wider access to capital, transparent market information, other factors of production inputs, and the business climate a healthy environment that supports innovation, entrepreneurship and business practices and fair competition Therefore, the authors feel the need to summarize information in the form of papers that can provide brief information about SME and cooperative management. Based on the description above, the author is interested in taking the title Practical Theory of SME and Cooperative Management.     CHAPTER II LITERATURE REVIEW 2.1 Definition of Management   Management is the study of how to achieve goals effectively and efficiently by using assistance / through others. Management comes from the word to manage which means to manage or regulate. Whereas definitively the definition of management is the art and science of achieving certain predetermined goals using the help of the energy and thoughts of others.   Management is an activity or series of actions or processes to achieve the stated goals, through cooperation with others. As the meaning of a series of actions is in achieving its objectives, it is necessary to have rational and effective cooperation , with various interrelated actions. According to George Terry, Management is a particular process that consists of planning, organizing, implementing and controlling the use of a science and art that together complete the task to achieve the goal. A management expert, Stoner explained that management is a process of planning, organizing, directing and controlling the efforts of the members of the organization to achieve the goals set.                 According to Alex Dasuki, management is a business (science) that deals with how to combine and operationalize the factors of production efficiently and choose business units that are profitable and sustainable, as a process, then management as its main point has successive functions as follows : Planning ( planning ) is a decision about what is done to achieve the goal. Organizing ( organizing ) is a job carried out by a leader fatherly combining and managing resources owned. The steps required include determining the organizational structure with the division of tasks, regulating the rights and authority of each so that they can work together efficiently in achieving the goals set. Direction ( actuating ) is a direction for people to want to work together consciously in a work group to achieve goals. Based on these functions the manager must know exactly the needs of the people involved, so that managers can easily move other people to do their jobs. Coordination ( coordinating ) is an effort to integrate or equate various directives or various commands to be one goal or one direction in the same direction , aligning the desires of each related member. Supervision ( controlling ) is a systematic action from management to direct every work implementation in accordance with what was originally determined. In supervision, effective monitoring measures are needed in order to prevent adverse deviations. According to MC Farland mentioned that management as a guide, where the people who are authorized to create, maintain, and run the organization in choosing and achieving goals. So, emphasizing the process, the person and the organization. Meanwhile, according to some management literature, the term management contains intent as a process, as a collective of people who work together and as an art or as a science. So the important thing is the existence of goals to be achieved by using other people who are guided and supervised.   In other words, the means or management tools used to achieve the objectives include : People ( man ) who manage or manage existing resources. Money ( money ) as a tool used for HR can work. Materials ( materials ), materials needed in an organization. Methods ( ways of working), steps used to run an organization. Market (market), the target of the product marketing objectives.   2.2 History of Cooperatives and SMEs   Cooperatives as an economic system, have a (political) position that is strong enough because it has a constitutional label, which is adhering to Article 33 of the 1945 Constitution, especially Paragraph 1 which states that the economy is structured as a joint effort based on the principle of kinship. In the Explanation of the 1945 Constitution it is said that building a business that best fits the family principle is Cooperative. This interpretation is also often expressed by Mohammad Hatta, who is often referred to as the formulator of the article. In the Explanation of the constitution it is also said, that the Indonesian economic system is based on the principle of economic democracy, where production is carried out by all and for all those whose forms can be interpreted as Cooperatives. In the discourse of the world economic system, cooperatives are also called the third way . The term that was recently popularized by the British sociologist, Anthony Giddens, namely as a middle way between capitalism and socialism.    The cooperative was introduced in Indonesia by R. Aria Wiriatmadja in Purwokerto, Central Java in 1896. He established a credit cooperative with the aim of helping his people who were in debt with loan sharks. R. Aria Wiriatmadja or Tirto Adisuryo, who were later assisted in their development by Dutch officials and eventually became the official government program. A Dutch government official, who later became an economics scholar, Booke, also paid attention to the Cooperative. On the basis of his thesis, regarding the socio-cultural dualism of Indonesian society between the modern sector and the traditional sector, he concluded that the cooperative business system was more suitable for the natives than the forms of capitalist business entities. This view was apparently approved by the Dutch East Indies government so that the colonial government adopted a policy of coaching cooperatives. Although the Cooperative developed rapidly until the 1933s, the Dutch Colonial government was concerned that the cooperative would become a center of resistance, but the cooperative mushroomed again until the Japanese occupation and independence. On July 12, 1947, the cooperative movement in Indonesia held the first Cooperative Congress in Tasikmalaya. Then, the date is set as Indonesian Cooperative Day. Bung Hatta continued the tradition of previous economic thought. His interest in the cooperative system is due to the influence of his visits to Scandinavian countries, in particular In Indonesia, Bung Hatta himself advocated the establishment of three types of cooperatives. First, consumption cooperatives that mainly serve the needs of workers and employees. Second, production cooperatives which are a place for farmers (including farmers or fishermen). Third, credit cooperatives that serve small traders and small entrepreneurs to meet capital needs. Bung Hatta also recommended the organization of small industries and production cooperatives, in order to meet the needs of raw materials and marketing of products. According to Bung Hatta, the purpose of cooperatives is not to seek maximum profits, but rather to serve the common needs and the participation of small scale economic actors. Cooperatives can also build large-scale businesses based on capital that can be collected from members, both members of primary cooperatives and members of secondary cooperatives. Because of its strong position in the constitution, no government has the courage to abandon the policies and programs for cooperating. All political parties, from the past until now, from Masyumi to PKI, listed the Cooperative as the main program. It's just that the office of the minister of state and the Department of Cooperatives was only born during the New Order era in the late 1970s. Therefore, the current idea to abolish the Cooperatives department and the development of small and medium-sized businesses, is not surprising, because before the New Order the State Minister's office or the Cooperative department was not known . In fact, the cabinet-led by Bung Hatta himself did not have a department or state minister who specifically fostered cooperatives. In Indonesia, some cooperatives can already be said to have large and diverse business units and grow into large-scale business giants. Some cooperatives have grown to become Indonesia's economic conglomerates, which are certainly not inferior when compared to private companies or state-owned companies that have taken over, but now many are sick. The cooperative concerned has penetrated and handled a variety of business sectors that dominate the lives of many people and surged into various fields of commercial businesses. As a system, the basic policy of developing cooperative HR and SMEs is understood as a policy that involves many actors and interests which are sub-systems. These sub-systems can be understood as stakeholders who each have a role and interest in the existence of cooperatives and SMEs. Therefore, to design a basic policy for developing cooperative HR and SMEs that is comprehensive, the first thing to do is to map or identify groups involved in policy formulation and who are the targets of the policy ( policy formation and target group ). These groups are entities that already exist and are intensively involved with the affairs of cooperatives and SMEs.     2.3 Cooperatives   1. Cooperative Definition According to Law No. 25/1992, a Cooperative is defined as "a business entity consisting of individuals, or a Legal Entity of Cooperatives, based on its activities based on the principles of Cooperatives as well as a people's economic movement based on the principle of kinship".              Moh. Hatta, defines that, "Cooperatives are a joint effort to improve the economic livelihood based on help to help".                Cooperative is an abbreviation of the word co / co and operation / operation. A cooperative is a collection of people who work together for the common good. Based on law number 12 of 1967, Indonesian cooperatives are social economic organizations with a social character and are members, cooperative legal entities which constitute an economic arrangement as a joint effort based on family principles. Literally, a cooperative that originates from English namely coperation which consists of two syllables namely " co " which means together and " operation " which means work. So cooperative means to work together , so that every form of cooperation can be called a cooperative.   Basic understanding of cooperatives: An association of persons including legal entities that have interests and goals together . Combining voluntarily become a member and have rights and obligations are the same as the reflection of democracy in the economy. Losses and profits are shared and enjoyed together fairly. Supervision is carried out by members. Having the nature of mutual help. Paying a sum of money as principal savings and mandatory savings as a condition of being a member. Functions and Tasks of Cooperatives Cooperative Function As a vein of Indonesian economic activity In an effort to democratize social economy in Indonesia To improve the welfare of Indonesian citizens Strengthening the economy of the people of Indonesia by fostering cooperatives Roles and Tasks of Cooperatives Improve the simple life of Indonesian society Developing economic democracy in Indonesia Achieve fair and equitable community income by uniting, fostering, and developing every potential that exists   Type of Cooperative There are two types of cooperatives that are well known to the public, namely KUD and KSP. KUD (Village Unit Cooperative) grew and flourished during the New Order government. Whereas KSP (Cooperative Savings and Loans) grows and develops in the current era of globalization. KUD and KSP are only examples of all types of cooperatives. Cooperatives by Type of Business In general, based on the type of business, cooperatives consist of Savings and Loans Cooperatives (KSP), Multipurpose Cooperatives (KSU), Consumption Cooperatives, and Production Cooperatives. Savings and Credit Cooperatives (KSP) KSP is a cooperative that has a single business that is to hold members' savings and serve loans. Members who save (save) will get a service fee and for borrowers subject to services. The amount of services for savers and borrowers is determined through a member meeting. From this, cooperative business activities can be said "from, by, and for members." Multipurpose Cooperative (KSU) KSU is a cooperative with various business fields. For example, a savings and loan business unit, a shopping unit to serve the daily needs of members as well as the community, a production unit, a telephone kiosk. Cooperative Consumption A consumption cooperative is a cooperative whose business field provides members' daily needs. Such needs are for example the need for food, clothing, household furniture. Production Cooperative Production cooperatives are cooperatives whose businesses produce goods (produce) and sell them together. Members of these cooperatives in general already have a business and through cooperatives members get capital and marketing assistance. Cooperatives Based on Membership Village Unit Cooperatives (KUD) Village Unit Cooperatives are cooperatives with members from rural communities . These cooperatives carry out rural economic business activities, especially agriculture. For this reason, the activities carried out by the KUD include providing fertilizers, medicines for eradicating plant pests , seeds, agricultural equipment, and providing technical agricultural counseling. Employee Cooperatives of the Republic of Indonesia (KPRI) This cooperative consists of civil servants. Before KPRI, this cooperative was called the Civil Servant Cooperative (KPN). KPRI aims primarily to improve the welfare of civil servants (members). KPRI can be established in the scope of departments or agencies. School cooperative The School Cooperative has members from the school community, namely teachers, employees, and students. The school cooperative has a business activity providing the needs of the school community, such as textbooks, stationery, food, and others. The existence of school cooperatives is not merely as an economic activity, but as an educational medium for students including organization, leadership, responsibility, and honesty. Types of cooperatives according to their functions include: Consumers cooperatives are cooperatives that carry out the function of purchasing or procuring goods and services to meet the needs of members as end consumers. Here the member acts as the owner and buyer or consumer of the cooperative. Sales / marketing cooperatives are cooperatives that carry out the distribution function of goods or services produced by their members so that they reach the hands of consumers. Here the member acts as the owner and supplier of goods or services to the cooperative. Production cooperatives are cooperatives that produce goods and services, where members work as employees or employees of the cooperative. Here the members play the role of owner and cooperative worker. Service cooperatives are cooperatives that provide the services needed by members, for example: savings and loans, insurance, transportation, and so on. Cooperative Principles The principle of cooperatives is a system of abstract ideas which is a guide to building effective and durable cooperatives. The latest cooperative principles developed by the International Cooperative Alliance (Federation of international non-governmental cooperatives) are:   Membership that is open and voluntary Democratic management Member participation in the economy Freedom and autonomy Development of education, training and economics Benefits of Cooperatives The benefits of cooperatives can be divided into two fields, namely the benefits of cooperatives in the economic field and the benefits of cooperatives in the social sphere. The benefits of cooperatives in the economic sector include: Increase the income of its members. The remaining Business Results (SHU) obtained by cooperatives are distributed back to their members in accordance with their services and activities. Offering goods and services at lower prices. The goods and services offered by cooperatives are cheaper than those offered by shops. It is intended that goods and services can be purchased by members of the cooperative who are less able. Cultivating humanitarian motives. Cooperative activities are not solely for profit but serve well the needs of its members. Cultivating honesty and openness in cooperative management. Each member has the right to be a cooperative administrator and has the right to know the financial statements of the cooperative. Train the community to use their income more effectively and get used to saving lives. The benefits of cooperatives in the social sector include: Encouraging the realization of a peaceful and peaceful community life. Encourage the realization of humane rules that are built not on material relations but on a sense of family. Educate members to have a spirit of cooperation and a family spirit.   Legal Foundation of Cooperatives 1945 Constitution article 332.UU No.12 of 19673.Regulation of the President of the Republic of Indonesia no.2 of 19784.TAP MPR no.II 1983. Then, through a fairly long struggle in 1927 came out the regulation on "Association of the Earth Putera Cooperative" No. 91 of 1927. Through these regulations the permit to establish cooperatives in the loosened. The 1st Cooperative Congress was held at the instigation of Bung Hatta on July 12, 1947 in Tasikmalaya.       Important decisions in Congress 1 include: Established the Central People's Cooperative Organization (SOKRI) based in Tasikmalaya. Propose the establishment of "Village Cooperatives" in order to regulate the rural economy. Establish 12 July as cooperative day. In July 1953 the second cooperative congress was held in Bandung important decisions at the congress were:   Appointed Bung Hatta as the Father of Indonesian Cooperatives. b. The SOKRI was changed to the Indonesian Cooperative Council . In September 1956 the Third Cooperative Congress held in Jakarta important decisions made at the congress included: a. Improving the Organization of the Coepration Movement.   Collecting material for the Cooperative Law. The Cooperative Law that is used to date is the Cooperative Law No.25 of 1992.   Element of Cooperatives The elements contained in cooperatives according to the International Labor Organization (Sitio and Tamba, 2001) are:   The gathering of people, The combination of these people is based on volunteerism, There are economic goals to be achieved, The cooperative formed is a business organization (business entity) that is supervised and democratically controlled, There is a fair contribution to the capital needed, Cooperative members receive risks and benefits equally.   Cooperative Values Cooperatives are based on cooperative values , including:   Help yourself (selp help). Take responsibility for yourself. Democratic. Equation. Justice. Solidarity. Based on the tradition of its founders, cooperative members believe in ethical values, including: Honesty. Openness. Social responsibility. Caring for others. The Role of Cooperatives in the Indonesian Economy The role of cooperatives in the Indonesian economy is demonstrated through the cooperative symbol. The cooperative symbol has the following meanings. The chain depicts friendship and unity in cooperatives. The five wheel gears describe a cooperative effort that is carried out continuously .   Rice and cotton illustrate the prosperity and prosperity of the people to be achieved by cooperatives. Scales describe social justice as a basis for cooperatives. Stars and shields depict Pancasila as an idiotic foundation for cooperatives. The banyan tree represents the social symbol and symbolizes a strong and rooted cooperative. Koperasi Indonesia depicts the symbol of the cooperative which shows the personality of the Indonesian people. The red and white color represents the national nature of cooperatives. From the description above, it is clear that cooperatives are business entities that are in accordance with the 1945 Constitution. However, in reality, cooperatives do not develop as expected. To that end, the government provides various assistance to support the role of cooperatives.  Cooperative Organization Toolkit According to Law No. 25 of 1992 Article 21, cooperative organizational instruments consist of:   Member Meeting  Meetings of members are normally held once a year or no later than three months after closing the book in the year concerned. Members' meeting is the highest authority in a cooperative organization which can be realized as follows: In the Members' Meeting, elected and dismissed executive positions as well as the Supervisory Board. During the Members' Meeting, the management's report was heard and the accountability report was validated. In a Member Meeting, various proposals and suggestions and opinions from members can be issued fairly according to their rights, namely one member has one vote. So this forum is an embodiment of the implementation of member democracy. In Member Meeting, it was decided cooperative work plans for the period will come. In the Members' Meeting, all the budgeted income and expenses that have been prepared are also requested for approval from the members. Members' Meetings also consist of: Ordinary member meeting. Work plan member meeting (RARK) Annual member meeting (RAT) Special member meeting (RK) Extraordinary members meeting (RALB) 2. Management The management of the cooperative consists of the Chairperson, Secretary and Treasurer and members chosen at the Members' Meeting in accordance with the articles of association of the cooperative. The executive board represents representatives of members who meet certain criteria and criteria and is elected and authorized by the Member Meeting. They swear in front of the members to be loyal and serve voluntarily in the interests of the cooperative. They are believed to be the representative members who are tasked with running, managing, and leading the course of cooperative organizations. They work as mandates from members to carry out what has been set out in the Member Meeting. The management has the right to represent the organization inside and outside the court if a problem occurs. As the mandatory board at the end of the financial year read the accountability report to the Meeting of Members on the tasks entrusted witnessed by an authorized officer (Law OF no.25 1992 Article 29,30 and 31).   3. Supervisor  Supervisors are bodies chosen from and by members in the Members' Meetings in accordance with Article 38 of Law No. 25 of 1992. Supervisors are tasked with inspecting the life standards of cooperatives, including business organizations, and implementing management policies. In carrying out these tasks, the supervisor prepares a written report about the results of the inspection that will be submitted to the RAT. Because the supervisor has the authority to examine the records and test the validity of the assets, rights, and obligations of the cooperative, this position must not be held even more so by the management.   2.4 UKM   Small and Medium Enterprises (UKM) is a term that refers to small scale businesses that have a maximum net worth of around Rp. 200,000,000, not including land and buildings. UKM is one example of an individual business entity which is founded and owned by only one person. According to Presidential Decree No. 99 of 1998, SMEs are small-scale people's economic activities in which the type of business sector is heterogeneous and needs to be protected by the government to prevent unfair competition. In Indonesia, the Micro, Small and Medium Enterprises (MSMEs) is known by the name of microfinance . Microfinance is the provision of financial services for low income earners, including consumers and entrepreneurs, who traditionally do not have access to banking and related services. Microfinance is currently considered an effective way of poverty alleviation.     SMEs have two functions in the development of the country's economy. According to Marzuki Usman in the micro function there are two roles, namely as an inventor ( innovator ) and as a planner . Meanwhile, if viewed at a macro level, entrepreneurial economics has an important role in the development of a nation, as the initiator, driving, controlling, and driving the socio-economic development of a country.    From these two functions, we can summarize some of the benefits of SMEs as follows.   Opening Jobs The existence of SMEs certainly opens wider job opportunities for the community. This can be one solution to reduce unemployment, so that it can be one solution to overcome social problems. SMEs are not only in need of skilled manpower and high educational qualifications, will but labor can be used also trained workforce who do not have higher education. This makes employment opportunities for small communities also easier. Being the Largest contributor to Gross Domestic Product Value At present Indonesia has become one of the members of the G20 countries which is a collection of 20 countries producing the largest Gross Domestic Product in the world. Gross Domestic Product (GDP) itself is a macroeconomic measure to show the ability of a country to produce goods and services in a certain time. From this GDP, it can be seen how the economic strength of a country. Micro, Small and Medium Enterprises (MSMEs) consist of: Micro Business: productive business owned by individuals and / or individual business entities that have a maximum net worth of Rp. 50 million excluding land and buildings for business premises or maximum annual sales results of Rp. 300 million rupiah. Small Business: productive economic business that stands alone, which is carried out by individuals or business entities that are not subsidiaries or not a branch of the company that is owned, controlled, or is a part either directly or indirectly of medium-sized businesses or large businesses that have net assets > Rp. 50 million to Rp. 500 million. not including land and buildings or annual sales of Rp. 300 million to Rp. 2.5 billion.  Enterprises intermediate: productive economic activities that stand alone, carried out by individuals or entities that are not subsidiaries or branches of companies owned, controlled, or be a part either directly or indirectly with a small business or large enterprise with total net assets> Rp. 500 million to Rp. 10 billion excluding land and buildings for business or annual sales> Rp. 2.5 billion to Rp. 150 billion.   Principles of Micro, Small and Medium Enterprises include: Kinship; Economic democracy; Togetherness; Fair efficiency; Sustainable; Environmental insight; Independence; Balance of progress; National economic unity The principles of empowering Micro, Small and Medium Enterprises include: Developing independence, togetherness and entrepreneurship in Micro, Small and Medium Enterprises to work on their own initiative; The realization of public policies that are transparent, accountable and fair; Development of regional potential-based and market-oriented businesses in accordance with the competencies of Micro, Small and Medium Enterprises; Increasing the competitiveness of Micro, Small and Medium Enterprises; Implementation of integrated planning, implementation and control The Purpose of Empowerment of Micro, Small and Medium Enterprises, among others: Achieve a balanced, developing and equitable national economic structure; Grow and develop Micro, Small and Medium Enterprises Capability into a strong and independent business system; Increasing the role of Micro, Small and Medium Enterprises in regional development, job creation, income distribution, economic growth, and alleviating people from poverty.   2.5 Cooperative Management   Cooperatives are institutions that must be managed as befits business institutions. In a business institution, an effective and efficient management is known as management. Likewise in a cooperative business entity, management is a right that must exist in order to realize the expected goals. Prof. Ewell Paul Roy said that cooperative management involves 4 (four) elements, namely: members, management, managers, and employees. A manager must be able to create conditions that encourage employees to maintain high productivity. Employees are the link between management and customer members (Hendrojogi, 1997). According to Suharsono Sagir, the management system in a cooperative institution must lead to participatory management in which there is togetherness, openness, so that every member of the cooperative either participating in management (business management) or outside management (ordinary members), has a sense of shared responsibility in cooperative organizations (Anoraga and Widiyanti, 1992). Cooperative management can basically be studied and three perspectives, namely organization, process, and style (Hendar and Kusnadi, 1999). From the perspective of the organization, cooperative management is in principle formed and three elements are: members, management and employees. Can be distinguished structure or equipment that is cursory organization at a glance is the same, namely: Meeting Members, Management, and Supervisors. For this reason, it is important to distinguish between organizational functions and management functions. The Supervisory Element as contained in the cooperative organization's equipment, is essentially an extension of the members and hands, to assist the Management in carrying out the day-to-day control functions of the organization and the cooperative's business.        The success of cooperatives depends on the cooperation of the three elements of the organization in developing cooperative organizations and businesses, which can provide the best service to members. And in the process perspective , cooperative management prioritizes democracy in decision making. The term one person one vote (one man one vote) is ingrained in cooperative organizations. Therefore, cooperative management is often seen as less efficient, less effective, and very expensive. Finally, from a management style perspective , cooperative management adheres to a participatory management style, in which member positions are placed as subjects and management is active in controlling the management of the company.          Sitio and Tamba (2001) state that cooperative business entities in Indonesia have cooperative management traced to the cooperative organizational apparatus, namely: Meeting of members, management, supervisors and managers. Has been explained previously that, the character of cooperative management is a participatory management style . The general pattern of participative cooperative management illustrates the interaction between cooperative management elements. There is a division of tasks (job description) on each element. Likewise, each element of management has a different decision area (decision area) , although there is still a scope of decisions made jointly (shared decision areas).         Cooperative management is to achieve cooperative goals by cooperating in accordance with the values ​​and principles of cooperatives. Not only the organizational aspects of cooperative marketing management and cooperative financial management also become important to understand. Marketing and finance are often a frightening specter after the collapse of the KUD monopoly system . The emergence of various forms of cooperatives today also requires that we make adjustments to the management of sharia cooperatives which would be very different if compared with school cooperative management, and for this alone cooperatives do not have adequate capabilities, even the basic concepts of cooperative strategy management are still very difficult to find standards.        Thus what is meant by cooperative management is the art and science of achieving certain predetermined goals (increasing the economic and social welfare of its members) by using the help of the energy and thoughts of others in the corridors of cooperative organizations.   2.6 Cooperative and SME Relations   People's economy may be a phrase we often come up with when the general election some time ago. Popular economy becomes a "weapon" of the candidate's leaders to attract the attention of the people to elect them. But over time, democratic economy only leaves a mere concept, there are no concrete maneuvers from the leaders to be able to realize what a people's economy is in the life of the wider community. However, if we look deeper, this country basically already has a populist economic concept set out in the constitution. The monetary crisis that struck several countries in the Asian region (Korea, Thailand, Indonesia, Malaysia) in 1997 at least witnessed history and at the same time provided very valuable lessons that actually the nation's economic development based on conglomerations was vulnerable to the storm of the monetary crisis. Meanwhile, at the same time we can see that the people's economy (among them are cooperatives), which is very different in characteristics from the conglomerate economy, is able to show its resilience to the storm of the monetary crisis that hit Indonesia. In the context of popular economy or economic democracy, production and consumption activities are carried out by all members of the community and for the community, while the management is under the leadership and supervision of members of the community itself. The principle of economic democracy can only be implemented in a family-based cooperative platform. Operationally, if cooperatives become more empowered, then production and consumption activities which if done individually will not succeed, then through cooperatives that have a mandate from their members this can be done more successfully. In other words, the economic interests of the people, especially groups of people who are at the lower economic level (for example farmers, fishermen, street vendors) will be relatively more easily fought for by their cooperative economic interests. This is actually the background for the importance of cooperative empowerment. Cooperatives can cover the economic life of the whole community even though they do not have a large capital, but the cooperative provides a forum to be able to support the economic development of the community in developing its business. SMEs and Cooperatives are two things that need each other.   2.7 Government Authority Against Cooperatives and SMEs    In the authority of cooperative management understand that the cooperative's main strengths are shared needs in an economic, voluntary and open context and total participation of members. Logically, when members feel the economic benefits of cooperatives, member base economics will work. We will try to display a picture of organizational structure, in this context the picture of a cooperative organization.   This aspect is an important part of the successful management of cooperatives, because the organizational structure is the configuration of formal roles in which it is intended as a procedure, governance and control mechanism, authority and policy making process. Cooperative organizational structure is formed in such a way according to ideology and development strategies to obtain strategic competitiveness so that each cooperative may have a different form functionally because it adjusts to the strategy being developed but in basic terms ideology, especially related to cooperative organizational instruments will show similarity.  Cooperatives are said to be counter- failing power, meaning simply as a counterweight to capitalism. In a market economy the greater the amount we spend will be more and more discounts that we get, in these conditions for the owners of capital or capital will be very profitable. Meanwhile, those who do not have enough capital or capital will get a high price. In an effort to raise the economic bargaining position and increase the scale of the people's economy, cooperatives are needed.     2.8 Government Responsibilities Towards Cooperatives and SMEs   Responsibility is the human consciousness will be the behavior or actions that intentionally or not in sengaja.tanggung responsibility also means doing as the embodiment of awareness of the obligation. Responsibility is the character of a civilized human being. He feels responsible because he is aware of the good or bad consequences of his actions, and also realizes that the other party needs a trial or sacrifice of references: Budgeting The budget is the implementation of the plan of the planned strategic plan. Budgeting is the process of operating a plan in the form of quantification, usually in monetary units, for a certain period of time. A budget is a plan that is expressed quantitatively in monetary units for a period of one year.  Characteristics of the Budget The budget estimates the level of potential profits of a business unit  Budgets are expressed in financial units, although these financial units are assisted with non-financial data (eg the number of units sold or produced) The budget generally covers a period of one year The budget is a management commitment The budget proposal is reviewed and approved by officials higher than the budget compilers The budget that has been prepared can only be changed if special conditions occur Periodically, a difference analysis is made between the budget and actually explained Budget use Clarify the strategic plan Helps coordinate the activities of several parts of an organization  Delegates responsibility to the manager Obtain agreement that the budget is the basis for evaluating manager performance Fill in the budget Budget revenue Production costs and sales costs Marketing cost budget Administrative and General Budgeting R&D budget Other budget: capital budget, balance sheet budget, cash flow budget Budget preparation process Publish guidelines for budgeting by budget staff that are approved by top managers Make a preliminary budget proposal by each responsibility center manager Negotiations, namely discussing the proposed budget Slack , which is the difference because it decreases the level of sales or raises costs  Review and approval by the CEO / Board of directors  Budget revision, both systematic and special conditions Quantitative techniques in preparing budgets Simulation Probability Estimates Unexpected budget   2.9 Problems in the Development of Cooperatives and SMEs   Limited capital and access to sources and actors of financial institutions. The low quality of human resources of business operators (including cooperative managers) Limited marketing skills. Access to business information is low. Not yet well established mutually beneficial partnerships between business actors (MSMEs, Large Enterprises and SOEs).   2.10 Strategies for Overcoming Cooperative and SME Development Problems Provision of capital and access to sources and financial institutions. Improve the quality and capacity of HR competencies. Improving the marketing capabilities of UMKMK. Improving access to business information for MSMEs. Establish a mutually beneficial partnership between business actors (UMKMK, Big Enterprises and BUMN). CHAPTER III METHODS 3.1 Strategies for Developing MSMEs to Face Global Markets 1. Product Determining products in the MSME business is the most important step before the business runs. The product you sell must be in accordance with the needs desired by all consumers. For that, you must first research about market tastes, current market trends, and see how much market opportunities we will aim at. In addition, in terms of quality, the product to be sold must have a quality that can compete with existing products, if necessary it can be in the same class as a product that is sold by global market standards. 2. Price To determine the selling price of a product, you must carefully calculate the total of all costs incurred during production. There are 3 ways to set prices that you can do to avoid losses when determining prices. Determination of prices based on production costs coupled with profits, profits are usually taken 30% of the production price. Pricing is based on competitors, so you can research before determining prices, determine prices below competitors, but with the same quality as competitors. So this can be one strategy to attract consumers from competitors. Pricing based on demand, so consumers will determine the price of the product you have by referring to the quality that is owned, but if the price given is still below the production price, you must be able to increase the selling price, so that you can still benefit. 3. Place So that sales can be maximized and products are easily obtained by consumers, the SMEs must choose a strategic place to sell. The things that must be considered in determining the place of business are: The strategic location is easily accessible by everyone and close to the crowd. In accordance with the target market that is being targeted, if the target is workers, then the effort made must be close to offices. Easy to reach for all consumers, especially in terms of transportation. The product sold must attract the attention of consumers. 4. Promotion Promotion is a step to introduce the products you have to consumers. Especially if the product being sold is a new product, then this promotion is very important. So that the promotion can be right on target, then you have to research the products being sold and who are potential prospective customers to buy the product. After that, you only need to choose, through which media do you do the promotion, whether via online media or offline media? 5. Browse The last is a person or human resources (HR). The chosen HR must be the chosen people who can produce the best products and services. Do not hesitate to make a selection of prospective employees in the SME business that you build, avoid references from acquaintances or Sodara if you feel that your skills are not appropriate. Thus the discussion of the 5 strategies to develop SMEs in Indonesia to face the global market. If the 5 strategies have worked well and are successful, then never forget the financial management of MSME. Avoid mixing personal money with money used in business. Financial management is not just a matter of keeping track of all transactions in a book, but financial management is an activity of planning, checking, budgeting, controlling, managing, searching and storing finance. Journals are online accounting software that you can use to help simplify financial management issues, both on the MSME scale or on a company scale. Many features available in the Journal that you can use to launch a business that you are building.  CHAPTER IV CLOSING Conclusion Cooperative is a business entity / association people who join and conduct joint ventures and take part in certain market mechanisms, so as to get greater benefits. The principle of cooperatives is a system of abstract ideas which is a guide to building effective and durable cooperatives. The cooperative aims to make the social and economic conditions of its members better than before joining the cooperative. Cooperatives that carry out one function are called single- purpose cooperatives , while cooperatives that carry out more than one function are called multi-purpose cooperatives . Small and Medium Enterprises (UKM) is a term that refers to small scale businesses. UKM is one example of an individual business entity which is founded and owned by only one person. Suggestion For readers, it is hoped that this paper can be useful and useful as information adds to scientific references and is further developed as long as it is still in the same discussion context .        REFERENCES Adji Wahyu, Economics for 3 high schools , volume 3, Jakarta: Erlangga, 2007  Anoraga, Panji and Ninik Widiyanti. 1992. Cooperative Dynamics. Jakarta: Rineka Cipta.   Baswir, Revrisond. 2000. Indonesian Cooperative . Yogyakarta: BPFE-Yogyakarta.  Hendrojogi. 1997. Cooperatives: Principles, Theory and Practice . . Jakarta: Raja Grafindo.  Sitio, Arifin and Halomoan Tamba. 2001. Cooperative Theory and Practice . Jakarta: Erlangga.   Sukamdiyo, Ign. 1996. Cooperative Management . Jakarta: Erlangga.  Widiyanti, Ninik, 1994. Cooperative Management. Rineka Cipta. Jakarta.   http://www.Koperindo.com. http://ekonomimahasiswa.blogspot.co.id/2016/11/makalah-manelola-koperasi-dan-umkm.html http://www.statistik_koperasi_2007 http://en.wikipedia.org/wiki/Usaha_Kecil_dan_Menengahberandaukm.blogspot.com http://berkoperasi.blogspot.com/ http://management-koperasi.blogspot.com/2008_08_24_archive.html http://www.anneahira.com/dinas-koperasi.htm http://widzarya.blogspot.co.id/2010/11/makalah-koperasi-dan-ukm.html http://feessa.blogspot.co.id/2014/01/example-makalah-management-koperasi.html http://pakguruhonorer.blogspot.co.id/2015/06/makalah-koperasi-dan-umkm-di-indonesia.html http://manseet.blogspot.co.id/2015/06/management-koperasi-dan-ukm.html http://www.smecda.com/search/files/report/freedom_resources_pdf/BAB%201.pdf http://makalahpendukasiunmura.blogspot.co.id/2013/03/makalah-ukm-dan-koperasi.html   3 1