Topics: Strategic management, Mahogany, Cooperative Pages: 4 (1188 words) Published: March 4, 2006
Case 8: Guajilote Cooperativo Forestal, Honduras

1. What is your impression of Guajilote as a business venture?
The Guajilote Cooperativo Forestal was founded in 1991 to improve economic development in developing countries. The COHDEFOR (the Honduran forestry development service) issued Guajilote the right to exploit naturally fallen mahogany trees within the buffer zone of La Muralla National Park in Honduras. This business venture has been able to improve the economic welfare and quality of life of its members. "One member stated that before he joined Guajilote, he was lucky to have made 2,000 lempiras in a year, whereas he made around 1,000 to 1,500 in month as a member of the cooperative" (Wheelen & Hunger, 2006. Case 8-3). Santos Munguia, Guajilote's leader since 1995, has been able to negotiate a better product price per foot of mahogany and thus nearly doubling the lempiras earned per sale. With the depletion of mahogany trees around the world and the deforestation of mahogany trees the value of mahogany should increase over time (Wheelen & Hunger, 2006). Guajilote however does have some drawbacks in its management and operation styles. The cooperative is not run democratically. Munguia makes all final decisions and handles all financial records concerning Guajilote. Also there are no public financial records available to access the economic welfare of the cooperative. "As head of the cooperative, Munguia kept informal records" (Wheelen & Hunger, 2006. Case 8-4). Operations for Guajilote are very simplistic. Due to the lack of proper transportation, the cooperative is limited to one distributor to sell the mahogany to and thus not being able to move up in the value chain.

The members of Guajilote lack a formal education and "none of Guajilote's members had any education beyond primary school. Many of the members had no schooling at all and were illiterate. As a whole, the group knew little of markets or business practices"...
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