FEDERATIVE DECISION-MAKING SYSTEMS: THE CASE OF CUFIS AND THE CREDIT UNION SYSTEM OF SASKATCHEWAN

Abstract

Although innovation has been studied from many angles in the literature, one area where little research has been done is the introduction of innovation into systems of organizations, particularly federations. Much research has been conducted on diffusion of innovation, characteristics of organizational innovativeness and innovation processes but few have attempted to study how organizational systems innovate. This study begins to fill that gap in the literature. Using a case study methodology, this research examines one attempt of a federative decision-making system to create a structure that would stimulate innovation within the entire system. The particular system in question is the Credit Union System of Saskatchewan and the structural innovation was Credit Union Financial Information Services (CUFIS). The impact of organizational structure, leadership, culture and interorganizational relations on CUFIS was studied in trying to determine the innovative ability of federative systems. The data indicates that federative, co-operative structures are capable of innovation, in fact, they may encourage innovation in certain situations. However the decision-making structures present in such systems do present challenges for the models of innovatively structured organizations that the literature describes. For innovation to occur, the inherent advantages of federative structures, such as decentralization and complexity, must be fully exploited. In this way, federations, particularly co-operative federations, can build an innovative future.