How do highly informal MSMEs determine costs? A cooperative case in the Magdalena’ Department

Abstract

Previous literature states that the informal nature of some organizations contributes to greater flexibil- ity that promotes innovative responses to the demands of the environment and that, in fact, MSMEs depend on this flexibil- ity to survive, however, informality in the way of determining costs can also lead to loss of competitive advantage and bank- ruptcy. However, in the market there are organizations with highly informal accounting procedures that have managed to remain current over time. This type of company represents a high-value unit of analysis to deepen the understanding of informality in the cost system and the survival capability of MSMEs. In this sense, the objective is to analyze the cost accounting of a highly informal cooperative in the Depart- ment of Magdalena. To achieve this, qualitative research was carried out, framed in the action research tradition, in which participant observation and semi-structured interview were used. The main results show the high informality and lack of technique to determine the costs of the products, however, the cooperative remains in force in the market because it mainly executes an economic activity of the primary sector and the corporate purpose of the cooperative is the obligatory mode of life of the people who carry out the activity of fishing, conser- vation, and sale of fish.