Thanks for the informative post. I'm new to the idea, and I have a question. You say that the decision making process is democratic. Couldn't that be dangerous?
The majority is not always right, or even informed enough to make a correct decision. An executive hierarchy puts this process in the hands of key decision makers, who are supposed to make the correct decisions to protect the company's interests based on their experience.
What happens when the decision made by the democratic majority is potentially harmful to the company? Is there a hierarchy in place to mitigate bad decisions?
Thanks for the informative post. I'm new to the idea, and I have a question. You say that the decision making process is democratic. Couldn't that be dangerous?
The majority is not always right, or even informed enough to make a correct decision. An executive hierarchy puts this process in the hands of key decision makers, who are supposed to make the correct decisions to protect the company's interests based on their experience.
What happens when the decision made by the democratic majority is potentially harmful to the company? Is there a hierarchy in place to mitigate bad decisions?
EDIT: jawns has clarified that the democratic process can be used to appoint an executive heirarchy. I was under the impression that every business decision was put to a vote by the entire cooperative. I understand now that key decision makers can be elected in order to mitigate decisions that may be harmful to the business.
Well, remember that just because a company is democratically controlled does not mean that its member-owners cannot elect an executive hierarchy of its own. But when the votes are cast for that election, it will be the member-owners' interests that are being reflected, and not outside investors' interests.
To give an example that's more to do with worker cooperatives, suppose the member-owners are discussing whether to work 35- or 45-hour work weeks. The 35-hour work week might be good for work-life balance, but bad for the business itself, while the 45-hour work week might be the reverse. Nevertheless, the majority of members might vote in favor of the 35-hour work week, and whether or not that is bad for the business, it will be good for the majority of the workers.
Granted, the democratic process isn't perfect -- you need only look at U.S. politics if you need proof of that -- but when you compare it to its alternatives, it's not at the bottom of the pack.
I find it amusing that you think a hierarchy can solve the bad decision problem. You may be right, though not in the sense of mitigating a bad decision by having hierarchies, but that hierarchies have the uncanny ability of redefining a bad decision as a good one. At least that's been my experience.
Every co-op is different. Co-ops in general value the "wisdom of the crowds" and may be more proactive in seeking opinions of every member, but there are still hierarchies in place that have final decision rights.
This is how a lot of co-op living arrangements work. Everyone has a say, but the final decision is made by someone whose job it is to manage the health of the house.
By the way even companies can adopt some of these ideals without being a full-blown co-op. I have worked in several organizations where decision-by-committee is highly popular, and in each case, there are processes to prevent deadlock or processes for override if something starts to go badly. Usually these processes are triggered by very senior level individuals who have decision rights, or by regulatory experts (e.g., someone in Legal).
Seems like it might be an appropriate place for representative democracy. Every year or so, everyone votes on a new CEO, etc.
There's probably a lot of decisions that could still be left up to workers, but I agree that having some clear direction is important, and there's lots of questions that just need a "no". The BDFL model of open source is a good example of how this can work without excessive hierarchy.
> I was under the impression that every business decision was put to a vote by the entire cooperative.
Depends on the co-op.
I lived in a student co-op in college. Every Sunday night we had a group meeting. Every major decision was made by a consensus making process. Other decisions were delegated to committees or individuals in a particular position: food manager, garden manager etc.
I also worked at a student composting/waste disposal co-op that operated the same. Everyone has a voice in either the actual decision or in electing someone to make a decision.
This type of decision making basically requires lots of communication between members and usually at least one long meeting a week. It also demands that people have mutual respect for each other and the group decision making process.
In both instances it definitely helped me learn to relate with, communicate with and respect others and their opinions.
The majority is not always right, or even informed enough to make a correct decision. An executive hierarchy puts this process in the hands of key decision makers, who are supposed to make the correct decisions to protect the company's interests based on their experience.
What happens when the decision made by the democratic majority is potentially harmful to the company? Is there a hierarchy in place to mitigate bad decisions?
Thanks for the informative post. I'm new to the idea, and I have a question. You say that the decision making process is democratic. Couldn't that be dangerous?
The majority is not always right, or even informed enough to make a correct decision. An executive hierarchy puts this process in the hands of key decision makers, who are supposed to make the correct decisions to protect the company's interests based on their experience.
What happens when the decision made by the democratic majority is potentially harmful to the company? Is there a hierarchy in place to mitigate bad decisions?
EDIT: jawns has clarified that the democratic process can be used to appoint an executive heirarchy. I was under the impression that every business decision was put to a vote by the entire cooperative. I understand now that key decision makers can be elected in order to mitigate decisions that may be harmful to the business.