By J. Birchall
So what's a member-owned enterprise? What does it seem like? How will we distinguish it from an investor-owned enterprise? The an important contrast is among a company that's people-centred, and one who is money-centred. This publication explores the becoming variety of businesses which use this version and their wider importance in society.
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Extra info for People-Centred Businesses: Co-operatives, Mutuals and the Idea of Membership
First, it remains very theoretical and there is a lack of empirical studies that make the distinction between different ownership types. Second, there are limits to the extent to which the evolutionary metaphor can be used to generate insights. Just as organisations are not organisms, nor are MOBs collectively a species to which ideas of natural selection apply. They are not the product of natural evolution but have been purposefully designed and can be redesigned. While the ecological view reminds us that change is difﬁcult and that inertia is common, particularly in large, well-established organisations, it is not good at explaining the ‘rebirth’ of organisations.
Their unique contribution was in synthesising a business model that included a set of ‘co-operative principles’, vertical integration into wholesaling and manufacturing, and horizontal integration into a chain of stores. Philippe Buchez did the same thing for the French worker co-operatives, and Raifffeisen for the rural co-operative banks. As Shah has shown for producer co-operatives in India, having the right model and then encouraging people to replicate it is the key to success. The right model is one that binds the members to their representatives and calls their managers to account, something that the Rochdale principles do automatically provided they are adhered to and can evolve to meet different circumstances (Shah, 1996).
The theories summarised The approach taken here can be summed up in these four propositions: 1. no one theory is sufﬁcient to explain success and failure in co-operatives 2. there is no substitute for gathering lots of information about a particular sector and trying to understand it from a variety of standpoints 3. sometimes one theory will work better than another 4. 2 lists the theories, what they say about the conditions under which co-operatives can thrive and the kinds of outcomes they predict.