Co-operating to Make a Difference

The 3rdi magazine is a member’s co-operative. But what does that actually mean in practice? Co-operatives as a business model are often misunderstood so I’d like to explain some of the myths surrounding them and increase your understanding as to how this can be an excellent alternative business model.

I work as a consultant for Baxi Partnership and we are specialists in employee ownership which may be viewed as a form of co-operative. Most of the companies we support are owned by all the employees whether through a trust or through shareholdings, either directly or through a tax efficient share scheme. One of the myths about the co-operative model is that it is not for profit but that is not the case with employee owned companies. In most respects these are conventional businesses which are run on a commercial basis however the difference is down to the partnership culture which exists within these organisations and the fact that employees have the opportunity to share in the rewards, share knowledge about business performance and strategy and also have the ability to influence how the business is run whether through voting at shareholder meetings or holding the managing director to account through a representative body of employees. This different approach to running a business can lead to an increase in profits as productivity and innovation are often higher and staff turnover and absence levels are lower than other similar companies.

Other myths include the idea that everyone gets equal pay and that everyone is involved in all the decision making. Neither of these are the case in practice. Members of a worker’s co-operative will usually be on different salary scales although they may choose to limit the income differential between the highest and lowest paid and delegation of decision making must happen for the business to operate effectively although key decisions will still be put to the members.

The key characteristics of co-operatives are that they are jointly owned and democratically run. This is the case with 3rdi which is owned and run by its members. This gives members an opportunity to have real influence and control over the future shape of the organisation and to change the way that the business world operates.

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Jacqui Mitchell is Employee Ownership Specialist at Baxi Partnership, providing advice and support to companies looking to transfer into employee ownership, and development for those looking to drive the best value from their employee owned structure.

1 Comment on Co-operating to Make a Difference

  1. We set up the co-operative business directly because we wanted genuine involvement and democratic ownership and rewards. Please join Karen and help her start to change the way the the business world, and maybe the World at large, operates. AND you get rewards in addition!!!

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