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P H I L O S O P H Y F O R B U S I N E S S ISSN 2043-0736
http://klempner.freeshell.org/businesspathways/
Issue number 63
21st December 2010
CONTENTS
I. 'A New Form of Discrimination: Credit Reports and Hiring
Practices' by Christopher M. Caldwell
II. 'Profits and Sustainability: Lessons Learned from Workers'
Cooperatives' by Dena Hurst
III. 'Essential Characteristics of a Worker Cooperative' by William
Cerf
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MESSAGE FROM THE EDITOR
I am delighted to present the second issue of Philosophy for Business
edited by Dena Hurst. I won't steal Dena's thunder by adding to her
excellent Editor's Introduction. However, I would like to say that I
found the content of this issue not only informative but also
gripping.
Reading this issue, I am increasingly hopeful that philosophical and
ethical reflection on the nature of business practice can and will
lead to changes which will affect all our lives in years to come.
Faced with the possibility of making a real difference or doing
nothing, we should all say: 'Someone's got to do it; it might as well
be me.'
Putting pen to paper can make a difference. I call upon anyone who
wishes to contribute to the debate to submit original material --
either to Dena or myself. Every article we receive will be given
patient consideration, regardless of the author's moral or political
views.
I am sure Dena joins with me in wishing all the readers of Philosophy
for Business a happy and prosperous 2011. May your hopes be realized
and all your projects come to fruition.
Geoffrey Klempner
-=-
GUEST EDITOR'S NOTE
Perhaps because I just finished reading Peter Singer's essay, Famine,
Affluence and Morality (for at least the 47th time) or perhaps because
we are winding down a rather tumultuous year, I have found myself
deeply reflecting on how we can restructure our old ways so that we
capitalize on the best elements and devise new approaches for those
elements that do not work so well. And in this reflection, I believe
I am not alone. As I peruse blogs and YouTube and other social media
sites, amid the muck there is a thread of collective reflection on
all levels, moral, political and social. So perhaps, as Isaiah Berlin
pointed out, many societies have reached the point of development
where their people can think about their ideals and about what they
truly want to accomplish.
To this end, this issue of Philosophy for Business focuses on
inclusion. In 'A New Form of Discrimination,' we see that current
credit practices, from applications to reporting, unfairly
disadvantage one group for the benefit of another. Tracking of one's
credit history is used not only to determine financial soundness;
such information is also frequently used by employers in hiring
decisions. Individuals who fall into the poor credit score trap find
that they are being squeezed on all sides -- higher interest rates
imposed by the creditor, which lead to higher payments to the
creditor, and the possibility of not being able to find a job that
pays a sufficient wage to repay the debt or even of being fired from
a current job.
Practices such as these should give us pause; because surely the
intent is not to discriminate against one group in favor of another.
These practices, though, help form the wires in Marilyn Frye's famous
birdcage:
If you look very closely at just one wire in the cage, you
cannot see the other wires. If your conception of what is
before you is determined by this myopic focus, you could
look at that one wire, up and down the length of it, and be
unable to see why a bird would not just fly around the wire
any time it wanted to go somewhere. Furthermore, even if,
one day at a time, you myopically inspected each wire, you
still could not see why a bird would gave trouble going
past the wires to get anywhere... It is only when you step
back... and take a macroscopic view of the whole cage, that
you can see why the bird does not go anywhere; and then you
will see it in a moment. It will require no great subtlety
of mental powers. It is perfectly obvious that the bird is
surrounded by a network of systematically related barriers,
no one of which would be the least hindrance to its flight,
but which, by their relations to each other, are as
confining as the solid walls of a dungeon.
If, in our collective reflections, we choose to experiment with
structures that honor moral obligations and allow for more equitable
economic interactions, there are viable models in existence today. In
keeping with the theme of inclusion, our other articles address
worker-owned cooperatives. Cooperatives, generally speaking, are
simply businesses owned and operated by a group of individuals for
their mutual benefit. Cooperatives come in many forms -- worker- or
consumer-owned and operated -- and are found in almost every
industry: from farming to childcare to telecommunications.
What cooperatives offer are the means for individuals to work
together toward a shared aspiration and to meet economic, social and
cultural needs. Cooperatives are financially sustainable and morally
grounded. As one interviewee stated to me, cooperatives are a way to
'recover human beings' as they offer employment opportunities to many
of the disenfranchised in many societies -- ex-offenders, women, the
poor, non-native language speakers, and the physically disabled.
The work on cooperatives in this issue is based on a combination of
research and firsthand interviews with worker-owners. It includes a
list of tenets that are being used to govern one developing
cooperative, the Workers Diner, in Brooklyn, New York, as an example
of how worker-owned cooperatives are managed.
Dena Hurst
-=-
I. 'A NEW FORM OF DISCRIMINATION: CREDIT REPORTS AND HIRING
PRACTICES' BY CHRISTOPHER M. CALDWELL
The use of credit reports by employers to make employment decisions
is both widespread and widely discussed. Employers perform credit
checks and use either the information contained in the report, or the
credit number resulting from the check, to make decisions concerning
hiring, promotion, and even retention. The practice has come under
criticism that has led to various restrictions and limitations. The
present goal is not to determine the legitimacy or merit of various
restrictions, but to investigate the moral legitimacy of using credit
reports to make employment decisions at all. Although the practice is
legitimate in a very narrow set of circumstances, use of such reports
broadly is both prudentially and morally wrong.
Employers perform credit checks on potential or actual employees
based on the assumption that they are able to determine something
about either the character or skill set of the individual whose
credit is checked. If the credit check is used on the grounds that it
reveals important information about character, the assumption is that
an individual's credit report is a reflection of that individual's
overall responsibility. The assumption may or may not hold in
general, although clear counterexamples of individuals who are
responsible employees with bad credit can easily be provided.
However, even if the assumption holds true in general, the practice
is objectionable on various grounds. In addition, the idea that a
credit check might reveal an individual's skills as related to
handling money or financial acumen is similarly capable of being
disproven in particular cases by counterexample. And, again, even if
the assumption that people with good credit reports possess good
financial skills and acumen is true in general, the practice of
blanketly using credit reports for hiring, promotion, and retention
on this ground is still morally objectionable.
Before turning to the illegitimacy of the practice more broadly, the
legitimacy of the practice in a narrow set of circumstances must be
acknowledged. An individual's credit report does appear to be
relevant to employment decisions if the job directly involves
someone's financial management skills. However, some care must be
used here. Many jobs, from serving as a cashier at a dairy bar to
working as a CFO in a large company, have some financial management
components. However, for a credit check to be justified and
legitimate, the job must centrally involve those skills. In other
words, the main responsibility of the job must be the management of
financial assets. Notice, an accountant whose job is purely the
recording of data and balancing ledgers is not managing financial
assets in the relevant sense. Such an accountant is not making
decisions concerning the allocation of various assets, but only
keeping records of where the various assets are held or spent.
Additionally, a mid-level manager who has access to a budget and
makes various decisions concerning how that budget is to be spent may
not fit this description depending upon the level of oversight of that
budget which exists within the corporation. Depending upon the
budgetary governance structure, another individual within the
corporation may have to approve every financial decision. In such a
structure, the acquisition of the credit report of the mid-level
manager would not be legitimate, although the acquisition of the
credit report of the individual who approves or denies the budgetary
requests would be legitimate. Thus, only for a few positions within a
corporation would the use of credit reports on the grounds that the
credit report reveals an individual's financial management skills be
justified.
However, difficulties justifying the use of credit reports exist even
if a job centrally involves financial management skills. An
individual's credit report does not necessarily accurately represent
financial management skills. The skills to manage financial assets
are not identical with the application of those skills as the
application is easily affected by outside factors. For example,
external relationships can easily affect the application of financial
management skills. If an individual joins her financial resources with
another individual whose level of financial responsibility is
radically different from her own, either much higher or much lower,
then her credit report will not be an accurate reflection of her
financial management skills, but a reflection of the collective
skills of her and her financial partner. Additionally, other outside
factors may affect the application of those skills. If an individual
faces some financial hardship, e.g. a major medical expense, then her
credit report may reflect that hardship instead of her financial
responsibility. Thus, even in cases where the use of such a report is
legitimate, the information in the report must be carefully employed
as a part of the employer's decision-making process, and not used as
a substitute for decision-making. In other words, if two employees
whose jobs involve financial management are both being considered for
promotion, it would be morally justifiable to use credit reports on
the two individuals as part of the process of deciding which
individual to promote, but it would not be morally justifiable to
simply check the credit reports and assign the promotion to the
employee whose credit rating was superior.
Credit reports are used much more broadly, however, in the hiring of
positions not related to financial management skills. Admittedly,
there are often limits upon how these reports are used and gathered,
e.g. in the United States individuals must agree to the credit check,
and the information gathered cannot be retained as part of an
individual's personnel file. Although the acceptability of such
provisions is not the focus of the paper, an obvious problem must be
stated. If an individual is applying for a job or a promotion and is
told that a credit report is necessary for application, then the
option whether or not to consent is not, in fact, much of an option.
The significance is not about this provision itself, but in the fact
that even the most common limitation placed upon gathering such
reports is ineffective and problematic. Such problems lead us to
investigate the practice itself directly.
The practice is wrong both prudentially and morally. Prudentially,
such reports will provide much information that is simply not
relevant to the particular position for which an individual is being
considered. Consider the basic entry-level position in a major
corporation and the type of individual likely to apply for such a
position. The position is not going to require the employee to manage
large amounts of money for the corporation without a significant
amount of oversight. The skills the individual more likely needs are
technical and/or technological skills of some variety, depending upon
the type of industry. Thus, any information gathered from the credit
report is simply irrelevant as the report will not provide any
information about the actual skills needed to perform the tasks
required by the position. Additionally, consider the type of person
likely to apply for such a position. The likely candidate is probably
relatively young without much of a credit history to speak of, or
perhaps an individual retired from another career, for whom a great
deal of more relevant job performance data will be available. Thus,
the information gathered is not likely to be a very accurate picture
of the candidate's responsibility, one way or the other. However, as
many jobs and most job candidates do not fit this description or
scenario. Thus, prudential wrongness only illustrates that in certain
situations and cases the practice is wrong. Morality takes over at
this point of the analysis.
The practice is morally wrong as it ultimately constitutes a form of
discrimination with unfair consequences upon a certain group of
people, i.e. the poor. First, note that individuals will be
eliminated from consideration for a position based upon information
that they do not control. One is not in control of the way that
credit reports are generated or even the information that is used in
those credit reports. For example, an individual's credit score will
be reduced if there are a number of credit checks done all at the
same time. If one is applying for home loans and wants to compare
various rates, then the various places she applies for a home loan
will all run credit checks. These checks alone will lower her score.
What matters here is not how much the score is lowered, but that the
lowering of her credit score is beyond her control. However, this is
not the more pernicious manner in which an individual's credit score
is beyond her control.
The more pernicious manner in which an individual is not in control
of her credit score is how the use of credit reports in making hiring
decisions constitutes a form of discrimination. If an individual is
living in poverty, or even in the lower middle-class, then the types
of opportunities and resources needed to improve one's credit score
may simply not be available. Any individual who is living in poverty
who is looking for a job is at an immediate disadvantage once credit
reports become central to the hiring process. If a person is living
in poverty out of no cause of her own, then she will not have the
opportunities to develop a credit history in the same way as a person
who is living in financial comfort out of no cause of her own. A
person from a more affluent background will have individuals such as
parents to co-sign for loans to help establish credit in a way the
individual from a less affluent background will not. More
immediately, a person from a more affluent background will be able to
open a line of credit and rely upon others to help pay for
expenditures on that line of credit in the way that the other
individual will not. Thus, a central contributing factor to an
individual's credit score, her initial economic situation, is simply
beyond her control.
In relationship to hiring practices, even if the individual living in
poverty has all of the same skills and the same educational background
as another candidate, she will be deemed inferior. This is unfair as
the comparison is based upon her credit score, a factor outside of
her control to a considerable degree. The use of the credit report
constitutes a form of discrimination in two ways. First, since the
content of the report is significantly outside of the control of any
individual, the individual is being punished for something she simply
cannot control. This is akin to punishing someone for race, gender,
age, or disability, all of which are both beyond an individual's
control and protected under anti-discrimination laws. Secondly, the
use of the report disproportionately affects the impoverished.
Obviously, individuals living in difficult economic situations are
not able to improve their credit score without first gaining more
economic resources. However, the use of credit scores makes it more
difficult for such individuals to gain those resources through better
employment. The negative effects of the use of these reports is thus
much more significant upon the impoverished as individuals attempting
to improve employment are unable to do so. A vicious circle develops
in which a person cannot escape economic hardship due to the economic
hardship itself. The use of these reports privileges those individuals
who have a certain background that, importantly, is not within their
control while punishing those with a different background. Thus, the
use of the reports clearly affects the impoverished more
significantly than more affluent individuals.
Thus, the practice of using credit reports in employment decisions is
wrong both prudentially and morally. Ultimately, such a practice is a
form of discrimination as individuals are harmed or benefitted based
upon characteristics that are irrelevant and outside of the
individual's control. The use of credit reports in making hiring
decisions fulfills both of these conditions. The frequent irrelevance
of the information brings in the notion of prudential wrongness.
However, the moral wrongness of the practice is of paramount
importance. Given the immorality of the practice, the practice should
clearly be abandoned. Obviously much more needs to be said concerning
what background information is both prudentially efficacious and
morally acceptable.
(c) Christopher M. Caldwell 2010
E-mail: ccaldwell@vsu.edu
Christopher M. Caldwell, Ph.D.
Assistant Professor
Dept. of History and Philosophy
Virginia State University
-=-
II. 'PROFITS AND SUSTAINABILITY: LESSONS LEARNED FROM WORKERS'
COOPERATIVES' BY DENA HURST
There have many treatises written praising and condemning greed and
its role in the capitalist will-to-profit. The distinction is usually
made along political lines, with those to the left viewing greed as
the force that leads to the exploitation of the many in order to
privilege the few and those to the right adopting a pseudo-Smithian
position that greed is the force that makes the world go 'round.
Gross generalizations, surely, but acceptable as the purpose here is
not to choose one side, but to show that both perspectives -- under
the current interpretation of capitalism -- are correct.
As Slavoj Zizek aptly explained in 'To Each According to His Greed'
(Harper's, Oct. 2009), the dilemma presented by economic crisis is
not a moral struggle between the working class and corporate barons.
In the current global system, both groups need one another in order
to function, and any restrictions on one or protections for the other
ripple out to impact both. Thus, the political question is never
whether or not there should be government intervention in the
economic sphere, but rather at what point and to what extent.
Zizek's claim is supported in any number of 'lessons learned'
articles from various sources, including The Wall Street Journal and
The Economist. Even free market advocates have seen value in
government tightening regulations on certain business practices. The
recent recession has demonstrated how widely and deeply economic
crises can be felt and how intertwined the various economic sectors
are. More importantly, perhaps, it has clearly shown how those who
take the risks are not the only ones who suffer the consequences in
the event of failure, and this is the overarching reason that
government intervention is inevitable.
However, increased government intervention will only serve to balance
the inequities that will continue to be present in the system. It can
limit some risky decisions and mitigate the impact of others; it can
try to strengthen barriers around economic spheres to so that the
spillover of failures can be better contained. Though the rules may
change, the game will stay the same. To change the game requires a
more fundamental shift.
If new business practices are truly desired, they cannot be found
through reformist measures. Reforms maintain the existing structures,
adding elements to make any undesirable 'side effects' more palatable.
They cannot be forced through greater government intervention as such
intervention is an integral part of the capitalist structure as it
currently exists. Businesses themselves can regulate themselves, but
greater regulation will not substantively change the motives
underlying current practices.
One place to look for new business practices is worker cooperatives.
While cooperatives are by no means a new development, that they have
been operating successfully in several countries and that many have
sustained themselves as long as many major corporations should be
reason enough to take a closer look. The worker-run factories in
Argentina are probably the best known examples due to the success of
the documentary The Take. However, there are documented successfully
functioning worker cooperatives in France, Italy, Canada, Venezuela,
Israel, and India. In the United States alone it is estimated that
there are almost 30,000 cooperatives of various kinds providing
850,000 jobs (http://go.coop and
http://www.uwcc.wisc.edu/impact.html).
What benefits do cooperatives offer? Financially, they are proven
sustainable businesses, and they operate in many industries (grocery,
farming, technology, manufacturing and childcare/ teaching to name a
few). They generally are responsive to local needs and use local
resources and labor. Morally, however, their commitment to principles
such as workplace democracy, equality and autonomy make them a
desirable system of organization.
Workers' cooperatives offer a structure through which workers own and
democratically control their workplace. Products and services are sold
at a profit. Worker-owners work in the business, manage it, and govern
it; they hold all decision-making power and authority. Decisions are
made democratically under a one worker/one vote system, regardless of
any investment of resources a particular worker-owner might have made.
Worker-owners control the capital, resources and work process. Profits
and losses are shared by the worker-owners. Salaries can vary
according to skill, education, or experience, though salary
differences are democratically approved and are generally small
compared to those in most modern corporations.
If workers' cooperatives are so great, why are there so few of them,
relatively speaking? There have been many arguments put forth, and
all probably explain some aspect of why cooperatives have not
flourished to the same extent as other means of organization. There
are barriers to entry as many people do not have excess capital to
invest in a cooperative. Lending policies may not deem cooperatives
acceptable business risks. They can be less efficient, at least at
certain points of development, since major decisions require
collective action. And there is the historical association of
workers' cooperatives socialism, communism, and anarchism, all of
which were long ago dismissed as nonviable economic forms,
particularly in the United States.
So, while cooperatives might offer a morally preferable approach to
workplace organization, there is a gap between moral ought and
financial reality that looms large. It is quite unrealistic to expect
a mass shift toward the cooperative structure. From a practical
perspective, for large businesses it would require tremendous legal
undertakings. From a moral perspective, it would require not only a
mental shift to accept a view of human nature that is counter to that
espoused in capitalist ideology; it would also require focused
attention on cultivating a moral character able to live up to the
expectations of such a view of human nature.
But these hardships are not grounds to dismiss cooperative
organization outright. And what can easily happen in today's
businesses is a shift beyond the established consciousness of social
responsibility and inclusion toward a value system that mirrors that
of workers' cooperatives, a system that allocates rewards based on
participation and social impact rather than the bottom line. The
foundation for such a system is outlined in the Rochdale Principles,
the guiding principles of most cooperatives
(http://www.ica.coop/coop/1937.html).
Foremost, workplaces would need to be democratically controlled.
There is already a shift in this direction, with greater recognition
of the value of worker input. However, most business literature that
addresses this idea discusses it from the perspective of increased
revenues. As people feel more vested in the decision making in their
workplace, they feel more valued, morale improves, productivity
improves, and absenteeism and turnover decline. Rarely is it stated
that this is simply a more moral approach to running a business as it
shows equal respect for each individual and honors the democratic
principles so highly prized in the political sphere. In such a
system, individuals are treated as ends in themselves, and not as a
means to some other end.
It would be relatively easy for most businesses, large and small, to
add more democratic elements to their decision making processes. This
does not mean that every decision must be approved democratically;
this would be too time consuming and expensive (even in workers'
cooperatives). It does mean that major changes or shifts could first
be discussed through worker assemblies or debates or decided through
employee voting.
There would need to be a shift away from the idea that businesses
exist solely to make money, and particularly to make money primarily
for those who invest capital. Profit is a measure of sustainability;
a business that does not generate revenue in amounts that exceed
expenses will not survive. Even workers' cooperatives must turn a
profit. The shift that should occur is to see profit as a means to an
end, not an end in itself. Taking away profit as the raison d'etre for
businesses means that their purpose of needs to be redefined.
In cooperative systems, one purpose businesses exist is to provide
creative outlets for those involved in the production process. In
short, businesses exist to benefit the workers. The workplace is a
place of learning and collaboration, where ideas can be shared, new
skills developed, and creative urges expressed. Toward this end, it
would be easy for workplaces to be zealously open and
nondiscriminatory to a point well beyond compliance with current
legal standards. Workplaces could diligently push a culture shift
that embraces diversity in race, gender, sexual orientation,
religious practices, political views, ability, and so forth,
reminding those in the process that out of diversity comes creativity
and innovation. (There is much documentation on this, such as Nigel
Bassett's article, 'The Paradox of Diversity Management, Creativity
and Innovation,' Creativity and Innovation Management, Vol. 14, Iss.
2, 2005.)
Another purpose of any business is to produce desired products or
services. The complexity of society necessitates specialization; thus
businesses of various types and sizes must exist to fulfill local,
regional, national and global needs. In workers' cooperatives, there
is an emphasis on producing desired products; workers are able to
take part in fulfilling societal needs and others are able to have
their needs met. In addition, workers' cooperatives emphasize service
to others and many invest a portion of their profits in their local
communities (e.g., education, transportation, housing) because it is
often part of their mission to do so.
This is another relatively easy task for businesses to begin
immediately. Most large corporations have foundations through which
they donate a portion of profits to charitable organizations or to
individuals to help address social problems. However, such investment
is always measured in terms of the impact it will have in the
community as well as the return on investment to the business: 'doing
good' has marketable value. Rather than emphasizing the dollars
generated from community investments, businesses could focus on more
meaningful measures that more accurately reflect the greater social
impact. This refocusing could be a relatively easy endeavor for
businesses today, particularly if it is accepted that increased
profit is not the sole measure of success.
As in other types of organizations, financial rewards are present in
a cooperative system, and such rewards are based on income earned by
the business, gross or net. The lesson learned from cooperatives,
though, is that the reward goes to those whose hard work produced the
financial return, either by reinvesting in the cooperative business,
the community served, or rewarding individual members in a manner
democratically agreed upon. In this way, with rewards going to those
who actually do the work and not those who merely invest money,
workers are valued over capital.
This, perhaps, is the greatest lesson cooperatives can share. For
cooperatives to function, they must adhere to a moral underpinning
that is humanist at its core. Their purpose is to promote
collaboration among equals and to provide opportunities for
individuals to contribute to something greater than themselves. In
terms of Maslow's Hierarchy, cooperatives give individuals a
structure in which they can meet all needs, including
self-actualization. Cooperatives promote a sense of community and
provide a safety net for those in need. They offer a balance to
individualism and egoism while at the same time emphasizing
self-governance and self-reliance.
What should be gleaned from the analysis of the recession is not
simply insight as to how it happened -- such cyclical events are
inevitable -- or why nobody noticed it coming; many people saw it
coming but could not make themselves heard. To return to Zizek, he
concluded his article with the statement, 'There is a real
possibility that the primary victim of the ongoing crisis will not be
capitalism but the left itself, insofar as its inability to offer a
viable global alternative was again made visible to everyone.' The
merits of leftist or rightist thinking can be left for another
article. However, Zizek's point is well made; there are no viable
alternatives to the current system being offered at a national or
global level.
This is the time to think about all available options, to raise the
core questions that were debated during the myriad bailout
discussions that took place in legislative halls and coffee houses
around the world. In the words of Kropotkin,
In our mutual relations every one of us has his moments of
revolt against the fashionable individualistic creed of the
day, and actions in which men are guided by their mutual aid
inclinations constitute so great a part of our daily
intercourse that if a stop to such actions could be put all
further ethical progress would be stopped at once. Human
society itself could not be maintained for even so much as
the lifetime of one single generation.
Discussions should extend beyond how to fix the current system and
question why we have such a system in the first place.
(c) Dena Hurst 2010
E-mail: klempner@fastmail.net
Dena Hurst, Ph.D.
Department of Philosophy
Florida State University
Tallahassee, Florida, United States
-=-
III. 'ESSENTIAL CHARACTERISTICS OF A WORKER COOPERATIVE' BY WILLIAM
CERF
The following tenets are currently being used to develop the Workers
Diner in Brooklyn, New York, a 'traditional New York-style'
worker-owned diner that will be opening its doors in April 2011.
These tenets were developed over the course of several years and are
based on an extensive collaborative process involving practitioners
working in worker-owned and other types of cooperatives.
¥ Worker-owners share a passion about the particular products and
services they offer and organize their business to provide products
and/or services that are of value to the people in the larger
community. The profits generated by this business are used to benefit
the worker-owners and the larger community.
¥ Only employees of the business are eligible to become owners. The
key is that all members own the business EQUALLY, regardless of the
number of shares issued. The business is structured to support EQUAL
ownership.
¥ When a new employee comes on board, he/she is given a thorough
introduction to the principles of worker-ownership.
¥ New employees are required to become worker-owners after an
explicit period of time on the job. This time frame should be
declared in a formal document and should be based upon the needs of
the existing members. Financial, operational and other mechanisms are
in place to facilitate this process.
¥ All information about the company's progress, its financial data
and management reports are freely available to all worker-owners in a
systematic and organized way. Time and resources are spent to educate
worker owners in the intricate details of these matters.
¥ The worker-owners elect a Board of Directors. This Board is
responsible to the worker-owners and to the larger community. The
Board hires professional management to run the day-to-day affairs of
the company. The management is responsible to the Board and the Board
is responsible to the worker-owners and the larger community.
¥ Worker-owners and professional managers need to learn new skills
and attitudes which serve this new paradigm and discard what does not
work.
¥ Elections are conducted on the basis of one share/one vote with
each worker-owner owning an EQUAL number of shares.
¥ A portion of the firm's profits are earmarked for the education
and training of worker-owners in technical and management skills.
¥ Significant time is spent learning together the skills needed to
run a business, the skills needed to create democracy in the
workplace and cross-training in different job functions.
¥ Everyone understands that we are doing something radically
different than the dominant paradigm and are committed to learning
new skills and attitudes as well as discarding what does not work.
¥ Everyone is committed to learning both a communication process
such as Nonviolent Communication and an interactive problem solving
modality such as Feedback Learning in our adventure for positive
personal and social transformation.
¥ It is critical that the Board of Directors tackle the set of
issues associated with value, equity and business finances. This is
the single most challenging issue facing worker-owned businesses and
needs to be handled very carefully. It might be advisable for the
Board to get expert help in this area. It is VITAL that ALL
worker-owners understand all of the mechanisms, processes and
procedures regarding value, equity and business finances and be in
agreement about them.
¥ When an employee leaves or retires he/she sells the shares back to
the worker cooperative; which in turn sells the shares to new
worker-owners in accordance with the mechanisms, processes and
procedures regarding value, equity and business finances. (See above)
Bibliography and Resources
Adams, Frank T. and Gary B. Hansen. (1993) Putting Democracy to Work:
A Practical Guide for Starting and Managing a Worker-Owned Business,
Revised Edition. San Franciso, CA:
Berrett-Koehler Publishers, Inc., San Francisco and Eugene, OR:
Hulogosi Communications, Inc.
Buck, John and Sharon Villines. We the People: Consenting to a Deeper
Democracy A Guide to Sociocratic Principles and Methods.
http://www.sociocracy.info
Center for Nonviolent Communication. Albuquerque, NM
http://www.cnvc.org
Gates, Jeff. (1998). The Ownership Solution: Toward a Shared
Capitalism for the 21st Century. Reading, MA: Perseus Books.
Grassroots Economic Organizing (GEO): http://www.geo.coop
Hawken, Paul. (1999). Natural Capitalism: Creating the Next
Industrial Revolution. NY: Little Brown and Company.
http://www.paulhawken.com/paulhawken_frameset.html
Krimerman, Len and Frank Lindenfield, eds. (1992) When Workers
Decide: Workplace Democracy Takes Root in North America.
Philadelphia, PA: New Society Publishers.
Leu, Lucy. (2003) Nonviolent Communication Companion Workbook.
Encinitis, CA: PuddleDancer Press.
Rosenberg, Marshall. (2003) Nonviolent Communication: A Language of
Life, 2nd Edition.
Encinitis, CA: PuddleDancer Press.
Whyte, William Foote and Kathleen King Whyte. (1988) Making
Mondragon: The Growth and Dynamics of the Worker Cooperative Complex.
Cornell University: Industrial & Labor
Relations (ILR) Press.
(c) William Cerf 2010
Workers Diner (Brooklyn, NY) and Jones International University
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