workers' cooperative

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workers' cooperative

an organization that is owned and controlled by those who work in it (though some in the UK have a few external shareholders). To be fully accepted as a workers' cooperative, such an organization must adhere to the general principles of the International Cooperative Alliance, including the requirement that each member has an equal vote at general meetings. Voting should not be proportional to share capital.

A critical issue that faces all cooperatives is how to organize the MANAGEMENT function: should all cooperative members be actively involved in management (as in a workers' collective), or should managerial functions be delegated to specialist managers? There is the obvious danger with the former that decision-making could be slowed down, that RESPONSIBILITY will be unclear and that many of those involved in management will not be sufficiently competent. But if specialists are employed, some of the democratic character of the cooperative will be lost. The question arising from this dilemma is whether the need to compete in markets will force cooperatives to ‘degenerate’ into conventional hierarchically organized firms.

Many believe that cooperatives are not a sustainable alternative to conventional business organizations. Proof that they could be comes from the Mondragon area of northern Spain. Here some 20,000 workers are employed in a large number of cooperatives in all sectors of the local economy. Critical to their success have been cooperation between cooperatives, facilitating the sharing of skills and resources, and the existence of a strong support structure, including a bank, providing finance and business skills. Such support is not as well advanced in the UK. See INDUSTRIAL DEMOCRACY.

References in periodicals archive ?
California's Worker Cooperative Act, (189) which went into
Discussion led to action when they contacted the Montana Cooperative Development Center (MCDC), where staff provided technical assistance on how to legally form a for-profit worker cooperative in Montana.
Joe outlined his experience as a worker-owner at a cooperative bookstore in North Carolina, a cooperative developer at the US Federation of Worker Cooperatives, and a cooperative director at the Democracy at Work Institute.
But your readers should be aware that a business owner who sells her enterprise to a worker cooperative started by her employees can reap the same tax benefits under the Internal Revenue Code that the creation of an ESOP offers.
The distinctive feature of the worker cooperative's internal organization is workers' role as both owners and managers of the establishment; they both supply capital to its operations and reap the profits.
Camille Kerr of the Democracy at Work Institute, the only national organization focused on worker cooperative development, says that institutions with a mission or history of co-op lending, like CFNE, tend to provide the initial capital.
For example, a new California law made it easier to operate as a worker cooperative and raise business capital.
Bronx, N.Y.-based Cooperative Home Care Associates, the nation's largest worker cooperative, is doing just that.
With assistance from a USDA Rural Cooperative Development grant, the California Center for Cooperative Development (CCCD) is helping to organize Solidary Farm into a worker cooperative. The work includes educating the members about the new California worker co-op statutes (AB 816) and helping draft articles of incorporation and bylaws.
At 800 member-owners, Green Taxi Cooperative is the second-largest worker cooperative in the country, the largest taxicab cooperative in the country and the largest taxicab operator in the state of Colorado.
The California Worker Cooperative Law borrowed from some of the successes of the Mondragon cooperatives by including "indivisible reserves" as an option for new cooperatives.

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