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.

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