THE MEMBER-CONTROLLED ENTERPRISE MODEL
An enterprise is an organization created for a purposeful or industrious undertaking. Some enterprises may operate outside of the framework of ‘the market’, for example state enterprises or charities, but here we are concerned with those that function within the reality of the market. An enterprise model is a simplified design or structure used to define the essential features and characteristics of a specific system of enterprise.
Different systems of enterprise are used within different forms of enterprise, any specific model of enterprise may be used in a range of different types of enterprise that are of a similar form. Among the most common forms of enterprise are sole traders, partnerships, private limited companies and public limited companies, all of which are business primarily run for profit. There are also enterprises that are not run with the purpose of making profit but instead having other specific purposes, these include various forms including a wide range of social enterprises run for charitable, environmental or other purposes. Then there are co-operatives and mutuals, which are enterprises run primarily for the benefit of their members and that function using the member-controlled enterprise model.
Imagine a football match where some players believe they are playing soccer, while others think they are playing American football - no doubt you can picture the ensuing chaos. Well, this is what happens in some co-ops & mutuals when those running the enterprise think they can just run it as though it is a commercial business.
Without the clear-cut guidance that is provided by the appropriate enterprise model, all too often co-ops & mutuals are managed towards a false purpose, the wrong outcomes and inappropriate values.
"In a member-controlled enterprise it is the achievement of the specific agreed outcomes that provides ordinary members with the motivation to become and remain members, all of the defining features of the member-controlled enterprise model are designed to ensure the continuing achievement of these outcomes"
Members of co-ops & mutuals want:
A better deal, a better organization and a better future
PURPOSE, FUNCTION AND OUTCOMES
THE OVERALL PURPOSE:
The purpose of a member-controlled enterprise is to achieve those outcomes that are agreed by the membership.
The main function of a member-controlled enterprise is to intercede within the market in the best interest of its members.
The most essential outcome routinely sought by members is a better deal* than is currently available within the market. Additionally, members want their enterprise to be both trustworthy and sustainable.
The specifics of the desired outcomes (objectives) need to be separated into those that are immediate (operational) and those that are longer-term (strategic). The initial purpose of a member-controlled enterprise will be to meet the specific needs of the founding members but ought to evolve so as to meet the needs of current members as circumstances change.
* A ‘better deal’ can mean different things to different people but it generally also means a ‘fairer deal’. It can mean getting a fairer price for goods or services bought or sold - including for the knowledge, skills and labour of members. However, it can also mean securing access to services that would not otherwise be available, such as a village shop, rural transport, access to credit, etc.
Co-operatives and mutuals - to be valued for what they deliver
last updated: February 2012 © Edgar Parnell 2012