Dr Anthony Jensen, University of Newcastle (a world leader and practitioner who specializes in employee owned businesses and business ethics), presented this paper at C-Mac’s Board Meeting four months after the business was transferred to a 100% employee owned workers co-operative.
The aim of this paper was to make C-Mac aware of the hurdles that face co-operatives as they progress through their life cycle.
Survival seems assured. Job motivation high. Members have high commitment. Tolerance and experimentation.
Destabilising Forces — if not a homogeneous culture
These set up forces of decline which begin to take hold.
Need ability to overcome general forces of decline. Death, convergence and incorporation.
a. Horizon problems — failure to maintain physical capital in order to maximise cash flow. Excessive debt burden on current borrowing.
b. Tension — old members don't want to share revenue flows with new members
c. Co-operative Spirit and High Commitment Declines. Investment decisions based on self interest not collective good. Discourages investment
d. Overinvestment in early stages replaced by undrinvestment
5. Self Extinction Forces — peculiar nature of co-operative enterprise — natural forces of self extinction. Fundamental to neo classical literature namely mainstreameconomists.
a. Co-ops will reduce size of membership
b. Employ non members
c. Liquidation — founding members leave or retire.
d. Increase net worth of business sell and make a profit
e. Ageing and retirement. Fail to recruit new members
a. Regeneration constantly learning organisation
b. Manage the tensions and debates
c. Don't let the tensions become unmanageable
d. Key role of Manager to manage tensions
e. "Stay humble"
Anthony Jensen and Frank Webb
Would you like to learn what C-Mac Industries Co-operative are working through to transform the business into a "High Performing Manufacturing Workers Co-operative"?