When Workers Own Their Companies, Everyone Wins • Hacker News Board

Re: When Workers Own Their Companies, Everyone Wins

#31

Post by walshemj » Sat, Aug 02, 2014, 1:06 PM UTC

corford wrote: post #15

In the UK, employee or customer owned businesses are a mixed bag. We have some very good ones (John Lewis, Nationwide) and some bad ones (the Co-op group). I think whether or not a business is employee owned is less important for success than it having a good and capable management team.

The coop got into trouble because they where lent on by the government to solve some of the structural problems in the banking industry and at the same time had a botched transfer of undertaking from a building society.

Not that combined group didn't have some structural issues and some less than stellar board members - needed some stroppy buggers like me on there.

Re: When Workers Own Their Companies, Everyone Wins

#32

Post by walshemj » Sat, Aug 02, 2014, 1:11 PM UTC

Certhas wrote: post #9

ExpiredLink wrote: post #7

Coop models may work if decision-making structures are defined clearly and 'economically'. >> expand the coop model by associating it more closely with unions. A receipt for disaster. Some European states had this models in the past and completely abandoned them.

Care to elaborate? Unions function differently in different EU states: In the UK they were pretty much killed, in France they act as antagonists to the business side, in Germany they act more collaboratively with the business side. In the latter case in Germany every large enough commpany has to have a democratically elected workers council, that gets a seat on the board. While not the same as co-ownership, this demo…

But how does this apply to coops and unions - it gets a bit more complex where all the workers own the company what role does the union have?

Re: When Workers Own Their Companies, Everyone Wins

#33

Post by barry-cotter » Sat, Aug 02, 2014, 1:11 PM UTC

rmc wrote: post #12

barry-cotter wrote: post #4

I'm sure these companies are more humanely managed and have happier employees but I doubt they're economically efficient. If they were they'd outcompete non employees owned companies. We even have an entire sector of employee owned companies where they obviously do win consistently, professional services firms like accountancy (PWC, KPMG, Deloitte, Ernst & Young) or management consulting (McKinsey, Bain, BCG). All th…

You're presuming a perfect market where the most economically efficient organisation will win. There is no guarantee that our current economy is like that.

ADBOC. This is like the efficient market hypothesis, the strong version is wrong and the weak version is so weak as to be almost tautological. In a perfect market the most economically efficient organisation would win, end of story. What we've got isn't that but it's an approximation thereof. The closer it gets to fulfilling all the conditions the more likely it is that the outcome is economically efficient.

The only economy I'm aware of that had a lot of employee owned cooperatives was Yugoslavia. It worked better than Soviet bloc communism as far as resource allocation and living standards went but not as well as capitalism.

Co-ops don't expand as much as privately or publicly held firms because they maximise something approximating profit per worker whereas normal firms maximise straight profits. I think I picked up that argument from Paul Krugman. It's been a long time since I read the argument so I may be misremembering but he used Harvard and the UC systems as examples. Harvard doesn't expand its student body, this maximises faculty utility, the UC system does, this maximises student utility. The article even mentions that worker's co-ops have higher profitability than normal firms.

Re: When Workers Own Their Companies, Everyone Wins

#34

Post by walshemj » Sat, Aug 02, 2014, 1:12 PM UTC

barry-cotter wrote: post #4

I'm sure these companies are more humanely managed and have happier employees but I doubt they're economically efficient. If they were they'd outcompete non employees owned companies. We even have an entire sector of employee owned companies where they obviously do win consistently, professional services firms like accountancy (PWC, KPMG, Deloitte, Ernst & Young) or management consulting (McKinsey, Bain, BCG). All th…

Partnerships are not coops

Re: When Workers Own Their Companies, Everyone Wins

#35

Post by asgard1024 » Sat, Aug 02, 2014, 1:20 PM UTC

nraynaud wrote: post #16

I think the article does a poor job of explaining why factories are generally not coop. When you have 1 employee = 1 vote, you can't sell (a significant amount of) capital to external entities. This leaves you with borrowing money, for which you can't use a significant amount of capital as a collateral. That leaves the coops mostly to sectors that are not capital intensive (mostly service and retail). There is a bit…

Yes, that's a big problem. The owners of capital want to have a say about what the company does, because their money are at stake.

Perhaps this is just a cultural thing though. Take money lending - although a bank gives capital to someone else in exchange for profit, it doesn't require strict controls over the actual use of the money; it relies on contract law to get the money back.

Similarly, the executives of the publicly traded companies have responsibility to shareholders. Perhaps a similar agreement could be institutionalized with the coops too (yet preserve their democratic nature).

Re: When Workers Own Their Companies, Everyone Wins

#36

Post by moron4hire » Sat, Aug 02, 2014, 1:28 PM UTC

up_and_up wrote: post #28

Here is a list of the largest majority employee-owned companies in the USA: http://www.nceo.org/articles/employee-ownership-100 . That is companies that are >50% employee owned. Companies marked with an asterisk are 100% employee-owned. The biggest 100% employee-owned company is Lifetouch Photography in MN with 25,000 employees. But Co-ops and employee owned companies are not the same thing. I have worked for several…

Oh hey, two not far from me in Virginia, and they're both technology companies. Maaaaybe I'll give their job pages a little looksie.

EDIT: maaaaybe I'll look at their websites before I post next time. I really don't want to be involved in the war industry.

Re: When Workers Own Their Companies, Everyone Wins

#37

Post by Joeboy » Sat, Aug 02, 2014, 1:31 PM UTC

corford wrote: post #15

In the UK, employee or customer owned businesses are a mixed bag. We have some very good ones (John Lewis, Nationwide) and some bad ones (the Co-op group). I think whether or not a business is employee owned is less important for success than it having a good and capable management team.

> We have some very good ones (John Lewis, Nationwide) and some bad ones (the Co-op group).

The co-op group was a good one for a century and a half, but went astray in the last few years.

Edit: For those unfamiliar, the story of Co-op bank chairman Paul Flowers is good lurid fun.

https://en.wikipedia.org/wiki/Paul_Flowers_%28banker%29

Re: When Workers Own Their Companies, Everyone Wins

#38

Post by consz » Sat, Aug 02, 2014, 1:46 PM UTC

I believe this is one of the big reasons I chose to go towards trading instead of working in SV. The prop trading companies (and even big finance firms like Goldman) have far more egalitarian profit-sharing structures than places like e.g. Google or Facebook, and you can really see that employees of those trading firms are a lot more motivated in their work than a programmer at a typical SV firm (even at startups that I've seen).

Re: When Workers Own Their Companies, Everyone Wins

#39

Post by yummyfajitas » Sat, Aug 02, 2014, 2:03 PM UTC

rmc wrote: post #12

barry-cotter wrote: post #4

I'm sure these companies are more humanely managed and have happier employees but I doubt they're economically efficient. If they were they'd outcompete non employees owned companies. We even have an entire sector of employee owned companies where they obviously do win consistently, professional services firms like accountancy (PWC, KPMG, Deloitte, Ernst & Young) or management consulting (McKinsey, Bain, BCG). All th…

You're presuming a perfect market where the most economically efficient organisation will win. There is no guarantee that our current economy is like that.

What imperfections do you believe exist that prevent efficient coops from taking over? Please be specific.

Re: When Workers Own Their Companies, Everyone Wins

#40

Post by specialist » Sat, Aug 02, 2014, 2:07 PM UTC

up_and_up wrote: post #28

Here is a list of the largest majority employee-owned companies in the USA: http://www.nceo.org/articles/employee-ownership-100 . That is companies that are >50% employee owned. Companies marked with an asterisk are 100% employee-owned. The biggest 100% employee-owned company is Lifetouch Photography in MN with 25,000 employees. But Co-ops and employee owned companies are not the same thing. I have worked for several…

Consensus decision making is like QA: they can help make sure you're solving the right problem.

The upfront effort often feels inefficient -- especially if the team is lost in the weeds -- but can save a lot of heartache.

I've used various group decisions making processes to great effect. Joint application development (JAD) sessions for project kickoffs (scope setting). Approval voting for triage (issues with most votes get solved first). Roman evaluation (thumbs up/down) for acceptance testing. Story telling for post mortems. Etc, etc.

I've also seen much wasteful decision making. I'm not smart, or yet experienced, enough to identify the qwan that makes certain teams rock and others fail.