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If employees are more motivated, one would expect a greater level of employee productivity. So by the metrics of productivity, productivity growth, and most of

by Kalium 10y ago

If employees are more motivated, one would expect a greater level of employee productivity. So by the metrics of productivity, productivity growth, and most of the metrics used to measure corporate performance. The obvious response, of course, is that none of these metrics matter because they only apply to traditionally structured highly inequitable corporations. There's a lot of truth to this! Yet it perhaps attempts to dodge the question. If cooperatives are more efficient at convincing people to be more productive, you would expect that this would allow efficient, motivated cooperatives to outperform traditional corporations and their inefficient, demotivated, dehumanized structures by financial metrics.

josephg 10y ago
> by financial metrics. There are three stakeholders in any company: * The owners (stockholders) * Employees * Customers When a company makes profit (eg, they manufacture a mattress for $500 thats worth $1000), the profit is divided between those three groups of people. How the money gets divided depends on the relative power those groups hold. - In a market with lots of competition, the price goes down and the customers get a windfall through cheaper products - When there's not enough supply of labour (like in software), the employees can demanding higher wages, better working conditions or shorter hours - And otherwise, usually the owners get the profits. The easiest metric of a company is to evaluate profit to shareholders. Thats not what coops are trying to optimize for. Instead they want a high quality of life for their employees. So I would expect you would see coops rated poorly, even when they're functioning (for their employees) very well.
- Kalium 10y ago
  You're right! Cooperatives have a fundamentally different structure that makes the typical metrics of return to non-employee shareholders hard to use or make sense of. Fortunately, I think this is addressable. Cooperatives still have owners, be they employees or customers. The structure works by merging two of the three legs you sketch out. For worker-owned cooperatives, it should still be possible to evaluate how effectively they return profits to owners. You just have to evaluate it a little differently, perhaps by classing worker pay as dividends (or maybe the premium over non-coop competition). Plus, you can look at things like their offerings and the cost or quality thereof. I don't know anyone who goes to Rainbow Grocery Coop for reasonable prices. To recap, you're absolutely right. Coops are not optimizing for returning profits to uninvolved investor/owners. Instead, they are optimizing for returning profits to actively involved who act as one of the active groups above. As a result, I would think that metrics for evaluating a business could still be calculated and examined for a enterprise. After all, cooperative enterprises are still businesses.

by Kalium 10y ago

josephg 10y ago

> by financial metrics. There are three stakeholders in any company: * The owners (stockholders) * Employees * Customers When a company makes profit (eg, they manufacture a mattress for $500 thats worth $1000), the profit is divided between those three groups of people. How the money gets divided depends on the relative power those groups hold. - In a market with lots of competition, the price goes down and the customers get a windfall through cheaper products - When there's not enough supply of labour (like in software), the employees can demanding higher wages, better working conditions or shorter hours - And otherwise, usually the owners get the profits. The easiest metric of a company is to evaluate profit to shareholders. Thats not what coops are trying to optimize for. Instead they want a high quality of life for their employees. So I would expect you would see coops rated poorly, even when they're functioning (for their employees) very well.

Kalium 10y ago
You're right! Cooperatives have a fundamentally different structure that makes the typical metrics of return to non-employee shareholders hard to use or make sense of. Fortunately, I think this is addressable. Cooperatives still have owners, be they employees or customers. The structure works by merging two of the three legs you sketch out. For worker-owned cooperatives, it should still be possible to evaluate how effectively they return profits to owners. You just have to evaluate it a little differently, perhaps by classing worker pay as dividends (or maybe the premium over non-coop competition). Plus, you can look at things like their offerings and the cost or quality thereof. I don't know anyone who goes to Rainbow Grocery Coop for reasonable prices. To recap, you're absolutely right. Coops are not optimizing for returning profits to uninvolved investor/owners. Instead, they are optimizing for returning profits to actively involved who act as one of the active groups above. As a result, I would think that metrics for evaluating a business could still be calculated and examined for a enterprise. After all, cooperative enterprises are still businesses.