The traditional business model puts a handful of controllers in power, the shareholders, who make all the rules. They are the ones who are taking the risks, so it’s only natural they control what goes on. In this system, the workers are merely resources, leveraged to make a profit for the investors. They’re only duty is to show up and do the work they are told to do.
If you’re on the bottom looking up, this is the voluntary slave model.
There is no democratic process in this model. The few investors, stakeholders, and hired proxies make all the decisions. The employees have no say, because they have no vested interest in the company’s success or failure. The relationship between employee and stakeholders centers around the exchange of money for the employee’s time and labor.
This has been the accepted model for many decades now. It is the model that serves the most people and keeps them safe and happy. Or least that’s the theory. The more money the company makes, the more people they can employ and the more the economy grows, which in this context means stock prices rise.
But this model also brings with it resentment. The balance of wealth leans heavily to the handful of stakeholders, who will do anything to maximize their profits. The employees are merely pawns, and they know it to some degree. It creates an us against them mentality, where workers want more say in how things are did and the stakeholders want to minimize as much as possible the price they pay for the employee’s labor. So it ends up being a battle.
The stakeholders aren’t to be vilified though. They are simply leveraging the system to their benefit. It is a free country after all, and if the employees aren’t happy with the deal they’re getting, they are free to go do something else or become a stakeholder themselves.
Another business model whose principles date back to 1844 is the worker cooperative. In this model, the workers have all the control. They are the stakeholders, investors, managers, everything. They are the ones taking the risks, because if the company doesn’t make any money, they don’t make any money.
In this model, no one is looking up to the top for direction. It is a democratic system where every employee has one vote, and usually everything the company does is dictated by popular vote. The workers control the company.
The goal of the company is still to maximize profits, but instead of only a few receiving the benefits when this occurs, the employees receive it all. There is no great divide between the top earners and the bottom earners, everyone is essentially equal. There is no king sitting on the throne dictating orders to the working peasants. The view from the bottom is pretty much the same as the view from the top.
Now whether this model is “better” than the traditional one is debatable. It certainly has appeal given that the people performing the work are the ones in charge and the success of the company directly benefits them, instead of just being scraps left over after the kings take their share. It’s also appealing for the risk involved. If the company doesn’t succeed, i.e. turn a profit, the employees don’t make money either. If the company folds, the workers are out on their ass, which beats being under the reign of a dictator that could cut them loose in a moments notice no matter how productive they are.
Which would you prefer (and neither is a choice)?
