[stareatgoats]

> Decision-making in cooperatives can be very daunting for beginners.

Having 13 years+ of experience in cooperatives I can tell you that it is daunting even for old-timers. We started off with most decisions being made in weekly meeting (that sometimes dragged on for most of the day), and ended up with having monthly meetings for the large decisions, but weekly meetings in smaller groups instead. In short, meetings everywhere, about all things large and small. Meetings about whether to have consensus or majority rule, about whether the principle that everyone needs to follow a decision is sound etc etc.

Personality might have something to do with it. But making fast about turns that you sometimes need to do in a business setting is nigh impossible, which is actually hazardous to everyone in the cooperative. This might even be the primary reason cooperatives (being an old idea) hasn't survived other than as a fringe phenomena.

[dogma1138]

This is a common mistake, actual functioning cooperatives operate like any other enterprise with an set executive structure a CEO and a board of directors. The big difference is the ownership model so shareholder meetings are basically employee meetings so a successful cooperative simply runs like any other business just one where the employees are treated as the shareholders they are when it comes to decision making the bad ones are the ones trying to run like a commune and reach a consensus on everything.

[spuz]

What is the difference between a cooperative like you describe and a startup where employees are given shares?

[jlokier]

Startups that give out shares are rare. Startups tend to give options. Options take years to accumulate, and don't give any significant rights by themselves, such as voting or profit share. Employees can typically only afford to exercise options at key company financing events, because they have to sell many of the resulting shares to cover the cost of exercising and cost of tax.

Most startup employee recipients of options never get to exercise them for various reasons, often unable to due to cash flow or restrictive timing reasons, or because they aren't profitable (the employee would take a large financial loss). Many of those who do exercise the options get their shares after leaving the company or they're about to leave. And finally, of the small subset of employees who have shares as a result of exercising while still employed, the number of shares they have is a tiny percentage even in aggregate, so they have effectively no influence at shareholder meetings, if they choose to attend, and if their shares have voting rights which they don't always have.

In co-operatives, the majority of shares as well as voting rights are usually held by a high proportion of employees, so that's a completely different dynamic. As well as voting rights, it means any profit distributed as a dividend tends to go to employees as well.

[dogma1138]

Outside of startups that might not amount to anything never it’s a pretty poor habit to sell shares to cover the cost of tax. It’s nearly always more beneficial to finance the tax due through other means including taking a loan even today after the base interest increase.

But the rest is more or less correct even when the options mature and you can exercise them you usually do not get voting rights it’s nearly always restricted shares.

Also note that unlike cooperatives there is also quite often restrictions on how much stock you can own as a regular employee in a public or even private company the employee shares in cooperatives usually have a different legal framework than regular company shares.

One of the key differences is quite often as someone already mentioned is that shares in cooperative grant a single voting right to a shareholder rather than per share.

You can also have some more complex tiered holding structures such as where all the employee held company shares are issued to a single entity that represents the employee shareholding collective and that entity then grants a single share to each employee, alternatively other models than direct shareholding can be used such as trusts where the trust holds the company shares and the trustees get voting rights.

[majewsky]

In a startup, employees usually don't really have much influence even if they have shares, because each successive funding round dilutes the existing shares.

Also, there's some significant differences in how shares work between cooperatives and corporations (at least in Germany, where I live). In a corporation, you get one vote per share, and shares can be freely traded once given out. In a cooperative, you only one vote per shareholder, no matter how many shares you hold, and shares cannot be traded. You can invest into the cooperative to get shares, and you can return your shares to get your capital back, but the cooperative gets final say in who gets to hold shares.

[felurx]

Which "Rechtsform" would a cooperative be in Germany?

[joker99]

Genossenschaft

[sangnoir]

Employees are not second-class (or third-class) on share preference or dilution.

[solardev]

A coop is one person one vote.

A employee stockholder plan is one dollar one vote.

[bluesign]

So it is little worse than unions done good.

[Shoue]

That's an odd critique considering coops exist to solve the friction between unions and businesses by building the democratic control into the business itself, avoiding the need for a union.

Especially when you consider all the union busting tactics used by leadership at traditional businesses – how are you even supposed to form a union when they won't let you? Coops come at that from a different angle: you get democratic control, straight up. Don't like your leadership if you choose to structure the business that way? You can actually vote them out of their role.

[pmoriarty]

"Especially when you consider all the union busting tactics used by leadership at traditional businesses – how are you even supposed to form a union when they won't let you?"

Even when you manage to form a union, companies have ways of screwing you over.

Case in point was the recent successful unionization of a Starbucks location in Seattle you might have heard about on the news. Starbucks' reaction? They just closed that location.[1]

[1] - https://www.cnn.com/2022/11/22/business/starbucks-closure-un...

[sokoloff]

https://www.nlrb.gov/about-nlrb/what-we-do/conduct-elections

If you have broad support from the employee base, “they” can’t block a union certification election. If you’re having trouble forming a union, you’re probably struggling at the “get employees to want your union” step in the process.

[sofixa]

You should let Amazon, Starbucks, Walmart and similar know this. Their union busting tactics are widely documented (including shutting down locations starting to form a union).

[sokoloff]

They do know this. Many of their tactics are specifically directed at “make the employees not want the union”. Some of those tactics are under-handed, even despicable, but it’s safe to say that they know this and act in accordance.

[joxel]

So I’m guessing your head has been in the sand for the last decade while Starbucks and Amazon shut down places that attempt to unionize?

[bluesign]

Normally with union done right, you would have voice in management. Problem is all you see is non-working unions ( union busting etc also from sibling comments)

Thats why I commented union done good from the beginning.

[Ericson2314]

There are coops where a union acts as a VC of sorts. Unions are supposed to take over bussinesses and turn them into Coops. Workplace democracy is always the end goal, decent compensation is just a step along that route and arguably even at times a distraction.

[fimdomeio]

My personal theory (I don't think it is very popular amongst my fellow coops) is that co-ops need well defined hierarchies that have the power to take a lot of decisions and the dutty to report on the decisions taken and the resoning behind it but with that also well defined rules to make sure power changes hands via democratic processes every x amount of years.

[AstralStorm]

Your personal theory has what backing? Care to share why you think hierarchy is necessary?

The only semi-valid reason to have a hierarchy in a cooperative is to optimize voting and reduce meetings. That would be less necessary if your cooperative runs in a more digital way and concerns of various members are known ahead of time.

Otherwise hierarchical cooperatives can be literally corrupted by the hierarchy or sold out, turning them into an almost regular company with board of shareholders.

[onphonenow]

Or check out esops or employee owned companies - they don’t have same egalitarian approach - but often run more like a business

[replygirl]

check out sociocracy

[pessimizer]

There's something to be said for representative democracy. I want to work in something like a cooperative, but I don't want to be constantly engaged in managing it. I'd rather assign my vote to someone who seems like they have their head on straight, and get a monthly email that tells me what's been going on lately.

Maybe like how pure hierarchical capitalists need a fairly large financial industry to handle the movement of wagers and prizes between investors and producers, a flatter system might need a big and active enough group of secretaries/reporters to keep everybody so informed about internal decision-making and events that normal members don't feel like they have to attend meetings.

It's really a privilege of power not to have to explain yourself. A flatter system might have to dedicate a standing portion of its efforts to explaining itself.

[karmakurtisaani]

Does it have to always involve everyone? Why not vote for the CEO or board of directors once every couple of years?

[ankaAr]

I know coops that hire the CEO as An external guy. I saw that in many restaurants owned by their staff.

[rapsey]

Sounds like an awful work environment then.

[throwawaaarrgh]

"Too many meetings" is a problem many companies have. It's an efficiency problem. There are ways to reduce or even eliminate too many meetings.

[Jensson]

> But making fast about turns that you sometimes need to do in a business setting is nigh impossible, which is actually hazardous to everyone in the cooperative. This might even be the primary reason cooperatives (being an old idea) hasn't survived other than as a fringe phenomena.

There are large cooperatives, but only in "solved" industries so there aren't many hard decisions left to make. Programming is not one of those fields yet.

[adwn]

You think that there are no hard business decisions to make in established – i.e., non-software – industries? It's just smooth sailing along predefined routes?

[goodpoint]

That's just your experience. Many coops are run pretty efficiently.

[onphonenow]

Berkeley which was a major area for co-ops have almost none left. My family was part of a co-op. Challenges:

Often very political - seen as a good thing but can add conflict (ie divesting/not stocking/opposing apartheid Israel while some members are Jewish). No x because y etc - repeat for many topics.

Decision making - both hard and strong feelings internally- can lead to claims around “violent” communication, micro aggression, privilege, disrespect etc etc when there are disagreements. Coops will say a good thing, but I think can wear people out sometimes.

Accountability/performance mgmt. not always, but sometimes difficult to take action in this area - maybe a good thing - goal is to work together.

One interesting variant are employee owned businesses that do not run as co-ops. ESOPS etc. I’m not an expert at all, but I think there are a number of really industrial scale businesses that have this structure successfully.

[mihaaly]

I am unsure if fast turns is a thing of hierarchical organizations, especially the successful ones, what I see that the bigger (some say more successful) it is the slower it turns. Period. Also it's will to turn is lower by getting bigger, trying to stick to past success and methods as much as pussible because every change is constly and every change is risky, and the members don't want to risk the livelyhood of their family, rightfully. When have a choice then will rather not turn but go straight when it is big. I admit some big turn very quick, like Elon Musk with Twitter, but thats the other wrong end of the scale, finding the balance is not easy and most of the time unsuccessful except for a short period. And those could be attributed to luck in many many cases too. We remember the success stories not the failures (except the huge ones) and being sentimental with those being successful and gone. Big organizations' success come and go, rare to shine more than several decade and could die easily if the decisions are wrong (or forget to make decisions). How is their decision making is better then if they go away or fall? They grow quick, then comes an other due to the constant need for competition and the old one goes or falls back. The need for quick decisions and neckbraking pace is actually fuelled with quick decisions and neckbraking race of the organizations themselves and call it business setting if that was not their making but some kind of external condition. Also not always (or rarely) turn to a direction that is good for a society and not just for those very few being in the position of making the decision (mostly it is coincidental or side effect then). Also success of a hierarchical organization does not necessarily mean it is making any good for customers and people but just being big enough to force its views and interests on others. That's not really success and good then just a social form of violence.

Decisions are not easy when it affects lots of people and that's why those should be made as carefully as possible in the settings available and we know from social studies, it is proven, that individual decision making is quick, group decision making is accurate, in overall. For the group of people in the long run group decisions was better. As a side effect it was not making life unbearably quick by themselves and may eliminate the need for some of the quick decisions (some, as there are aspects outside of human groups that mandate actions, those cannot be eliminated).

Mostly philosophizing above.

[onphonenow]

Interesting - so in your view Elon as the top person in Twitter hierarchy will not be able to change Twitter except very slowly ?

[AstralStorm]

My view (not OP) is that Elon will break the company and get it to fail.

He does not understand that Twitter is an ad driven business which also means PR is critical or you don't get advertisers.

Most businesses that tried to pivot from ad driven to subscribers have failed. One that tried to do so in so dramatic a way? Never heard of it.

Elon is not doing a simple management style change, he's changing everything with next to zero money. Unlike a startup, a company the size of Twitter cannot compromise what is feeding them without failing quickly. A startup can survive on small VC funding for a pivot, Twitter eats millions of dollars to just operate.

[PedroBatista]

He understands what Twitter is and he and his buddies ( jack for ex. ) want to turn it into something else.

If they’ll succeed that’s a whole different matter. Not only because they were “wrong” but also because “reality” will have a say in that.

You invest all you money building a nuclear reactor in 1929, you’ll be not wrong but the timing was off.

[forty]

Timing being an important part of a strategy, I'd say wrong timing still counts as being wrong.

[onphonenow]

That sounds like large changes? Even if Twitter fails?

[shadowfoxx]

Not saying this is the case but an outlier (exception) to a rule does not disprove the rule.

So you're right, Elon came in and is making changes quite rapidly but that doesn't mean this is standard for large businesses.