Learning from alternative models
The good thing is that there are already many good alternative models to learn from and build upon. Largely unnoticed, numerous companies from the German Mittelstand (basically the SME sector) have survived and thrived for more than 100 years. And by achieving market leadership, they have created value and generated jobs around the world.
When it comes to solidarity and mutual support, co-operatives also boast a unique track record. Today more than 1 billion people are part of co-operatives, and the livelihoods of almost half of the world’s population are supported by such enterprises, according to the International Co-operative Alliance.
These organisations - including the Raiffeisen Banks and the Bank- Genossenschaften in Germany, Austria, Switzerland and the Netherlands - have not only made a mark with their contributions to the community, they have also proven an ability to withstand crises in competitive markets better than many of their traditional capitalist counterparts. These largely unnoticed organisations deserve special consideration during 2012, a year that the United Nations has designated as the International Year of Co-operatives. Are there not lessons to be learnt from the success of this model for Capitalism 2.0 and Management 2.0? For-profit businesses have developed alternative models, as well. There are, for example, more than 11,000 companies in America that are owned entirely or in significant part by their employees, some 13.6 million of them in total. WL Gore, maker of Gore-Tex fabric and many other products, is a leading example. The company has some 9,000 employee- owners at 45 locations worldwide and generates annual sales of $2.5 billion. Graybar, a Fortune 500 company, also has a long history of being fully employee- owned. Originally established in 1925 as part of Western Electric, it was purchased by the employees in 1929 for $9 million.
86 Management Today | June 2012
Today the $5 billion company is one of North America’s largest employee-owned concerns, with 250 distribution centres throughout America, Canada, Mexico and Puerto Rico.
Partnerships also provide interesting clues about how to move forward. Mazars, which grew from a 50-person company after the Second World War into a 13,000-employee global organisation, is an example of how value can be created using fundamentally different governance and management models based on democratic and co-operative principles. Even though hierarchy is an inherent element at most companies, self-managed organisations offer yet another structure to consider. Gary Hamel, for example, has written about Morning Star, a California- based tomato processing company with revenues of $700 million and more than 400 employees. What makes the company so remarkable is that it has no bosses, titles or promotions. While the Morning Star model may not be universally applicable, it contains seeds that can be widely applied, especially when it comes to building a trust-based organisation with a truly empowered workforce. Citizen Sector Organisations (CSOs), which include nonprofits and non- governmental organisations, also have much to teach the capitalist world. Drucker had a significant influence on the development of this sector with his book Managing the Nonprofit Organization. Since the 1980s, the Citizen Sector has created jobs about three times as fast as other employers in the OECD. In Brazil, the number of CSOs has risen from about 36 000 to nearly 1 million over the past 20 years. Today, millions of these groups across the globe attract talented individuals who long for challenging and fulfilling work that is consistent with their personal values and goals. New hybr id value chains between CSOs and for- prof i t enterprises show that there are unconventional routes to address the immense social issues of today’s world.
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