business corporate responsibility

Life after the corporation: 10 alternative businesses

The corporation has a lot to answer for, as a business structure. It was conceived with important goals in mind, but it’s become a kind of strategy for avoiding responsibility. Businesses use the legal structures of the corporation to dodge their duties to workers or the environment. Just as importantly, corporations serve as a kind of scapegoat that protects the consumer culture from the consequences of its lifestyle.

Others have written more eloquently about the limits of corporations. My point here is that there are other ways to run a businesss. Being anti-corporation doesn’t mean being anti-business, and demanding fairer, simpler, more transparent business practices doesn’t have to mean government interference either. It’s about how businesses are structured in the first place. Here are ten businesses that don’t run on a corporation model

John Lewis
With 32 department stores and over 200 Waitrose supermarkets around the country, the John Lewis Partnership is one of Britain’s leading retailers. It has been owned by its staff since 1920, when John Spedan Lewis drew up a co-ownership constitution for a what was originally an Oxford Street drapers. All staff are partners, and they vote to appoint a council and directors. Profits are shared, and it’s little wonder that John Lewis is regularly nominated as one of the best companies to work for in the UK.

Gore
Another company ranking highly on those lists is Gore. You may not know it, but you’ll know its most famous product, Gore-tex. The company specialises in new inventions and innovations, and to encourage the sense of initiative required, it is a non-hierarchichal organisation. Staff work in teams, with no chain of command.

London Symphony Orchestra
You’ll have heard the London Symphony Orchestra – it has more recordings to its name than any other orchestra in the world. If nothing else, they played the Star Wars soundtrack. The LSO is one the world’s most respected orchestras, a cultural institution for over a century. It’s owned by the musicians and run as a democracy.

Carl Zeiss
In the nineteenth century, Carl Zeiss and Ernst Abbe pioneered microscopy with the manufacture of high quality lenses. When Zeiss died in 1888, Abbe gave his shares in the company to the staff at the workshop, in memory of his friend. The company has been owned by a foundation every since, with profits going partly to staff and partly to fund research.

Loch Fyne Oysters
British diners may be familiar with the chain of Loch Fyne seafood restaurants. They were recently acquired by the Greene King group, but they were started by Loch Fyne Oysters, their supplier and an employee owned company. Like Zeiss above, the shares were re-distributed to employees at the death of the founder.

United Airlines
In the early nineties, United Airlines ran into financial difficulty. In the course of restructuring, the airline did a deal with employees and their unions. Staff took 55% of the company’s stock in return for a pay cut, and United became the world’s largest employee-owned company. It didn’t work out particularly well in the end, with staff losing their stock options when United was forced into bankruptcy after 9/11. For a while though, it was a remarkable experiment, one in which baggage handlers owned the planes they loaded.

Tribune Company
Another company that illustrates the pit-falls of using employee-ownership to resolve conflicts of interest is the Tribune Company, the Chicago based media conglomerate. In 2007, an entrepreneur named Sam Zell bought out the shareholders of the company, and restructured it to be employee owned. This was largely a ruse to avoid tax, while he sold off assets. The company went bust in 2008, the largest media company failure in US business history.

Mozilla
There’s a good chance you’re reading this post with a little help from Mozilla, if you’re using their Firefox browser. Founded in 1998 as a response to corporate monopoly in software, the project gave birth to Netscape, a good but ultimately doomed web browser that was unable to challenge the dominance of Internet Explorer. Relaunched under the Mozilla Foundation, the open source software now has 20% market share, and remains not-for-profit.

Tower Colliery
In the 1990s, coal mining didn’t make much sense in Britain any more, with cheaper imports displacing the domestic industry. When British Coal decided to close the Tower Colliery in South Wales however, the miners did something rather remarkable. They pooled their redundancy pay to buy the site for themselves, and then re-opened the mine. It was the last operating coal mine in Britain, until it’s reserves were finally exhausted and it closed again in 2008.

Barcelona FC
A bastion of fierce local pride, Barcelona FC is Spain’s most successful football club. It’s owned entirely by supporters, 170,000 of them. It’s a model that may well be adopted more broadly in future, as millionaire businessmen and fans clash over the running of clubs. (In England, AFC Wimbledon runs as a co-operative, and several smaller clubs are owned by supporters. In the US, the Green Bay Packers are notable for being owned by fans.)

Scott Bader
In 1951, Quaker businessman Ernest Bader decided to give his chemicals company to his employees, a gift to be held in perpetuity. He called E F Schumacher to help him, and over the next few years they worked out a constitution for Scott Bader, a process Schumacher documents in his book Good Work. Included in the constitution are rules that say no product can ever be used in armaments, and the highest wage in the company will be no more than seven times larger than the lowest.

9 comments

  1. Sleep Country became an employee owned company in 2010 with the introduction of a new Employee Stock Ownership Plan ESOP . All qualified employees now share in Sleep Countrys growth and prosperity by obtaining shares of the company at no cost to them.

  2. Just found this post today. Excellent one, Mr. Williams. I plan on citing it in my book, Corporate Reckoning Ahead, that I am about finished writing. Best, Gary Brumback, author of The Devil’s Marriage: Break Up the Corpocracy or Leave Democracy in the Lurch;and America’s Oldest Professions: Warring and Spying.

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