The relationships that exist within businesses are universal and fundamental to everyday life. These relationships are shared between employers, employees, consumers, and neighbors, and all actors in this system are affected by each other’s actions. However, the decision-making within the average business is left to a small group of people often acting in their own interests. Some, noticing this effect, have advocated alternative ways of organizing a business.
Traditional businesses vary in their organization, but they remain fundamentally the same. The owner or board of directors acting on behalf of the investors make decisions about everything the business does. Employees carryout the work to ensure employees meet expectations, and managers and supervisors are hired by the owners to oversee operations.
While this type of system can create productive industry, most of the benefits are seen by the owners. A report released by the Economic Policy Institute illustrates this with a finding that of the top 350 firms in the United States, the average CEO’s income in 2020 was 351 times that of the average worker. It’s safe to say that there are benefits to writing the rule book.
Decisions made by a business owner impact the livelihood of workers. They impact the availability of quality services and costs incurred by consumers. Also, they can impact the environment and broader economy of a community.
Since an individual or board acting in their own interests has the authority to impose conditions on those around them without consent, some have pointed out a contradiction in American culture. While we embrace our representative democracy in government, many decisions with societal implications are still made without the approval of a majority of those involved.
Knowing that the decisions made by a business can affect everyone around it, yet the decisions made by a business are in the interests of a small minority, some have suggested an alternative. In this alternative system, ownership would be dispersed among all of those involved in the business and decisions would be made through democratic processes. The rules would be written together and those put in place to lead would be accountable to the many rather than the few. This system may seem fantastical, but it has already been realized and it’s called a cooperative system or a co-op.
While co-ops are not as common as the traditional business structure, cooperatives are more common than might be imagined. The International Cooperative Alliance reports that there are over 3 million cooperative businesses globally. Among them are all types of businesses including, but not limited to, grocery stores. An example of a grocery store run as a co-op can be found in Urbana Illinois’ Lincoln Square mall and is named Common Ground Food Co-op.
Common Ground has been a growing project of the Champaign-Urbana area since 1974. It was started as a part of a national food equity movement and has successfully continued this communal project for over 35 years. Although the project had no physical location for distribution in its early years, it began developing through direct deliveries and meetings in church parking lots. Since then, it has moved into an established location in downtown Urbana.
As a co-op, this business’s ownership is widely dispersed and as such, leadership is decided much differently than most businesses. Anyone can become an owner of the store by paying a $60 membership fee. In doing this, along with earning benefits within the store, you become part of the community and are entitled to have your interests represented in leadership. The board of directors for this business are elected for 3-year terms by members of the community. This means that the leadership of this business, rather than being focused on advancing the profits of a small minority, is acting in the interests of the employees, customers, and community members who make up the majority of the business.
One benefit of the co-op method is that profit is more likely to be reinvested than cashed out. With room for reinvestment, the quality of experience for the majority can be prioritized. Liz Sands, Outreach Coordinator of Common Ground, explained
“Because we are collectively owned by over 9,000 owners, any profit goes directly back into the store, the employees, or the community.”
Further she described how this reinvestment directly impacts the consumer, worker, and community experience. Without the need for profits to flow to the top the store has been able to invest in their location, increase wages and benefits, and be actively involved in charitable work.
Common Ground is an example of how industry could organize itself if society wanted to. Together customers, employees, and community members own, operate, and benefit from this business. To learn more about co-ops and Common Ground visit their website at www.commonground.coop.
Top photo from Common Ground’s Facebook page.
