Open Enterprise

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Definition

Michel Bauwens:

An open enterprise is:

- based on a commons of knowledge, software and design, to whom everybody can participate given certain rules pertaining to quality etc ..

- is managed collective and transparently by all those who contribute, augmented with a role for those who are affected by its activities; it is based on open book accounting

- does not restrict access to the commons on which it is based, but it sells any scarce goods and services it may produce at a fair price; the revenue is used both for its contributors and the maintainance of the wider commons on which it depends

- as regarding its material infrastructure of production, it based on the shared ownership of its owners, eventually augmented and combined with other stakeholders

- the enterprise is mission-oriented around its commons, and uses profit only in accordance with its mission

- it takes account of all positive exernalities through revenue or benefit sharing, and of negative externalities

- it acts in solidarity with the wider world, not just for its own members


2. by Tiberius Brastaviceanu:

"An open enterprise is open to participation, which means that anyone can add value. Moreover, it is decentralized in terms of allocation of resources and uses a horizontal governance system. An Open Value Network operates on the Long Tail Mode of Production, which means that a very large number of individuals are responsible of value creation, only a very small percentage of those create maximum value, the great majority of them create very little value, and most of the value is created by those who contribute very little. A prearrangement on revenue is impossible in this context. First, because the process of value creation is very dynamic and relations of production cannot be contract-based. Second, the process involves a great number of individuals that are distributed all over the planet, therefore it is impossible to do time management. There is no instituted power structure, therefore no one can force anyone else to work more. In this case, an algorithm is needed to turn contributions into equity, as contributions are added to the project." (http://multitudeproject.blogspot.ca/2014/01/why-do-we-need-value-accounting-system.html)

Discussion/Exploration

Overview

This page is a preliminary investigation into the nature of open enterprise. It is a part of the Governance for Open Enterprise project. The word enterprise is used because it encompasses both for-profit and nonprofit organizations. Furthermore, the use of the word enterprise is meant to foreground a concern with the official legal status and operating agreement of the organization (thereby placing specific revenue-generating models in the background).

Preliminary Definition

An open enterprise maximizes the involvement of every individual who is in any way affected by its actions. It incorporates the means necessary for increased involvement into its organizational structure, and actively seeks to minimize means of exclusion.

Distinction from Open Organization

An open enterprise is a species of Open Organization. It is specifically an open organization that takes on an official legal status in order to take advantage of the benefits that such a status confers. The defining characteristics of an open enterprise emerge from the reconciliation of open organization values with the regulatory apparatus of the state.

Characterization

There are three qualities that an enterprise must have to maximize the involvement of its constituent network: transparency, inclusiveness, and comprehensiveness.

  • Transparency requires the disciplined documentation and proactive sharing of decisions and processes. This begins the conversation with constituents, and allows them to build trust in the integrity of the enterprise.
  • Inclusiveness requires the creation of conditions that maximize constituent involvement in decision-making and process execution. This gives constituents a sense of ownership of, and loyalty to, the enterprise.
  • Comprehensiveness requires that the enterprise mission be formulated with respect to constituents' various personal missions, so that it can as much as possible avoid interfering with them (or, better yet, can support them). This reduces constituents' cognitive dissonance and increases buy-in.

The Open Business and Open Organization pages shows how openness can lead to both a competitive business and a desirable situation for employees and customers. Many existing businesses have begun to work these characteristics into their structure. The goal of the current page is to discover a model by which an enterprise can radically incorporate these characteristics in order to maximize both sustainability and satisfaction of employees and customers.

Radical Distribution of Ownership and Control vs. Circumscribed Openness

Many business-oriented social networks are experimenting with distributing revenue shares to members based entirely on their participation within the social network. They know that the value of their network depends on the quantity and quality of the information found within it, as well as on recruiting and retaining a talented pool of members.

Here are two examples of this approach:

  • Project Stars: A job-search and resource-sharing social network that rewards members with points for producing content or projects that receive votes or approval from other members. The members with the most points at the end of each three month cycle are then rewarded with a share of company stock.
  • Cambrian House: Entrepreneurs share, rate, and workshop startup ideas. Members obtain points for activity on the site, which automatyically translate into shares in a cooperative, which is a subsidiary of the corporation."

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As much these businesses create an arena for open exchange and revenue sharing between members, that arena is still administered by a class of owners who control the core of the enterprise.

A truly open enterprise, on the other hand, subjects core aspects of the enterprise to the democratic will of its members.

  • Networked Micro Agencies: An open enterprise might act as an organizational platform or shell corporation for a network of micro-agencies.

In an open enterprise, there is a constant tension between the members' need for the benefits of the larger organization, and their desire to maintain their independence in the face of the needs of the larger organization.

More Information

Our entries:

  1. Open Organization
  2. Open Business
  3. Open Enterprise Governance Model