Open Enterprise
Overview
This page was written by Matthew Cooperrider. It 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).
Characteristics
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 be able to interact directly with other organizations qua organization. The defining characteristics of an open enterprise emerge from the reconciliation of open organization values with the regulatory apparatus of the state. An enterprise that is truly and radically open will have its commitment to openness encoded in its bylaws. The belief is that, if such an enterprise is well-designed and continually refined by its members, then successful open business practices will naturally follow.
Here are some characteristics that are conventionally attributed to open organizations
- transparent, with clearly defined processes
- democratic or member driven or consensus driven
- flat or non-hierarchical
- loosely coupled
- integrated: a higher degree of involvement of employees and consumers
The discussions of these characteristics on the Open Business and Open Organization pages shows how they can produce 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."
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.
- Comprehensive Cooperative Township: Works on a model in which each member is given one vote, regardless of capital contribution. There is only one member class.
- 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.