Category:Open Company Formats

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Can we invent new corporate formats for P2P and commons-friendly, fair market approaches? What we need, specifically for peer production, is a supportive ecosystem!

Introduction

1. The key emphasis at the P2P Foundation is the following:

  • Can we imagine a shift from extractive business forms, which looks to human beings and nature as resources to maximise profits, and externalize negative externalities to the maximum in order to keep costs down, to generative business models, which looks at how to create sustainable livelihoods for open and contributory productive communities that practice a mode of production that is free, fair, and sustainable at the same time ?

In this section we look at the emergence of various new organisational and legal forms that go into that direction.

But our main interest is the development of ethical entrepreneneurial coalitions which creates livelihoods for commoners, while themselves contributing to the growth of a shared resource basis. The classic corporation, extractive by its very design, is unlikely to be the best vehicle for this so we monitor these new forms here in our section on Post-Corporate forms, see http://p2pfoundation.net/Post-Corporate.

So, what comes after the corporations ? Here are the most likely successors with a p2p/commons bent that we support:


2. More context:

While fair markets are an acceptable mechanism to regulate supply and demand for certain scarce goods, unregulated capitalism has become an infinite-growth, scarcity engineering mechanism, which is incompatible with the long-term survival of humanity and the biosphere. More specifically, profit-maximising companies are engineered to ignore natural and social externalities, are legally obligated to maximally enrich their shareholders, and can only be regulated from the outside. When this outside is weak, the dominant corporate form lacks self-regulating mechanisms to respect natural limits and social justice.

However, open design and production communities have no compulsion to create artificial scarcity, and entrepreneurial coalitions that align themselves to such commons will have more sustainable practices. This sustainable practice can be strengthened even more through the choice of legal and institutional formats that regulate corporate entities 'from the inside', by creating a social and natural context for eventual profit making (and not 'profit-maximising'). Ideally, peer producers and contributors to commons of knowledge, software, and design could create their own ethical structures and network each other in ecologies of solidarity around the commons from which they derive their value.

So, at the core we have shared innovation commons, and the for-benefit associations which maintain them. These commons are surrounded by an entrepreneurial coalition of ethical companies, who use relocalized, open, and distributed manufacturing; but are organized in global material networks that are specifically designed to sustain their commons, i.e. Phyles.


Resources

Watch the following video as introduction of what is now possible: Douglas Rushkoff on How Digital Media Finally Enables Distributed Enterprise

  • The Corporation as Commons: Rethinking Property Rights, Governance and Sustainability in the Business Enterprise. By Simon Deakin.

[1]


Three Ways to Structure Contemporary Business

Daniel Tenner (summarizing Aaron Dignan ):

"Overview of three modern ways to structure a business, namely:

  • Holacracy (Medium, Zappos): "authority should be distributed, everyone should be able to sense and process (solve) the tensions (ideas/problems) they perceive, roles and employees are not one-to-one, and that the organization can and should evolve toward its “requisite structure” (the ultimate structure for its current environment)"
  • Agile squads (Spotify): "Instead of an engineering department, a design department, and a marketing department that each collaborate on products with dubious ownership, they organize vertically around products (or more specifically pieces of products) and traditional disciplines are loosely held horizontally."
  • Self-organising (Valve, Github): "Unlike the examples above, they accomplish this by essentially having no structure. Employees are encouraged to work on whatever they want — to find the projects that engage them and do the best work of their lives."

(http://swombat.com/2013/12/23/three-modern-organisational-structures)

What we like

  • The concept of Phyles, global, mission-oriented, community-supportive market entities


Indy Johar on the Open Venture Movement

"Our hypothesis

1. Venturing + Activism = one of the best instruments democratic instruments for changing the world

2. Open is both; Open as in radically transparent + Open as in (Openly Shareable + Openly Editable + Openly re-shareable) = a systemic pathway to a radically democratic economy

3. We believe Open is going from the Open web to the the Open Everyday

4. We have built a £4m framework accelerator to seed this Open everyday economy..

5. This will be a learning journey for us, the startups,..."


Characteristics of Generative Ownership Forms

from http://www.marjoriekelly.com/wp-content/uploads/2012/05/Kelly-OOF-PR-Final.pdf (visited 2016-12)

THE DESIGN OF ECONOMIC POWER — The Architecture of Ownership

EXTRACTIVE OWNERSHIP GENERATIVE OWNERSHIP
1. Financial Purpose: maximizing profits in the short term 1. Living Purpose: creating the conditions for life over the long term
2. Absentee Membership: ownership disconnected from the life of the enterprise 2. Rooted Membership: ownership in human hands
3. Governance by Markets: control by capital markets on autopilot 3. Mission-Controlled Governance: control by those dedicated to social mission
4. Casino Finance: capital as master 4. Stakeholder Finance: capital as friend
5. Commodity Networks: trading focused solely on price and profits 5. Ethical Networks: collective support for ecological and social norms



Typology

Marjorie Kelly's Typology of Generative Ownership Forms

Marjorie Kelly on THE FAMILY OF GENERATIVE OWNERSHIP DESIGN:

Commons and government ownership:

Assets like the ocean, a forest, land, a park, or a municipal power plant are held or governed indivisibly by a community. This category includes, but is not limited to, government ownership.


Stakeholder ownership:

Ownership by people with a human stake in a private enterprise – including cooperatives, partnerships, credit unions, mutual insurance companies, employee-owned firms, and family-owned companies – where the central purpose is a life-serving one.


Nonprofit and social enterprise ownership:

Organizations with a primary social or environmental mission, which rely either on charity (nonprofits) or use business methods (social enterprise). This category, which includes hospitals, universities and non-governmental organizations, embraces nonprofits, subsidiaries of nonprofits, and certain private businesses.


Mission-controlled corporations:

Corporations with a strong social purpose that are owned in conventional ways (often with publicly traded shares), yet keep governing control in mission-oriented hands. These can include family-controlled firms, and the large foundation-controlled companies common across northern Europe." (http://www.gtinitiative.org/documents/IssuePerspectives/GTI-Perspectives-Architecture_of_Enterprise.pdf)


Albert Wenger's Typology of Ownership Forms

* Cooperatives.

These have played an important role in the creation of utilities of various kinds from grocery distribution to telephone networks. Generally the members contribute capital to build some piece of shared infrastructure.


* Mutuals.

Insurance is inherently a network effects business and many insurance companies started out as mutuals. These are similar to co-operatives and may have membership fees but tend not to require an initial contribution of capital.


* Steward-Ownership.

Companies can own themselves in whole or in part via a trust, club or foundation. This is an ownership structure that has been quite common historically in Europe. The role of the owning foundation tends to be to uphold the longterm purpose.


* Decentralized.

With the invention of Blockchain Technology we may be able to unlock entirely new ownership structures, where there is no need for a central corporation at all and the network is directly owned by its participants."

(http://purpose-economy.org/wp-content/uploads/2017/07/Purpose_Steward_Ownership_Rethinking_Ownership-in-the-21st-Century.pdf)

Citations

Chris Carlsoon:

"Corporations ARE the problem as the common institutional form of late capitalism, the social system that is the real root of poverty and inequality. Corporations are (temporarily) immortal, often unaccountable to national laws, brazenly criminal, murderous, and have only one purpose: to accumulate capital. They are not, and cannot be, moral actors in society. Even if the most pious, ascetic monks were put in charge of large corporations, the fiduciary responsibility of corporate leaders is to ensure the growth of profits and wealth for the stockholders or private owners. Corporations are not formed to do anything useful or beneficial to humans (except as an accidental byproduct), nor other species, nor the planet as a whole, unless (and only if) the activity produces profits. Corporate leaders can be personally very greedy or completely indifferent to personal wealth. It does not matter. If they don’t show steadily increasing “growth” (accumulating capital) they will be replaced by the next interchangeable “captain of industry.” (http://www.nowtopians.com/work-and-the-economy/%E2%80%9Ccorporate-greed%E2%80%9D-is-not-the-problem)


Poor Richard:

The problems described above by Chris Carlson apply to most publicly-held for-profit corporations and many privately held ones, although the legal obligations to shareholders are much less strictly regulated in the latter case. In the case of not-for-profit corporations, if they receive tax-exempt status they are generally restricted to donations and grants for their funding. The regulations on tax-exempt non-profits are in part intended to prevent them from engaging in competition with for-profit businesses. They must remain dependent on charitable and philanthropic support. On the other hand, a cooperative may generate its own revenues in the same fashion as a for-profit corporation. It may distribute net revenues to its members, rebate them to customers, and/or retain them for expansion or other purposes. Certain kinds of non-profit cooperatives may qualify for tax exemptions, but as long as a cooperative does not book a profit it pays no income tax whether it has a specific exemption or not. Property tax treatments may vary. In the US there are several other corporate and cooperative forms, each with its own regulations and tax treatment. These include Limited Liability Companies (LLC), Subchapter S Corporations (S-Corp), Farmer Cooperatives, Electric Cooperatives, Credit Unions, and others. The most recent form in the US is the For-Benefit Corporation which is essentially a hybrid of the public, for-profit corp and the not-for-profit corp. Choosing the most appropriate form for any given purpose can be a complex task.


Making Corruption Impossible by Design (Transparency)

"Creating an association should be as easy as creating a Facebook Group. For most cases, we shouldn’t have to worry about creating and maintaining a legal entity. Yet those associations should be able to collect money and disperse it for their activities. Instead of creating these associations using a 20th century framework* that assumes that the money collected goes into a blackbox and therefore requires reporting to avoid abuse, what if we could create new associations on a more open and transparent model, where the collected money wouldn’t go into a blackbox, where we wouldn’t need to file annual reports with consolidated numbers, and where corruption would be impossible by design?"

- Xavier Damman [2]


Citizens United in Cooperative and Participative Entrepreneurship

"Citizens unite to compete with multinationals: this is the entrepreneurship of the future; the entrepreneurship based on cooperation and participation as the key to develop large human organizations able to recover local production and to reactivate the economy. The cooperative and participative organizations apply an innovative approach to grow in a massive way: the members of the organization participate very actively in the co-creation, management and development of the cooperative. In cooperative and participative organizations the clients are the owners of the organization. They do not ask for money to banks or investors, they self-finance. They are non-lucrative structures with an aim of changing the current model by adding as many members as possible. Some success cases are Park Slope Food Coop in Brooklyn or Som Energia in Spain."

- Enladiana [3]

Visualisations

  • Solidarity Economy visualisation


Key Resources

Key Articles

  • The Corporation as Commons: Rethinking Property Rights, Governance and Sustainability in the Business Enterprise. By Simon Deakin.

[4]

Key Books

  • Boyd Cohen. Post-Capitalist Entrepreneurship: Entrepreneurship for the 99%. Taylor & Francis, 2017

[5]

  • The Shareholder Value Myth. Lynn Stout. "there’s also no solid evidence that shareholder power produces better results. In fact, there is some evidence that the more power we give shareholders the worse results we get." [6]

Related Sections

Pages in category "Open Company Formats"

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