The Open Source Business?

Ted wonders: "Being an advocate of the open source software movement for some time, I'm wondering how and if the principles of open source software could be applied to a new type of open source business. In a world where people slave away for the sole profit of a board of directors and merciless shareholders, is there room for a new type of organization that throws away the archaic and monolithic organizational structure of today and from there form a company that has its direction dictated by all of the members that run it. An organization where everyone has an equal say in what goes on. There isn't any limit on how many people can be involved (the more the better, in fact) as long as they can be useful. Could this be the way of the future?"

Comments

hm.

[GregoryD]

Sounds like communism... heh heh heh.

Re:hm.

[surfbass]

I was just wondering if he was reading the Manifesto...

Re:hm.

[Ruff_ilb]

Or, perhaps, the Federalist papers...

Remember everyone, when everyone takes an equal part in something, it can be Democracy just as much as it can be communism.

In fact, communism (in theory) makes everyone equal, wheras democracy gives everyone an equal say.

This seems much more like democratic business, to me. The communism equivalent would probably be something like paying people less and less depending on how wealthy they are...

Re:hm.

[TheWanderingHermit]

It's also the way some well respecte groups operate. It's the way the Religous Society of Friends, or Quakers, has been handling their business and making their decisions for close to 400 years and it's worked for them. Granted they aren't a business, but it shows an organization can survive with such an attitude.

Re:hm.

[Bing Tsher E]

When everybody is free to take an equal part in something, it can be Democracy.

When everybody is forced to take an equal part in something, it can be slavery, Marxism-Leninism, Communism, etc.

Re:hm.

[humble.fool]

Sounds more like labor-oriented anarchy.

Re:hm.

[Anonymous Coward]

I should remind you that our own economy is a form of feudal slavery, unless one already has a good deal of money. When money runs everything, and it isn't distributed equally, people end up without things - often enough things that they need - if they don't aquire enough via subservience to some source of money, analagous to a peasant serving a feudal lord. Effectively, they're enslaved by their need of adequate food, shelter, and clothing. Even then, they're not guaranteed to get much more than the bare minimum needed to survive. An enormous fraction of our citizens live in poverty or near-poverty, despite being good workers.

Re:hm.

[Millenniumman]

People can get more money. The peasant is stuck in his position. The "uplifted communist worker" is stuck in his position.

An enormous fraction of our citizens live in poverty or near-poverty, despite being good workers.

Can you back that up?

Re:hm.

[werewolf1031]

A vital difference is that in our present economy, you have the right to terminate your own employment and seek employment with a different "feudal lord". Granted, that may not be easy or practical, depending on your specific situation, but you do have that freedom. Nobody is forcing you to work for a specific employer, and that is a huge difference from "feudal slavery". Not happy with your current job? Seek employment elsewhere. It's not always easy, but it's very rarely impossible, at least here in the U.S.

Re:hm.

[cp.tar]

The "uplifted communist worker" is stuck in his position.

Maybe, but by choice.

It's a great example of Peter's Principle, really: workers themselves would promote the incompetent so that they wouldn't interfere with the real work.

Of course, the system has a few... glitches, which in turn ruin such systems.

Re:hm.

[Skythe]

I've always thought that given the nerdiness ^H^H^H^H^H^H^H linux expertise within slashdot that some people could band together to form their own little linux venture. Given the expense of windows' and other closed source software i think you could make a hell of an impression demoing linux for a corporation and showing them just how much they could save not having to renew their liscence or upgrading to vista. Once they've migrated to linux, this said hypothetical company could provide support thereafter = 2) ??? 3) Profit!

Re:hm.

[Lars.O.G.]

No, communism is usually based on a centralized model (with few exceptions, in Jugoslavia something descentralized had been tried afaik, but at the times communication was a problem, long before internet ;-). Of course, if you translate communism to public property, which it is in some meaning, then you are right. I think the ideas is also not at all about some kind of anarchic structure with endless discussions. It is about keeping decisions closer to where they are going to be executed. So the argument that big groups mean slow decisions does not have to be true, as well as the argument that people would start to take discussions on fields they have no expert knowledge. An intelligent structure, something like a framework of groups, where one group shares work and decisions, could even be hierachical as there would have to be groups which take the results of others and assemble. In such a configuration, decisions could actually be much more precise and quick, as the delay of relaying information and decision through the hierarchy would be less limiting. That is the basic about how open source works - we call the groups usually projects. If an application needs gtk to implement the gui, libc for standard calls, and a mathematic library to calculate, they won't start to take over the decision taking in all these projects. So the pretty thing about open source is that, while others build up on it, the project is still "owned" by those developing it. The access to decision taking is usually simply controlled by how much someone contributes. So, in other words, if the marketing folks try to tell the engineer how to design a routine, they would not have much effect as they cannot contribute. The question is if such a corporation would not be more like a network of small companies than one big one. Lars.

Re:hm.

[rohan972]

The "uplifted communist worker" is stuck in his position.

Maybe, but by choice.

You don't seem to be familiar with communism. And spare us the stories of how the abusive communist regimes aren't real communism, tell it to the chinese peasants.

Re:hm.

[McGiraf]

"You don't seem to be familiar with communism. And spare us the stories of how the abusive communist regimes aren't real communism, tell it to the chinese peasants."

China is as communists as the USA is capitalist, not much. Communism an capitalism are ideologies , in the real world those in power just care about keeping the power they have, they are pragmatist. They use words like communism and capatalism in their propangada to keep the poors, the starving the peasents, the working people divided. This way a very small percentage of the world population is controling the fate of the majority and reaping the reward of their work. Not much has changed since the day of peasentry, it's just that in some part of the world peasents (working people) are a bit more comfortable. This is only because information started to move more freely and the people could unite more effectively, so the "elite" had to make some concessions to prevent and all out world wide revolution (almost happened just after WWII in Europe). So now they (the "elite") are working harder at controling information and spreading their propaganda. Thing have improved a bit but we are very far from being free and equals (even in the holy United Sates of freedom police,of the saviors the world, of the land of equal opportuniy of America).

Re:hm.

[Anonymous Coward]

Nobody is forcing you to work for a specific employer, and that is a huge difference from "feudal slavery".

so who does the tax to go?

Re:hm.

[Millenniumman]

By choice? So if a communist worker wants to start a business so he can buy a nice house and car, the community won't have a problem?

Re:hm.

[cp.tar]

You don't seem to be familiar with communism.

Apart from living in a former "communist" country, with my parents' and grandparents' generations telling me how things worked in those days, no, I am not very familiar with communism.

You, OTOH, can't seem to grasp that industry was different in those days, as well as the term "job security", which is very important to the mediocre.
Check the Gauss' bell-curve; most people do fall into that category.

Re:hm.

[rohan972]

I'm not sure how you think you have discerned my understanding of industry by my post. However, your assertion that workers under communism are in the positions they are by choice flies in the face of everything I've ever heard or read about communism.

I note that you live in a former communist country. Funny how that really doesn't seem to fit with Marx's view of the inevitability of communism. As far as I am aware, every communist regime so far has required to keep people from escaping. Doesn't say much for your position that they were there by choice.

Re:hm.

[rohan972]

China is as communists as the USA is capitalist, not much.

Didn't I say spare me that? Oh well. The most obvious reason that China has discarded communism (though not totalitarianism) is because communism wasn't working. That however, is not at all the point I was making.

My point is that communism has never been demonstrated (yes, demonstrated not theorised) to give the workers more freedom. Although workers were oppressed by the capitalists, everything I've read about communism as history rather than theory has shown the workers to be poorer with less freedom under communism.

Re:hm.

[McGiraf]

"The most obvious reason that China has discarded communism (though not totalitarianism) is because communism wasn't working."

China has never been Communist. Yes it's a totalitarist state, that's the part that does not work in the long run.

Re:hm.

[rohan972]

China has never been Communist.

Violent revolution of the working class against the capitalists: check
Abolition of private property: check
Attempted destruction of traditional concepts of marriage, family and religion: check
etc, etc.

Or perhaps you see communism as a great big hippy free love community, all singing happily together. You're right, that's never happened. There is communism the fantasy and communism the reality. You are quite correct, communism the fantasy has never happened anywhere. Any time people try to implement it, you get communism the reality. What happened in USSR and China is what communism the reality is. Deal with it, much as you would like communism to be wonderful, there is no indication that it ever has been, will be or could be. Communists have always implemented a totalitarian regime.

Re:hm.

[McGiraf]

Forget it ...

Re:hm.

[SilverPDA]

In the 60's we called them communes. The free love was great but the rest is rather foggy.

Re:hm.

[cp.tar]

As it goes, you have read into my words things I haven't said. Read my original post again.

Communism as such never existed in practice; hence the quotation marks in my second post.

Since it never existed in practice, Marx's views on communism are currently irrelevant (although I have noticed that many educated Americans hold certain personal views very akin to communism, which does remind me of Marx's claim that communism will originate in developed countries). What I'm commenting on is what would roughly be translated to English as "workers' self-management", which was the basis of all businesses in my country. One of our few still-successful companies (for the war - or, to be more precise, people who benefited from the war ruined most of our economy) is still holding on to that model; the only difference is that now they own stocks as well.
And in that system, workers were mostly satisfied with their jobs; they had 8 working hours per day, job security, a decent health care system... we were poor then, but in many respects we are poorer now. And it is no wonder many people regret the onslaught of capitalism where many workers have virtually no rights at all, with working hours so severe some people hardly ever see their families... we are becoming more like you, working all day long to earn money you'll never enjoy spending...

You don't have to point out the deficiencies in that system (which was socialist, not communist, by the way); there were many and they'd made our economy uncompetitive. But the average person doesn't want to care about the big picture. The average worker doesn't want to learn more and move on... they just want to work their shift, and go home to their families. And they wanted - at the time - to work with as few disturbances as possible. So they pushed the incompetent workers, who got in the way, to management, and then to politics. Which is how we got our politicians. And what is your excuse?

Re:hm.

[rohan972]

So, according to you:

1) Workers under communism are there by choice.

2) Communism as such never existed in practice.

If you take into account my views of communism in theory/fantasy vs communism in reality (expressed here), I can wholeheartedly agree with you.

Re:hm.

[cp.tar]

Since you obviously refuse to read what I wrote and instead you read what you want me to have written, I doubt I could ever agree with you.

You may twist my words all you like; I'm done explaining. No use talking to someone who won't listen.

Re:hm.

[cbecker333]

Way to assume that the small handful of attempted implementations of communism were THE ULTIMATE FOREVER TEST of whether any implementation will ever work. "it doesn't work when those 2 other people do it, so it ain't worth trying a third time" is that what you're saying? The Wright brothers - and pretty much every other great inventor and revolutionary in all of history - wouldn't have done much for us if they had adopted your attitude, jackass.

Re:hm.

[rohan972]

Failed inventors don't generally kill millions of people in the process. By the way, the killing of people is the foundation of the communist state, at least according to Marx. It's not incidental, it was always the way it was to be implemented from the beginning. Try reading the communist manifesto before replying if you want to argue about it. The fact that you don't arrive at happy group hug love utopia by the route of mass murder is not surprising to most people.

How will we get paradise on earth? I know, let's kill lot's of people! How many times does this have to be tried before people realise it doesn't work? It's never worked for any philosophy/religion, and the fact that it is built in to communism guarantees that communism will never work.

Re:hm.

[Bing Tsher E]

Nice and comfy in that armchair, eh?

hahahahaha - im going to get involved then fork it

[LiquidCoooled]

ftsalespitch:

How Will it be Funded:

Initially the company will be funded by a monthly subscription by those who sign up. I'm thinking in the are of maybe 25 a month(in the region of $30)

Good luck with that

[nelsonal]

Open source works mostly because the distribution costs are very low relative to the initial costs of creating software. Very few other industries work that way (power generation and distribution are one).

Re:Good luck with that

[Jedi Alec]

Very few other industries work that way (power generation and distribution are one).

is that why the the amount i pay to have a kWh delivered to my house is almost as much as the amount i pay for the actual power? those 150 kV poles didn't grow by themselves you know :)

Re:Good luck with that

[Anonymous Coward]

the book "Post Corporate World" has some interesting things to say on this topic.

Re:Good luck with that

[nelsonal]

Yep, the cost was in putting up the poles (the cost to deliver power down them once constructed is minimal). I've always paid more for distribution than the cost of the actual power. (Power's usually 2c of my usually 6-11 bills).

There might be some possibilities in Cuba ...

[Anonymous Coward]

you pinko trader !

Leadership by committee? Doubtful.

[XorNand]

One of my network support customers is a tiny township of a few square miles, it's about the smallest form of government in modern-day America. Almost every single decision has to be approved by their board of trustees of about six-seven people. It takes absolutely *forever* to get anything done and is frustrating beyond belief. Yes, it's even worse than corporate America. I can't possibly imagine to run even a small company like that and still remain competitive.

Re:Leadership by committee? Doubtful.

[Ruff_ilb]

Ah, but a leadership by committee approach is quite different than a strict vote-based or thumbsup/thumbsdown approach. Wheras a committee has to argue about everything to no end, a simple vote or approval poll is just that, and can be conducted quite quickly, especially in a company.

Of course, the big downsides of democracy (uniformed voters, mostly) obviously wouldn't exist in a company, where (presumably) every employee is intelligent, educated about the company, and has a personal and very material stake in the company.

Re:Leadership by committee? Doubtful.

[Short Circuit]

Uniformed voters? Like in Starship Troopers? (the book, that is.)

Re:Leadership by committee? Doubtful.

[einhverfr]

I am actually looking at building a business out of an open source model. Leadership by committee is not an issue-- you don't organize buisnesses that way. What you do is empower employees to help the business out. THis means less command and control and a more decentralized work model.

Re:Leadership by committee? Doubtful.

[CodeBuster]

Remember! SERVICE GUARANTEES CITIZENSHIP! Would you like to know more?

Re:Leadership by committee? Doubtful.

[Short Circuit]

We've got that going. Make sure you've got more than just yourself to pick up the slack when deadlines loom.

Re:Leadership by committee? Doubtful.

[shmlco]

"...where (presumably) every employee is intelligent, educated about the company, and has a personal and very material stake in the company."

Anyone remember the story of the kids who found a cat and when asked the sex, immediately voted that he was male and his name was Johnny? Two weeks later "Johnny" had kittens.

Unfortunately, too many people think they have a equal and valid opinion on any subject. Even when there are in fact educated in a given field, they think that makes them an "expert" in other, non-related fields. Do I really want, for example, a technology company in which the janitors have an equal vote with the engineers? No disrespect, but in all likelyhood if the janitors were intelligent and educated... they wouldn't be janitors.

Look at all of the companies where the workers voted themselves higher and higher wages and more benefits... and then went bankrupt or out of business because they were no longer competitive. Heck, most people can't even run a lemonade stand successfully, much less a large organization.

Now, I do think companies, CEOs, and boards need a higher level of accountability. But IMHO, counting runny noses is probably one of the worst ways possible to run a company. Heck, more than six people can't even decide where to have lunch.

Re:Leadership by committee? Doubtful.

[ignavus]

(begin sarcasm)
Yeah, I mean America would never work if everyone had a vote for the legislature and for the national president.

Only the rich people, who own a share of the country, can really run the country. And the richest should get even more votes than the others.
(end sarcasm)

Um ... how is it that huge nations (and India is much bigger than the US) can be run democratically, but a firm with only a fraction of the size of the nation's population on its workforce could not run democratically?

Why not just change the corporate law: instead of stockholders voting for the board of directors, let the workforce vote for the board of directors, one person one vote?

At the moment, democratic governments are faced with a plethora of non-democratic institutions (business corporations) with enormous powers. The corporations are governed the same way that America (and England, etc) were governed long ago: those with property had a vote (and those with the most property, the aristocrats, were represented in person in the English Parliament); those without property had no vote. This system is called plutocracy - rule by the wealthy. We got rid of it in politics ... but now it is time to get rid of it in the economic world. America campaigned against decisions (like taxation) being made without the Americans being represented in the decision-making body. Why should employees - the owners of human capital - take second place to those who only invest financial capital in the business? The "human capitalist" (the employee) has more at stake in the business - usually their whole human capital is invested in the one business - it is hard to work in more than two or three businesses at the same time. But the financial capitalist (stockholder) can split their money capital up among hundreds of companies at the same time, to hedge against something going wrong in one company.

Business requires money and human effort. How come those who contribute the money control the business; and those who contribute the effort get no say? Does that sound fair or democratic? Isn't it putting money above people? Isn't it contrary to the whole basis of a democratic society?

Re:Leadership by committee? Doubtful.

[CagedBear]

Do I really want, for example, a technology company in which the janitors have an equal vote with the engineers?

Bad analogy. Some engineers could learn a thing or two from a janitor who instead of being confrontational and droning on about wild ideas that aren't feasible, actually does 8 hours of work.

What you really want to avoid is a bunch of engineers standing around arguing with the janitor thereby preventing him from getting anything done.

Re:Leadership by committee? Doubtful.

[bhmit1]

Business requires money and human effort. How come those who contribute the money control the business; and those who contribute the effort get no say? Does that sound fair or democratic? Isn't it putting money above people? Isn't it contrary to the whole basis of a democratic society?

If you contribute human effort without getting paid, you should be given a share of the company or a partnership. Otherwise, I think it's considered slavery or really really bad negotiating skills. Or were you hoping that you would get rewarded when the business does well and still get paid when it doesn't?

People who put money into a business are investors that know there's a risk they won't see that money again. They are rewarded for that risk with a share of the company that goes up in value when the company does well. The bigger the risk they take, the more that share should be valued if the company actually succeeds.

Employees, on the other hand, take absolutely no risk. If you work, you get paid. If you go working for a startup, they often give you options to reward you for taking the risk that you'll be out of a job in a year and may not have a huge starting salary.

Gordon Gekko said it best, greed is good (up to a point). If you're upset by all those CEO's and business owners that are making all the money, then start your own business or become a CEO (unless you have connections, you're better off trying the former). If you choose to stay an employee, then you get exactly what the company offered in exchange for your services and nothing more.

Re:Leadership by committee? Doubtful.

[TheRaven64]

Why not just change the corporate law: instead of stockholders voting for the board of directors, let the workforce vote for the board of directors, one person one vote?

If that passes, you will see many companies making 90% of the workforce redundant and hiring them back as contractors. Only those certain to vote for the current board will remain. The reason stockholders get to vote for the board rather than employees is that the board has direct control over who is an employee, while anyone can become a stockholder if they are willing to put some money down.

Re:Leadership by committee? Doubtful.

[An Onerous Coward]

Can you name some examples of companies that went out of business because the employees had too much say in how the company was run? You say "Look at all of the companies..." but frankly most of the people who are nodding their heads in agreement with you probably couldn't name one company organized this way, much less one that follows the pattern you describe.

Also, I take issue with your "runny noses" barb. Frankly, this smacks of the same sort of paternalism that neo-cons are constantly accusing liberals of. Only, instead of saying "only government can competently manage the affairs of the infantilized lower classes," conservatives have decided that only the brilliant, noble capitalist can run anything more complex than a lemonade stand properly.

You're right when you say that six people can't decide where to go for lunch. But if "lunch" is a daily event, they can certainly figure out that their current system isn't working, and choose a more efficient decision-making process. I'd start off with a rotating benevolent dictatorship. That is to say, "it's Monday, so Bob gets to decide." You're a bit lacking imagination if you think that every person needs to be directly involved in every decision, and even moreso if think a janitor shouldn't be involved in IT decisions.

Here's how it ought to work: The IT people ask the janitors what they need to do their jobs more efficiently, then work with them as they would work with any customer to get those needs filled. Meanwhile, while the janitors might not have any say in the architecture of the software the company sells, they might have worthwhile input about other aspects of the business, like how the company treats its customers. They'll also have contacts in the community that could be valuable.

The simple fact is, if you treat labor like a commodity where all you do is provide it certain inputs (mops, brooms, and wages) and expect certain outupts (a clean building and no pesky opinions) then these are the only outputs you're going to get. If you treat them like adults who have eyes and ears and powers of observation, and provide means and incentives for collecting that knowledge and spreading it around the rest of the company, then you get invaluable information about the company. Possibly more important, you get an employee who is less likely to treat his job like a commodity where all he does is provide certain inputs (time and effort) in exchange for certain outputs (money).

Re:Leadership by committee? Doubtful.

[radtea]

Look at all of the companies where the workers voted themselves higher and higher wages and more benefits... and then went bankrupt or out of business because they were no longer competitive.

I sure do--that would be guys like these, right?

Offhand, though, I can't think of a single case where a worker-run company has suffered anything comparable. Certainly not in the last few decades.

Corporate governance is about monkey psychology, which in practical terms means the tendency for arrogant idiots to rise to the top of human social hierarchies. Smart people realize their own limitations, and don't have deep-seated adequacy issues, and so tend to stay out of the climb to the "top", leaving a clear field for the kind of losers we get there. Most of whom, I agree, aren't competent to run a lemonade stand.

Re:Leadership by committee? Doubtful.

[An Onerous Coward]

Your arguments only make sense in a world where business owners and laborers come to the table with basically equal negotiating positions. For the vast majority of employees, it's not a matter of voluntarily agreeing to exchange labor for a 'risk-free' reward. Instead, they come from a position of "I have to find some job somewhere, in order to avoid starving to death or being eaten by coyotes." Therefore, they take pretty much whatever terms the owners of capital are offering.

Nor is the exchange as "risk free" as you claim. Employees can be injured or killed on the job, which degrades or eliminates their ability to generate revenue in the future. Employees can have their wages cut, their jobs eliminated, their duties increased, or their working conditions degraded. Any one of those events changes the amount of reward that employees get for their efforts, which means it's absurd to talk of waged employment as a risk-free endeavor. Finally, once they have a job, they cannot back out of it without losing the initial investment that was required in finding the job in the first place.

Honestly, who is really facing the greatest risk? The venture capitalist who invests a few million in a startup, knowing that his other, less risky investments guarantee him high income for life? Or the person who takes a minimum wage job knowing that she could be fired in a couple of weeks and be unable to make rent, or spend the next two years working for a manager who likes to feel her up, or injure herself on the job and have to fight her employer tooth and nail to get her medical bills paid?

The business practices you're defending make the world a far suckier place for everyone, including the companies that practice them. Congratulations on that.

Re:Leadership by committee? Doubtful.

[carpeweb]

Of course, the big downsides of democracy (uniformed voters, mostly) obviously wouldn't exist in a company, where (presumably) every employee is intelligent, educated about the company, and has a personal and very material stake in the company.

Doesn't sound like most of the companies I've worked for, although I was lucky enough to have a few smaller ones like that.

Re:Leadership by committee? Doubtful.

[bhmit1]

Congradulations on missing the point and greatly exaggerating reality. A reality where people are becoming injured on the job or subject to sexual harassment without the possibility to sue and be more than compensated for an inappropriate practice just doesn't exist anymore, unless the employee is not here legally.

The point being made was that if things are so out of balance that employees don't feel they can get a fair job, then they should start a business. The entire reason the system is out of balance is because everyone insists on being an employee, giving far too much power to the few that are willing to be employers. With more small businesses, there will be fewer unemployed, and the employees will have the choice to leave the companies where they feel under compensated.

As for who is facing the greatest risk? I'll take hidden answer c, the landlord that is getting screwed out of several months of rent and legal fees that it takes to evict a deadbeat, followed by the time to repair the place so that it can be rented again in hopes that in a few more months they can stop losing money.

After that, there's the investor that hopes the business will succeed so that they can be paid, and once they have put down their investment of time and money, they have to wait until the business succeeds to see a dime out of it.

Finally, there's the employee that gets paid regardless of whether their work brings in money for the company and can leave at any time with cash from the investment of their time. And if you aren't being paid enough for the time you've invested, then you should make yourself more valuable to the company. That doesn't necessarily mean getting certified, but more training on something useful wouldn't hurt. Quite simply, it means finding ways to help the company make more money, that's all they really care about. Discover ways to cut costs, improve quality, or deliver more results, and if they still don't see your value, find someone that does.

I don't mean for you to think of me as unsympathetic. I volunteer regularly and donate to those causes I feel deserve it. But I think it's foolish to expect a for-profit business to behave as if they weren't. And if you're behaving foolishly, that might explain the problems you've encountered.

Re:Leadership by committee? Doubtful.

[_Sharp'r_]

The main difference between communism, and co-ops/families/other similar organizations is that participation in the latter is voluntary, while communism is predicated on forcing everyone to work together after you steal the physical means of production.

Sure, lots of voluntary organizations succeed when there are sufficient volunteers interested to make them work. In that way they are more like a corporation or a traditional business. Those who start and/or continue to run the organization have a choice about participating or not. A shareholder can sell their stock, a volunteer youth soccer ref or coach and stop volunteering if they don't like the direction of the organization, etc... If enough shareholders want to "leave" or enough volunteers want to "leave" the organization fails, or at least becomes severely devalued. Having alternatives available (a better local youth soccer league, a similar company that is better run) speeds up the whole process and results in better current results through competition for whose organization is going to be run the best.

In a free society (commonly described as a free market environment) if you made it so that employees vote instead of shareholders, then that will reduce your pool of potential shareholders. Presuming your company needs shareholders to start or to operate, it will fail. If you attempt to legislate (change corporate law) the idea into existance, all you'd do is get rid of corporations altogether. What even semi-rational person would take the risk of being a shareholder at the start of a company? It'd be hard enough for existing companies who promise to actually pay some returns, at least they'd have a track record of making it possible to get some invested money back. To tell someone "We're starting a company. We'll get paid as the employees. We'll make all the decisions, you'll have no say in anything that happens. By law, we can't promise you anything else. How much money would you like to invest?" isn't likely to get a big response in terms of cash investment.

Re:Leadership by committee? Doubtful.

[blitz487]

"Why not just change the corporate law: instead of stockholders voting for the board of directors, let the workforce vote for the board of directors, one person one vote?"

Because then nobody would invest money in the company. No money, no company. If you don't believe that, I suggest you try to start such a company.

Re:Leadership by committee? Doubtful.

[Anonymous Coward]

(begin sarcasm)
Yeah, I mean America would never work if everyone had a vote for the legislature and for the national president.

Only the rich people, who own a share of the country, can really run the country. And the richest should get even more votes than the others.
(end sarcasm)
---------------
(begin sarcasm)
No, poor people should really run the country - based on the fact that there are more of them. And the fact that they are poor is proof of their intelligence, education, and perserverance.
(end sarcasm>
Really bub - there is nothing "noble" or "wonderful" about being poor. It takes no special skills, intelligence, or drive.

In response to your other questions, there are few people who can put up the capital to start a business. There are fewer people who can successfully run a business. The janitor is not a janitor because he makes wonderful business decisions.

The executive officers have to also make descisions that benefit the company as a whole, and the shareholders. This sometimes means cutting out parts that are not benefiting the whole, to save the whole (I am trying to avoid the obvious medical metaphors here).

You as a worker can do as the shareholder does - it is called "contracting" or "consulting." You can take contracts from multiple companies to hedge your own bets.

Your last paragraph scares me - it sounds like a plea for communism.
"Lets give everyone the same salary, so Doctors (who invest more years of training), Entrepreneurs (who use perserverance or risk tolerance), Slashdotters (who have developed technical competence and skills) will make the same money as the gas station attendant."

Re:Leadership by committee? Doubtful.

[xanalogical]

I agree. The assumption that engineers are more intelligent or have more sense than janitors is flawed.

If we take the assumption that those above you in the hierarchy are smarter, by virtue that they wouldn't hold that position if they weren't, then how do you explain Dilbert-style management? They're above the engineers so must be smarter? And yet those same engineers would apply that to themselves and reason they must be better than janitors. Don't you think managers do the same to the engineers?

Besides, people are NOT necessarily stratified by intelligence or sense. It may be because they lack educational credentials, or office discipline/punctuality (something I'm not good at), office fashion sense/emotional/social skills, social connections or they don't enjoy playing the corporate climb-the-ladder game.

And if your engineers are designing products for the cleaning industry, a janitor on the team may be exactly what you need.

Re:Leadership by committee? Doubtful.

[u38cg]

Do a little research on the German corporate landscape, where any large compnay is required to have a board drawn from employees. This board has a statutory right to influence the company's decision making and it is a major drag on effecting change within German corporations.

Re:Leadership by committee? Doubtful.

[An Onerous Coward]

"Let them eat cake?" You sound like somebody who has no idea what it's really like at the bottom of the wage scale. Why don't you try going up to a middle-aged Wal-Mart clerk who has to spend 60% of her paycheck just to make rent, and ask her why she doesn't just go into business for herself? Better yet, rather than making a public spectacle of yourself, why not just recognize that the people on the margins don't have the expertise or access to capital that they'd need to go into business?

You seem to think that the "entire reason" for the increasing dominance of employers over employees and the ever-widening gulf between the haves and the have-squats has something to do with the average person's intense desire not to have a business of their own. The simple fact that the vast majority of small businesses fail should put a rest to that lie. A small business takes a lot of effort, a lot of knowledge, and a lot of money. What I'm hearing from you is that those who lack any of those three ingredients should be content with jobs where they have no say in what their company does or how the company treats them.

You and I have totally different definitions of "risk". You seem to take my question as "who is going to lose the most money?" when what I'm really asking is, "which would you rather have happen to you?" So I ask you, would you rather A) lose out on three months rent from an apartment you own, or B) be thrown out of your home and have to either move in with a friend or spend some time in a homeless shelter?

What you ignore is how desperately important it is for a wage slave to always be investing his or her time. You make it sound like employees are whistling along, stuffing their time investment into a mutual fund, which they cash out when they depart from a job. In fact, for a large number of people, the money is going out at least as fast as it's coming in, so the moment the ability to trade time for money is interrupted, you've cut off their financial air supply. A wage slave doesn't "cash out," because the cash is already gone, most of it to pay for things that only a truly heartless bastard would recommend they do without.

This tends to make employees very compliant. If the idea of losing your job is scary enough, you don't complain about sexual harassment or dangerous working conditions or abusive co-workers. You learn to shut up and take it. You get used to feeling powerless. You get used to having your opinions ignored. You learn to accept a completely subservient role, and make the best of it. What a wonderful way to train up citizens of a democracy-in-name-only.

Ultimately, that's why I don't share your sympathy for business owners and landlords. I understand their motivations, their need to bring in money to keep their businesses afloat. But they're living with risks that they chose, and that ability to choose grants them mastery over their own fates that their low-level grunts don't share. "Should I invest my money in an apartment complex, or throw it into a mutual fund" is a much more rewarding choice than, "Should I be a waitress at TGIFridays or Denny's?" and a hell of a lot more rewarding than "should I take this construction job or sleep in the street for another week waiting for something better?" The first choice is a satisfying, empowering one. The second one is a meaningless one, because the results will be basically the same. The third one can hardly be said to be a choice at all.

We're apes, and therefore keenly aware of our own place in the social hierarchy. Recent studies are showing that--beyond the problems caused by lack of access--the perception of being on the bottom rung of the social ladder is itself a major source of stress and ill health for people. That's why I'm constantly harping on the need for greater equality, for a world where everyone gets to feel like they have some control over their lives. Instead, our society seems hell-bent on continuing to expand the gulf between the rich and poor, ripping apart any sense of shared risk, shared obligations, or shared society, all in the name of "personal liberty."

Re:Leadership by committee? Doubtful.

[bhmit1]

You sound like somebody who has no idea what it's really like at the bottom of the wage scale.

True, I won't even attempt to claim that I haven't been very fortunate in my life. But I've also giving a fair number of weekends building homes for those less fortunate. It's just a shame that more of those that we help don't pick up a hammer themselves and try to learn, but rather they sweep up the dust. I'm not making a claim to know how to be poor, I'm trying to point out how to get out of the downward spiral.

A small business takes a lot of effort, a lot of knowledge, and a lot of money. What I'm hearing from you is that those who lack any of those three ingredients should be content with jobs where they have no say in what their company does or how the company treats them.

I was laid off from an IT job and started a consulting business without using more than one month's salary. Did it take knowledge and effort? Yes. That's why I learned as much as I could before the day came. The need for huge funds is way overrated, though I was careful to have enough to pay the bills if things failed.

You and I have totally different definitions of "risk".

The person that lives paycheck to paycheck is taking a huge risk with that lifestyle. But that kind of risk has no value to the company. That employee takes very little risk with their job: if they work X hours, they get paid for that. And without taking a risk with the company, the company shouldn't be under any obligation to reward them beyond what they are paying them.

As for the solution, I think people need to stop asking for pay raises for doing the same work they were doing last year. People need to learn that they are rewarded for what they do for the company and not according to what it takes to survive in the world. This isn't a socialist society and if it were, I doubt you'd like things much better when the capitalist all leave for a better place. The landlord that chooses between living without 3 months of rent and investing in a mutual fund does no such thing. When the property doesn't make money, all the rents are raised or the business is sold. Personally, I'd prefer to not have to pay more in rent because other people are unable to pay anything. There's already more than enough spent in my taxes to provide them shelter in other ways.

I have no expectation of changing your ideas toward this. We are simply going to disagree, but you're right that starting a business isn't meant for everyone. However, for those that have the courage, the desire, and a good idea, I'd hope they take this as a suggestion to give it a try and don't give up when they fail the first time. We need a lot more of them in this world. We also need a lot more employees that strive make things better rather than provide a list of excuses for why they can't only do the minimum that's required. The gulf between the haves and have-nots only widends when there are a huge number of employees willing to work for a minimum wage that the few employers get to pick from.

Re:Leadership by committee? Doubtful.

[An Onerous Coward]

You admit that you don't know what it's like to be poor, and you seem oblivious to the challenges they face. Yet you claim to know how to solve their problems. I'm sorry, but what worked for you isn't always going to work for people basically like you, so how much less effective is your advice for people whose situations don't remotely resemble your own?

I'm curious. If an employee has practically no stake in his job, if his employer's goal is to get the maximum work for the minimum reward, and if the employee is treated as an object of contempt and mistrust, then where is the incentive for him to strive to make the company better? If the employer is fighting for maximum work for minimum compensation, then why do you blame the employee for fighting for minimum work for maximum compensation? Every person in this world is blessed with only a finite amount of physical, intellectual, and emotional energy, and asking someone making spitting distance to minimum wage to lavish it on an uncaring employer is naive.

Is it the hope of promotion that should drive people? Or the hope that, as the company's profits soar, their employers will hand out pay raises? Hardly. Corporations have fought tooth and nail to keep wages and benefits down, to undermine the labor movement, and to make sure that as much of the nation's tax burden is shoved onto their employees rather than themselves.

Finally, people damn well ought to be able to ask for pay raises for "doing the same work as last year." The employee is more experienced than last year. The employee is therefore more efficient than last year. The employee is working with new technologies that increase productivity that weren't there last year. In short, the employee is generating more wealth for the company, and is just asking for a small fraction of it back. Even the janitor--who is only keeping the building as clean as he did five years ago--is providing a more valuable service, if the building itself is generating more wealth than it did back then.

For the last several decades, hourly productivity has been rising dramatically, while hourly compensation has been pretty much flat. So the fraction of productive work that employees get to keep has been plummeting. This will always be true so long as it's easier for employers to replace demanding employees with pliant ones than it is for employees to find more generous employers.

Finally, you have no right to whine about how the government picks your pockets to promote the general welfare. The U.S. has the lowest tax burden of just about any industrialized nation, and we spend nearly as much on our military as the rest of the world combined. I understand why we need to make sure we can hold our own in the event of invasion by every single other country in the world, but ask yourself, was that true before Bush took office?

Compare our situation to European countries. They spend a much higher fraction of their GDP on social programs and, guess what? People like it that way. That's because their programs are broad enough to benefit everybody, rather than our miserly programs, which benefit only the poorest of us, the people generally assumed to deserve their fates because of their ineptitude, vice, and sloth.

Oh, I'm sure you'll argue that these programs have had a generally negative effect on the EU economy. But Europeans live longer, report themselves to be happier, and they've got all the good restaurants. So which economy is really doing a better job of distributing limited resources in a way that fulfills the most needs?

Re:Leadership by committee? Doubtful.

[bhmit1]

You admit that you don't know what it's like to be poor, and you seem oblivious to the challenges they face.

And how much experience do you have starting a business and hiring employees?

So how much less effective is your advice for people whose situations don't remotely resemble your own?

It won't work for everyone, I already said that. But it's better than bitching about how nothing will ever work for you and expecting someone else to fix your problems.

then where is the incentive for him to strive to make the company better?

To not be replaced by the person that finds a way to do their job in half the time.

Is it the hope of promotion that should drive people? Or the hope that, as the company's profits soar, their employers will hand out pay raises?

What about the desire to be a better person, which in turn, gives you more choice of what you do with your career, and maybe even do something you enjoy?

Finally, people damn well ought to be able to ask for pay raises for "doing the same work as last year."

You just followed that with a bunch of examples of how they are doing different work. Congradulations, enjoy your 3%.

Finally, you have no right to whine about how the government picks your pockets to promote the general welfare.

I'm a citizen, I vote, I have just as much a right as everyone else. I'm confused, where you suggesting higher or lower taxes?

Compare our situation to European countries.

Unemployment around 7-10%, and an average time between jobs around a year. Discuss how good the situation is with some french college graduates that businesses won't hire because they have no experience and a very difficult time being fired.

You seem to think that you'll change my mind, and I hate to break it to you, but I'm too damn stuborn. I'm not going to change the way I run my business because of what an employee wants. I'm the one that loses money when a bad decision is made, so I get to decide. You're welcome to ignore my suggestions, after all, I'm just some guy posting to slashdot. The successful business people were the ones that stopped giving reasons for why they couldn't and decided to just do it, but I don't get to tell you which group to be in. Finally, seeing you claim that I can't give advice to people that are less fortunate and that you should be able to tell businesses how they are run seems hypocrytical at the least.

Re:Leadership by committee? Doubtful.

[An Onerous Coward]

You seem to think that you'll change my mind, and I hate to break it to you, but I'm too damn stuborn. I'm not going to change the way I run my business because of what an employee wants. I'm the one that loses money when a bad decision is made, so I get to decide. You're welcome to ignore my suggestions, after all, I'm just some guy posting to slashdot. The successful business people were the ones that stopped giving reasons for why they couldn't and decided to just do it, but I don't get to tell you which group to be in. Finally, seeing you claim that I can't give advice to people that are less fortunate and that you should be able to tell businesses how they are run seems hypocrytical at the least.

In the spirit of hypocrisy, I would advise your business to teach its CEO how to use a spellchecker.

If only you'd used "congradulations" again.

You run your business exactly as you like. Don't give your employees any authority, and wonder why they don't take responsibility. Only tell them what you think they need to be told, and wonder why they don't seem to understand the realities of your business. Don't pay them more than you absolutely have to, and wonder why they don't go the extra mile for you. Just remind yourself that our society is in a steep moral decline caused by MTV and Internet pornography and kids having no respect for their elders. It can't possibly have anything to do with you.

In soviet russia...

[Edward Teach]

organization runs you.

Cooperative

[John Hasler]

This is called a "cooperative". These have been common in the US for over a hundred years.

Re:Cooperative

[plopez]

I wish I could mod you up. To expand on the topic, coops are very common, some examples include:
-Credit unions
-Insurance compaines
-Religous communes
-Rural coops, including telephone, electric, water and sewer coops.
-Mutual benefit corps. such as fraternal organizations.

What is blowing the minds of many of the posters is the concept that there is no strict heirarchy of control. There seems be be a propensity of some people to disbelieve that anything can get done without a strict military/fascist type table of order.

And yet very successful examples are all around us.

Re:Cooperative

[John Hasler]

> What is blowing the minds of many of the posters is the concept that there is
> no strict heirarchy of control. There seems be be a propensity of some people
> to disbelieve that anything can get done without a strict military/fascist
> type table of order.

There does not exist a human organization in which everyone is equal (though some groups try to pretend).

Re:Cooperative

[markdavis]

Generally, co-ops only work well with a relatively homogeneous collection of people. In a business, it is less likely that all the employees will be in such equal mindsets.

I wouldn't think that co-ops would scale well. It is not all that hard to get 2 to 5 people to agree on a course of action. Much harder , but still doable with 10. But it is nearly impossible with 100 or 1,000. So it will just be a "majority rules".

Without some type of heiarachy, decision making can be much too slow in an "everyone is equal" environment. You need specialization and sub-grouping to focus on particular issues in depth. And some specialization will, inevitably, put some employees on different authority levels than others. For example, hiring and firing... with 1000 employees, there is no way that such an on-going staffing task could be done by "majority rules".

Another example is financing. How many of those employees will really understand finance enough to participate in the voting/control of the spending? Buying? Information Systems? Marketing? Etc.

Re:Cooperative

[freemywrld]

There does not exist a human organization in which everyone is equal (though some groups try to pretend).

This is simply not true. I used to live in a housing co-op (and yes, we were a legitimate non-profit business), and the organization was such that everyone was equal. Everyone had a voice and a vote. Nothing was settled until consensus was reached (75% of the group had to agree). The only way anyone's say was limited was if they chose to not participate.

Re:Cooperative

[Rix]

So, rule by those with the most free time. With housing co-ops, it turns into a geritocracy of the attention deprived.

Re:Cooperative

[dubl-u]

There does not exist a human organization in which everyone is equal (though some groups try to pretend).

However, the style of cooperatives and consensus-driven organizations is that you don't institutionalize power differences. Just because people aren't equal doesn't mean that we must create and enforce a one-dimensional ranking.

Re:Cooperative

[davmoo]

Besides sales, marketing, IT, etc, there is also the other end of the scale...how many of those employees will volunteer to clean the toilets and empty the trash cans every day. Sooner or later, every "we're all equal" business is going to have trouble with the proverbial (and now politically incorrect way to say it) too many chiefs and not enough indians. Nobody aspires to be a grunt.

Re:Cooperative

[automatix]

Fonterra is the world's largest dairy company, and its a producer's co-operative. Now, the producers (farmers) own 100% of the Fonterra shares, and they're also the company's suppliers. A co-operative doesn't neccessarily mean everyone is equal, just that everyone is an owner/stakeholder and that the company acts in their collective interests. In which case co-op's can scale.

Re:Cooperative

[siriuskase]

They can contract out the janitorial work, just like most other companies.

Re:Cooperative

[Jason Earl]

Even in cooperatives power is generally doled out according to who put in the most capital. In that sense they are run just like any other corporation. The folks fronting the money get to make the decisions. Any sort of business endeavor that is organized differently is doomed to failure. After all, why would I put my capital into a business, especially a risky small business, if some dork that doesn't put in as much capital as I do gets just as much say in how the business is run.

Re:Cooperative

[einhverfr]

Sure, and a non-profit is different from a for-profit business in terms of organization.

Some businesses such as Gore and Associates do a pretty good job of avoiding institutionalized command and control hierarchies. Hierarchies still exist based on a number of criteria of course, but they are based on persuasion rather than delegated power.

Personally I am looking into hybrid structures somewhere between your traiditonal C&C system and the lattice system that Gore has pioneered.

Re:Cooperative

[shmlco]

"... but they are based on persuasion rather than delegated power..."

So the slick con man with no skills other than the power of persuasion is now in control? Isn't that how we got GWB?

Re:Cooperative

[shmlco]

So? In any organization there are "scut" jobs that no one wants. Look at the problems Open Source often has with maintenance and bug fixes, as most developers would rather be implementing new features than fixing old ones.

Re:Cooperative

[dwater]

> why would I put my capital into a business, especially a risky small business, if some dork that doesn't put in as much capital as I do gets just as much say in how the business is run. ...well, because you realise that other people may know better than you.

Re:Cooperative

[dwater]

You're blaming the persuasive person for the gulibility of the persuaded.

Re:Cooperative

[shmlco]

No blame, just an illustration of how such a system can and would be abused.

Re:Cooperative

[Anonymous Coward]

... and in the UK, for more than 150 years. Check Robert Owen and William King on the wiki for some historical background, including the idea and philosphy behind the cooperative movement. You will surely learn a thing or two to improve your open source business idea.

Re:Cooperative

[werewolf1031]

You're blaming the persuasive person for the gulibility [sic] of the persuaded.

No, he's blaming him for exploiting that gullibility, which is wrong no matter how gullible the victim may be. Being gullible does not give anyone the right to take advantage of your gullibility, it merely makes their job easier. Nice "blame the victim" argument ya got there.

Re:Cooperative

[dwater]

...but you're assuming some bad intend on the part of the persuader.

If the persuader thinks he is correct, and all he needs to do is convince someone, then is it really his responsibility to enforce some kind of, "Now that's just what I think. I'm certain I'm right, but you should come to your own opinion on this and vote your own way." Actually, that'd probably work better, since it displays some kind of balance and sensitivity.

Re:Cooperative

[RubberBaron]

You can break coops into smaller functional units. The whole "coop movement" can then become quite large. Take a look at Mondragon: http://en.wikipedia.org/wiki/Mondragn_Cooperative_ Corporation/, some 70,000 people involved, not necessarily fully involved, not perfect either. But then, neither are the 'standard' sociopathic models of companies.

Re:Cooperative

[UnHolier than ever]

That's the problem I have with most coops. One of my friend bought all his meat from a farm cooperative because he thought it was more fair than to pay a corporation, since everyone involved got a share of the money. But actually, the only members of the cooperative were the landowners. The delivery truck drivers were not part of it, nor were the people who built the tractors, nor the oil diggers for the gas, nor the people who made the fertilizer, nor the clerks and accountants, nor....you see my point. A cooperative is nothing else than an employee-owned corporation, and the only way to have a "fair" sharing of the price paid would be to include all the employees of all the companies that helped create the final product, and that doesn't exist.

Re:Cooperative

[jonbryce]

And in Britain for longer than that. As far as I'm aware, the first Co-op was founded near Manchester about 150 years ago to sell high quality food at affordable prices to the local working population. It is still around today - http://www.co-op.co.uk/ , though not as big now as it was about 40 years ago.

Re:Cooperative

[broeman]

not nearly as big, but Arla Foods in Denmark and Sweden has 10,600 milk producers, which equally have a share in the company (1 producer = 1 share is the rule). 140 shareholders are representing them in the "Board of representative", which is elected, and the Supervisory board is of 16 shareholders. But I guess, when you're working on "the common project", you don't have much time for milking cows ;)

Re:Cooperative

[williamhb]

I wouldn't think that co-ops would scale well. It is not all that hard to get 2 to 5 people to agree on a course of action. Much harder , but still doable with 10. But it is nearly impossible with 100 or 1,000.

The Co-operative Group in the UK has some 50,000 employees, and many many more members (even customers can be members of the co-operative, and given they run the largest corner-store chain in the UK they have a lot of them). It also has a handy list of other UK co-operatives of various sizes http://www.co-op.co.uk/corporate/index.php?pageid_ grp=79.

So it seems co-operatives do indeed scale reasonably well.

Re:Cooperative

[williamhb]

Fundamentally the difference between a co-operative business and a publically traded company is that in a co-operative every "shareholder" has exactly and only one vote, not a number of vote depending on how many shares he buys or is given as part of his signing incentive. That certainly does make everyone much more equal than in a publically traded company: at Random Multinational, Inc, an incoming executive will usually be given a number of shares that outweighs the share-ownership of thousands of longstanding but lower-graded employees; at Random Co-operative Group, the CEO has the same number of votes at the AGM as the cleaner does: one.

Re:Cooperative

[hritcu]

My experience with highly heterogeneous groups tells me that 4 people can already too many to get along in this way.

Re:Cooperative

[bitspotter]

What is up with this "government by committee" vision the curmudgeons have in this thread?

Companies are ALREADY run "by committee". They're called shareholders.

Coops are not companies that insist on bogging down their management processes by consulting every shareholder on every decision any more than businesses-as-usual.

The main point is that the shareholders just happen to be the employees - and they all hold an equal amount of voting stock. That's it. That's all there is to it. Executive decisions are still made daily by executives hired for the purpose; accountable to a board of directors, which is accountable to the shareholders.

Re:Cooperative

[Dollyknot]

Your link goes nowhere.

check this out

http://www.google.com/search?hs=Z0C&hl=en&client=f irefox-a&rls=org.mozilla%3Aen-US%3Aofficial&q=%22T he+mondragon+experiment%22&btnG=Search&meta=/

Re:Cooperative

[markdavis]

You are very correct. A co-operative doesn't neccessarily mean everyone is equal. In fact, going back to the main "article" (well, there is no article, per se, but a question)... The poster was asking about an "open source structured business". He never mentioned the words "co-op" or "cooperatives". I suppose when I was replying, I was kind of thinking of a business where everyone was relatively equal and there was, as the poster said:

"There is no leader , no CEO no boss. Everyone as a group decides what should be done."

So, let's strike the whole comparison to a cooperatives, since that is not what he is talking about, anyway.

Re:Cooperative

[RubberBaron]

Hah! The Slashdot AutoURL trashes the o(accent). Look for Mondragon cooperative on Wiki (or anywhere else).

Re:Cooperative

[Registered Coward v2]

I wish I could mod you up. To expand on the topic, coops are very common, some examples include:
-Credit unions
-Insurance compaines
-Religous communes
-Rural coops, including telephone, electric, water and sewer coops.
-Mutual benefit corps. such as fraternal organizations.

What is blowing the minds of many of the posters is the concept that there is no strict hierarchy of control. There seems be be a propensity of some people to disbelieve that anything can get done without a strict military/fascist type table of order.

Yet all of your commercial examples have a hierarchy and control structure - Coops and Mutual Companies have boards, CEO's, managers, etc. to run things - individuals (whether owners or employees) can't just decide the direction they want to go and go do it - unlike open source software where anyone can add , modify etc. without anyone else's permission.

The hierarchy exists to decide how to allocate a companies resources to achieve stated goals. Even if everyone has a say, somebody needs to decide what ultimately gets done; allocate resources, monitor progress and ensure the right skills are applied to the right work.

Some are more democratic or allow more freedom to chose a direction (often the case with consulting partnerships where the intellectual capital is the main driver of value) but ultimately some group decides what does and doesn't get done. When others don't like it, the "fork" the company and start their own; especially if it's a company where the value is in the employee's knowledge - eventually some decide they are better of on their own than as part of a group (usually because someone else is getting more money than they are so they decide to go it alone.)

Re:Cooperative

[rkww]

It can be made to work. In the UK, for instance, we have The Co-Op - one of the largest consumer-owned businesses in the world, and John Lewis - a partnership, with the company held in trust on behalf of its employees.

Re:Cooperative

[Jason Earl]

Of course some people know better than I do. That's why every company tries to hire smart people. In most cases they even hire a business manager (or CEO) to actually run the business. That doesn't change the fact that the person that puts in the capital gets to make the choices. After all, you can always fire a CEO.

Re:Cooperative

[An Onerous Coward]

I think the problem is greater in most Open Source projects, because it's hard to provide incentives for the grunt work. If a company that is making money sees that it's being harmed by a lack of bugfixes or a lack of documentation, the solutions are obvious enough: pay someone to do it.

In a communal-style business, people might decide on a system for ranking the importance of bugs (some combination of severity and required skill and effort), then use that to decide how big a bounty to offer. For example, you could say that bug X is worth 25 points, and each point gets you $2.00. Then just keep increasing the dollars-for-points exchange rate until somebody wades in and fixes the bugs, or it's realized that the bugs aren't really worth fixing.

Re:Cooperative

[einhverfr]

So the slick con man with no skills other than the power of persuasion is now in control? Isn't that how we got GWB?

Funny, I thought that is what happens in normal corporations. Enron, Worldcom, SCOX, etc. are great examples...

One example of a successful business based on this sort of egalitarian model is WL Gore and Associates. THey make Gore-TEX(R) and other flouro-polymer products. Perhaps you have heard of them?

Again this doesn't work in environments where there are legal requirements for officers and directors. In this case, I am looking into other hybrid models where you have some hierarchy but also a great deal of freedom to contribute.

Re:Cooperative

[An Onerous Coward]

I'm not sure I'd do it that way, because it undermines the ideals that I'd be striving for. Once you start contracting out services, you create a class of people who are working for your company's benefit, but who aren't participating in the democratic aspects of the company. In other words, there are still people in your organization that you're pretty much obligated to screw.

But I do recognize that (especially for a small company) it may well be impossible to have all your expertise in-house. I'm still trying to figure out how to deal with that.

Re:Cooperative

[number11]

Even in cooperatives power is generally doled out according to who put in the most capital... The folks fronting the money get to make the decisions.

Not true, in my experience. Most coops are one member, one vote. The member with $10 on deposit at the credit union has one vote, same as the member with $10M on deposit. The small-business worker cooperatives I am familiar with are one worker, one vote. IIRC, mutual insurance companies, farm cooperatives, and consumer cooperatives are the same. If they produce a return (rebate) to members, the amount is usually proportional to the amount spent (invested), but that's a different issue than governance.

Any sort of business endeavor that is organized differently is doomed to failure.

Which is why there no longer are any mutual insurance companies, credit unions, farm coops, worker coops, or consumer coops, some of which have been in existance for over 100 years.

Re:Cooperative

[Dollyknot]

I agree, there is however, a way out of this problem with a new kind of coop. The coop workforce elects its leader from its own members, for a term agreed in the coops constitution, if the leader does not pass muster at the end their term, they do not get reelected. This is the way of the Mondragon corporation.

It would be nice if someone would put this on the 'net.

http://www.google.co.uk/search?hs=Z0C&hl=en&client =firefox-a&rls=org.mozilla%3Aen-US%3Aofficial&q=%2 2The+mondragon+experiment%22&btnG=Search&meta=

Re:Cooperative

[dazby]

However, all succesfull examples of these groups have some strong leadership. Even if it's informal. The same goes for Open Source software. All thriving projects have effective leadership of some sort. Those without leaders, wither and die.

Re:Cooperative

[siriuskase]

This is open source where creators are in it for the glory, not a paycheck. There is no money in maintenance and bug fixes. There is no money in the good stuff either,but it's a better way to jack your reputation up a notch.

In a corporation, even one owned by the workers and run by a democratic voting system of some sort, not only will the person doing the less glorious work get paid, but everyone in the group will be able to see who does the work. I don't know what voting strategies everyone would use, but if I was in this coop or whatever, I would expect entrylevel, interns, etc, to pay their dues just as in any other company. The difference would be that if they don't, their cow orkers would vote against them at the periodic review. The results might seem similar to violating the orders of an autocratic boss, but it would be the entire work group deciding that this guy wasn't doing enough of the scut. Stars, naturally, would be exempt from that sort of work, but it would be the decision of the whole group. The people who would get ahead would be the ones that the whole group admires. The kind of person who impresses the bosses isn't necessarily the kind of person you'd want to work for.

Re:Cooperative

[siriuskase]

GP was talking about janitorial work. There is no normal career path from janitor to star technology worker. If a new hire did his share of the unpopular tasks while simultaneously bidding (or whatever) on the fun jobs, this should be recognized at his periodic review. Same idea as anywhere except the decisions would be made by demoractic vote of all members and not just "bosses" looking down. Everyone would need to think you were worthy of the better assignments, not just the bosses who might not actually know how well everyone on the team works. By advancement, I don't mean it in the sense that if you do well, you get a raise and get promoted into management, I simply mean your coworkers are more likely to agree with your decisons for which work tasks to do.

Re:Cooperative

[dubl-u]

Even in cooperatives power is generally doled out according to who put in the most capital. In that sense they are run just like any other corporation.

For the cooperatives I'm involved in, they are entirely consensus-driven, with no formal power structure. It works fine for us; one's going on five years, and the other just hit three. Of course, our capital investments are minimal and neither intends to turn a profit. They're also small, with 25 and 15 members respectively.

I think a looser structure like that breeds resiliency. With no formal power, there's little authority to abuse. And different people take leadership on different issues when it's something they care about. Since many people are used to leading, it's no big deal when a heavy hitter goes on vacation or gets a little worn out; others pick up the slack as needed.

Re:Cooperative

[pkphilip]

You should perhaps take a look at this for size:

AMUL Diary - 2.41 million members
http://www.amul.com/organisation.html

Lijjat - 40,000 women many of them illiterate
http://www.lijjat.com/Content.asp?id_Section=7

Dabbawallahs of Bombay - Ab 4500 members.
http://www.successfulmanagers.com/51issue/mantras1 _51issue.htm

All of these are cooperatives. This model does work even for very large numbers, but it is not suitable for all types of businesses.

Re:Cooperative

[dubl-u]

t. You need specialization and sub-grouping to focus on particular issues in depth. And some specialization will, inevitably, put some employees on different authority levels than others.

I disagree. Specialization can also work from trust, not just from authority. When I delegate things to people I generally trust them to do the work, even though I have the authority to interfere. In society, we put a lot of trust in academics, researchers, and third-party opinions, even though we don't give them formal authority.

This is exactly how a lot of development teams work, too. When the database guy tells me how something should be done, I'll generally do it his way. When we disagree, we work it out. If we have to resort to authority, we've failed in something important.

Re:Cooperative

[dubl-u]

Sooner or later, every "we're all equal" business is going to have trouble with the proverbial (and now politically incorrect way to say it) too many chiefs and not enough indians. Nobody aspires to be a grunt.

You'd be surprised. One summer in college, I worked in a factory. For that summer, I loved it. One of my clients just hired an office manager. She loves it because it got her out of a waitressing job. The trick is to hire people for whom the scut work is something they want to do.

It's also worth having everybody do some of the grunt work. Another client has everybody build their own desk. And a third rotates ugly jobs (like production support and emergency bug fixes) between people every week. If everybody cleans up messes, there will be a lot fewer messes.

Re:Cooperative

[Anonymous Coward]

I think you are a twat, perhaps you disagree?

Re:Cooperative

[camt]

Co-ops are not an example of an organization where everyone has an equal say. I am a member of a credit union, yet I do not have ANY say in how they run their business. I am a voting member, so I certainly can vote my {delegates|representatives} off the board if I don't like what they are doing (and a majority agrees), but just being a member does not give me a portion of control of the organization. Ownership, shared benefits and shared costs != Control.

Re:Cooperative

[siriuskase]

It depends on where you draw the boundaries. Plenty of employee owned corporations already exist, but the employees are simply shareholders without any more say so in day to day affairs than if they were anyone who happened to purchase stock in the company he works for. The only difference is that the SEC requires less documentation to the shareholders than a public corporation. I'm not sure that's an improvement for the employee who isn't a high level manager.

if all the employees are given a vote on more of the decisions, that's more in line with this article. Even then, you have to draw a boundary on who gets a vote. At the extreme, anyone who ever does business with a company could get a vote. But, customers already do vote with their dollars, so maybe what you want is everyone who ever provides a good or a service to get a vote. (pictures someone collecting the ballots of migrant workers for the farm cooperative)

With a vote?

[MarkByers]

You mean a direct democracy? In a democracy the majority tries to take privileges away from the minorities for their own advantage. This works OK for countries where it is very difficult to leave but it's hardly a good way to run a company. A company is supposed to be a team that works together. The people that get taken advantage of can easily quit and then you end up with a smaller company with the same problem.

Re:With a vote?

[Billly Gates]

Then if the upper guys quit (The ones the average worker will take advantage of) then it will no longer serve the average employee and it would hurt them.

Unless of course you think the average worker is not qualified to make such decisions and they can shoot themselves in the foot?

Yeah your supposed to work together as a team but guys with clipboards and 4 function calculators have no bussiness telling MBA educated CEO's and board of directors business decisions. Apearently this is whats happening and many big companies have no long term plans because these silly CPA's walk in and tell them what to do or even fire them. Thats not right either.

Reminds me of wall street punishing Sun for first missing out on the pc market eating into workstation and server sales. So sun becomes profitable again by making cost effective systems and then wall street punishes them again and fire Scott mcNealy for not concentrating on selling big mainframes that bring in all the dough and ignore the market disinterest in such systems.

Re:With a vote?

[shmlco]

"... wall street punishing Sun..."

Oh please. The people at Sun made decisions as to what products they wanted to make, how they were going to develop and market them, and what price points they were going to hit. Tens of thousands of people in other companies examined those decisions and decided if those products and that direction was right for them, and purchased accordingly.

Know what? They guessed wrong. People didn't want expensive, proprietary OS's (Solaris) and expensive, proprietary hardware (Sparc) that often provided no significant benefit over commodity software and hardware. They also spent a ton of dough on a system (Java) they had no way to monetize.

Bottom line: the "market" was disinterested in their products, sales flatened out, then dropped, and then, and only then, did Wall Street "punish" Sun.

And what THIS reminds me of is why I don't want a bunch of uneducated people with no business sense running a company.

Re:With a vote?

[marcosdumay]

"Then if the upper guys quit (The ones the average worker will take advantage of) then it will no longer serve the average employee and it would hurt them."

Well, if the upper guys quit, besides the company having no more top emploees, the average ones will become the next upper ones (and some under average will turn into average ones) and (if somebody is really taking advantage here) will be taken advatage of now...

I guess you can tell when that stops... But cooperatives do work, and that is because the average people don't take advavantage of the top ones.

And, as a note, you'll never create a susessfull cooperative on an environment where people quitting (or being fired) makes sense.

Our first order of business...

[radiotyler]

I'm trying to start off from as simple as possible(hence the plain webpage).

Five bucks says he used Vi to make the whole thing.

Re:Our first order of business...

[LiquidCoooled]

You aren't a very good business man, you just lost five bucks.

<head>
<meta http-equiv=Content-Type content="text/html; charset=windows-1252">
<meta name=ProgId content=Word.Document>
<meta name=Generator content="Microsoft Word 11">
<meta name=Originator content="Microsoft Word 11">

Re:Our first order of business...

[radiotyler]

Sonofa... well, I guess I just got voted off the "Open Source Investment Team".

Re:Our first order of business...

[frostoftheblack]

What better way to start an open source company than with Word-designed webpages?

Re:Our first order of business...

[Bing Tsher E]

That's what happens when everybody overpromotes 'Firefox' and virtually nobody still runs a browser (the Mozilla suite- 'seamonkey') with that nice little 'Composer' icon down on the status bar. Everything is typed into Web Forms or people are stuck using Microsft tUrd or the likes.

Re:Our first order of business...

[aqui]

What's vi ? ;)

(I'd put my bets on Word or Notepad)...

Who's neck?

[karearea]

It would take a big shift. Too many people think in terms of who's neck is on the line, they like to think of the board of directors or the CEO or the team manager.

Let's not knock communism, like all political ideologies it has it's faults, and the common flaw with most systems is the abuse of power. Even democracy has it's abuses .. the 'great democracy of the west' has what seems to be leaders passing jobs to friends, companies providing campaign contributions to ensure that demcoracy works.

Re:Who's neck?

[thethibs]

We don't need to knock communism—it does a great job of knocking itself.

I know they don't teach history in CS streams, but look it up. Communism has failed everywhere it has been tried, in spite of using force to keep everybody inside. You don't see a whole lot of American refugees lining up to become Cuban citizens. Ask your parents about the Aquarian 60's and the thousands of communes that formed in the US and Canada and lasted about two weeks before the cooperative spirit waned.

Business organizations where everyone is a stakeholder are called co-ops. They've been around for a long time and every capitalist society has a small number of them. They work especially well when the only reason for belonging is to save money. The successful ones have a permanent management team that really makes all the decisions while everyone else just harvests the benefits and goes to the occasional meeting to vote unanimously in favor of management proposals.

--
What America needs is a president who can save the world while humping chubby jewish girls in the oval office.

Re:Who's neck?

[nelsonal]

The approving of management's proposals sounds an awful lot like what stockholders of privately held companies do too. Communism is great, if (and only if) all the members have a strong sense of loyalty to the unit. Families, some religious organizations, and a few small corporations operate very successfully in a communistic environment. Scaling it up to anything larger usually results in chaos and loss.

Re:Who's neck?

[Short Circuit]

I know they don't teach history in CS streams

Yeah, we do. It's called general education. In Michigan, it's part of the MACRAO agreement.

Communism is still alive in North Korea, Cuba, China and Viet Nam, to name a few countries. But none of these are likely what you're thinking about. Marxist communism has never been fully implemented on a country-wide basis.

Not that I would advocate it...I like government-guided capitalism just fine.

Re:Who's neck?

[Millenniumman]

If people are that loyal, then communism is unnecessary. They would all work together in a free, capitalistic environment.

Re:Who's neck?

[rohan972]

Families, ... operate very successfully in a communistic environment.

Families operate by killing those who control the means of production and siezing control?

You may wish to read the communist manifesto since it is the document written by Marx and Engels for the purpose of "openly, in the face of the whole world, publish their views, their aims, their tendencies" of the communist party. Among the ideas addressed in that document are the objectives of destroying the family, religion and business. Your notion that families, religions and businesses operate successfully in a communistic envirinment is absurd. To the extent that families, religions and businesses are successful, communism is not, as they are mutually exclusive. At least, according to the Communist Manifesto.

Communism is not another word for sharing. Sharing is common to many philosophies/religions. Sharing in communism is the excuse used for the communists to sieze power and become the new ruling class. The oppresive communist regimes were not an accident, that's how communism actually works.

Re:Who's neck?

[rohan972]

Marxist communism has never been fully implemented on a country-wide basis.

It could therefore be said to not exist, it's a fantasy. The brutal communist dictatorships (ie: all of them) are the actual reality of communism. To say that communism is some utopian ideal that doesn't include mass murder as the path to political power and brutal suppression as the method of maintaining is to live in fantasy, not reality.

Re:Who's neck?

[nelsonal]

Makes sense that they would want to destroy the competing loyalty units to the state, which was intended to operate as a very large family does (with each sharing resources effectivly). I didn't mean the family thrived under communism (it didn't no institution other than the party did). I meant that families operate in a manner very similarly to how most communists hope to operate most families don't charge the children rent for example and everyone pitches in on jobs even if some are more productive than others. Usually the fridge isn't sectioned off into zones of personal property rights but food in there is owned in common with all. But that doesn't work at all once the size of the group gets to be much larger than most families.

Re:Who's neck?

[rohan972]

ok, your reply at least makes sense.

Where we've differed is that I take my view of communism from the communist manifesto. Communal property isn't really indicative of communism unless you kill the previous owner. This is communism in theory and in fact. So when someone compares a working system to communism, I tend to point out this rather significant difference.

That said, I do understand your point now.

Open source franchise

[caston]

I was very interested in this idea for a a long time. Particuarly the idea of having an open source franchise. It is very expensive to setup a franchise though as the government and perhaps even a few lawyers want their bit. I think if you can get around that it could work initially with a very simple business like an open source chain of sandwich shops. Unfortuntaltey I've been spending all my time running a not-so-open business as a self-employed call-out PC tech. Since then i've become interested more in radical life extension and extending my youth span. I may come back to open source business at some point though.

Don't we already have this?

[kimvette]

Isn't this called a publicly traded company?

Re:Don't we already have this?

[plopez]

except the way most corp. charters read it make a mockery of shareholding as ownership. Usually the board can have their way with the stock holders and screw them in a legally acceptable manner.

Re:Don't we already have this?

[nelsonal]

It's not so much the corporate charters, as the ambivolence of most shareholders of their holdings. Most mutual fund holders have no idea what companies they hold and as a result don't even realize that they (collectivly) could have substantial influence on management. Happily in a market based society, everything usually works like a pendulum so you'll likely see an era similar to the 1980s where corporate raiders send poor management teams packing. Ironic that the bad boys of the 80s were usually doing good things.

Re:Don't we already have this?

[Millenniumman]

Then it is wise not to invest in those companies.

Re:Don't we already have this?

[plopez]

then you can scratch off most publicly traded companies. If you want voting write, you need to be able to get a copy of the charter and read it, then cross reference it with applicable state or province and national laws. You may want to go to law school first.

Re:Don't we already have this?

[An Onerous Coward]

No.

Next question?

Use OS as byline.. free pass..

[Tracer_Bullet82]

If you're asking for an organiztion where everyone has "equal" say that's just running for disaster.

There's a valid and powerful reason for hierachy and divison of power(yeah, yeah I know it can get corrupted and all, that does not detract from my point!), because if everyone can go on willy nilly and do whatever they want, then what's to ensure something or heck anything get's done. It's get thing done.

Anyways OP's analogy is flawed, when is in a OS project everyone has equal say?

The project manager certainly has more say than a contributor, and there's nothing wrong with that.

And as much as I love OS and the prevailing spirit here.. can we stop granting aticles based on it just using /bots favourite flavor of the weak?

Re:Use OS as byline.. free pass..

[einhverfr]

Sometimes there are legal reasons for some hierarchy-- I don;t think a corporation can effectively operate without officers, for example.

But if you have ever worked at a large company, imagine how much more productive you could be and how productive the company would be if the political issues could be avoided. Indeed at some large companies I have worked for, politics was the single largest area where energy was spent (sometimes even more than the main productivity goals).

The political problem is the main reason I would never consider accepting employment from Microsoft, Intel, or other large companies.

It doesn't have to be this way. But it requires a fresh new way to look at how buisnesses are organized. THe idea of highly egalitarian businesses is only the beginning. One also has to put a great deal of thought into how organize teams so that people can make good use of their productive energy and avoid political problems. I don't wnat to go entirely into my ideas here becuase I am still in the process of finalizing how I want my business to scale.

Re:Use OS as byline.. free pass..

[c0d3h4x0r]

Anyways OP's analogy is flawed, when is in a OS project everyone has equal say?

You accidentally stumbled upon the key issue.

Open-source projects are not democracies, but meritocracies. Participants who contribute better results naturally arise as leaders and therefore enjoy playing a larger role in decisions. The things a participant needs to do to move up the chain are perfectly aligned with the results the project needs to deliver to succeed. You don't get leaders who are more interested in their success than in the project's success, because they are one and the same.

Businesses are not meritocracies. People get hired, promoted, and fired based largely on factors that have nothing to do with the results they've contributed. The things an employee needs to do to move up the chain are almost never aligned with the results the business needs to deliver to succeed. You get tons of middle-managers and even CEOs who are more interested in their own success than in the company's success. Not only do those definitions of success not align, but they almost always directly conflict. (See Enron)

This is why so many businesses ultimately fall apart. They increasingly spin their wheels (while increasing numbers of employees jockey competitively for position) while producing lackluster results. (See Microsoft)

This is also why so many open-source projects keep improving despite inner turbulence and leadership changes. Any changes or competition that occur are motivated not by self-interest, but by interest in the success of the project. Therefore, any changes that occur always result in a better (not worse) alignment with the results the project needs to succeed. (See XFree86 -> X.org transition)

Re:Use OS as byline.. free pass..

[dubl-u]

If you're asking for an organiztion where everyone has "equal" say that's just running for disaster.

It works for me!

I'm in two organizations that have no formal power structure and work by consensus.

I've also been involved in a few different startups that, although they had a formal power structure, almost never used it.

if everyone can go on willy nilly and do whatever they want, then what's to ensure something or heck anything get's done.

If everybody there is for the same purpose, then everybody ensures that it gets done. When you work by yourself, who ensures that stuff gets done? You do. With a consensus-based model, it's just like that, except with more people.

There is a solution...

[Victor Fors]

And it's called forking. If an open-source organization makes bad (to the public) decisions regarding the developement of it's software, and said software is open source (but not nessecarily free as in beer), someone will (if the product is important enough) fork it and develop a free version, which (if the free version is superior) will outcompete the commercial product, or simply develop a superior product from scratch. Simple. (As long as you don't take into account the fact that some people might want to make a living off the developement effort, of course.) And no Linux-failing-to-outcompete-MS flames. MS is an aggressive hoarding monopolistic organization that shouldn't exist in it's current form in the marketplace, in my opinion. And the EUs, apparently.

It's called a co-op

[qbzzt]

This form of an employee owned and managed business is called a worker's cooperative http://en.wikipedia.org/wiki/Worker_cooperative. It's a pretty old idea, which has its advantages and disadvantages.

Many open source projects work because of

1. A charismatic leader, such as Linus.

2. The fact that if said leader misbehaves it's easy for even a small group of competent programmers to fork the project. This forces leaders to strive for consensus.

#1 can happen in a co-op (or a regular business). #2 is a lot harder in a business.

Re:It's called a co-op

[foniksonik]

Hmmm actually if the knowledge and rights to the product of a business were jointly owned by all members of the company then #2 should be a possibility.

There are many companies where the employees could 'fork' and start up their own competing company if leadership misbehaves... in small companies this tends to happen already.

The barrier for this is of course things like patents, copyright, etc. where the product and IP are owned by the leadership via a trustee relationship and so the employees can not just simply split with them and start their own enterprise... they'd have nothing to sell.

Re:It's called a co-op

[qbzzt]

If the assets of the business are all intellectual, then this would work. Source code, etc. can be forked (so can patents using non exclusive licenses). However, most businesses have other assets that aren't so easy to fork: physical assets, contracts, reputation, etc.

Employee Owned Corporation

[xplenumx]

I was under the impression that 'open source' meant that the code was freely available - not that the project had no leader or organizational structure. What I think you're dancing around though is the concept of an employee owned company - where, in theory, the employees become the 'merciless shareholders.

Re:Employee Owned Corporation

[SkeptAck]

Kinda sorta maybe. I got the impression it was sorta like an employee-owned-business and kinda like a co-op, but mostly like a web page with an email address on it. First thought is that with no one "in charge", the ones who work the most will decide what gets worked on the most, at which point they ought to just dump everyone else and go into business.

Re:hahahahaha - im going to get involved then fork

[LiquidCoooled]

Actually, I just read the source code, I don't want to get involved with this guy:


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Isn't metadata annoying....

I doubt it

[dazilla]

Strangely enough, we tried this type of concept in running our WoW guild. It was nice at first, but as we increased in visibility, we needed people to take on specific roles, and be able to make snap decisions without consulting others. A hierarchical power structure ended up materializing despite our best efforts to keep it decentralized. Also, when we tried decision-making by polling everyone on every single issue, the decisions would take insanely long to determine. In the end, while in a perfect world an "Open-Source Business" should be implementable, I would need major convincing to believe that it could be done and maintained in our world.

Re:I doubt it

[dubl-u]

A hierarchical power structure ended up materializing despite our best efforts to keep it decentralized. Also, when we tried decision-making by polling everyone on every single issue, the decisions would take insanely long to determine.

For the co-ops I'm involved in, we have roles but no hierarchy. One, for example, is a bandwidth cooperative. One person calculates bandwidth usage every month. Another sends out bills based on that. A third collects the money, and a fourth bugs people who haven't yet paid. Others manage the firewall, run the mailing list, organize the wiki, sign up new users, and so on.

Generally, people in the roles just keep doing their thing as they see fit, and others will follow their lead. If there's some issue, we discuss it. We generally don't do polling; in five years, I can think of only two or three formal votes.

Wars aren't won by armies praticing democracy...

[Silicon_Knight]

Obligatory Movie Quotes:

"Business is War" - Rising Sun
- and -
"We are here to preserve democracy, not to pratice it" - Crimson Tide

I've had some pretty shitty bosses in my career, and I'm now in the process of starting my own companies. One's bringing money in, the other will get there soon.

This is my comment(s):

In my current 9-5 job, whenever the democratic approach, people tend to debate things over until there's nothing left to be debated. Everyone in an organization fullfills different tasks, have different qualifications and skillsets as a result. If you were to run an org with true democracy, NOTHING will get done. You would have to A) make sure that EVERYONE understands WTF that they are voting on, B) you'd get so many different variants of ideas and sorting them through and then doing voting would be a nightmare, and C) there won't be any time left over from voting and hearing everyone's ideas.

What works best is soliciting a few ideas (have ideas bubble up to the top) then discussing a select few ideas that made it, and then having a decision made. A good leader would also justify why that decision is made (ie, I think this has merit, I"m aware of options X, Y and Z, but I'm chosing option D because of blah blah blah) and a good team should learn to stand behind the leader's decision. This of course goes both ways and assume a competant leader (which my current 9-5 job lacks, hence me heading off and starting my own business in the other 8 hours a day).

- SK

New Business Model

[kawabago]

What you are proposing is called chaos. Any organization needs structure to function. People need to know where their place is and what they should be doing.

Equal say?

[MMC Monster]

Open source doesn't mean equal say in anything. I certainly don't have equal say with the kernel developers over what's going into the next version of linux, for example.

Re:Equal say?

[Bing Tsher E]

You have 'say' that is equivalent to your contribution to the project, however.

You respond that you still don't have any say? Hmm...

In a word, no.

[Pharmboy]

What you are describing is a way that businesses might *start* out, with VC money, but eventually, everyone needs to make money. Google found a way, RedHat is finding a way, SuSe is finding a way, but they are no longer "equal" once they start making a profit.

I *do* think there is a lot to learn from the system, however. Where I work (not computer related, luxury good sales) there is no hierarchy at all. Everyone is on the same level. I *ask* to get things done, I can't order anyone. Everyone either is a team player, or they just can't work there. Most of the time, it works pretty good (but sometimes badly). Everyone *is* paid differently, ranging from 24k to over 100k, but more money doesn't mean more control or power.

This has worked for many years with 5, 10 and 15 employees but we are having great difficulty getting it to scale. The problem is that the more complicated the tasks and the bigger the organization, the more "rules" you do need. Not just rules, but procedures, and enough layers that if a line employee can't make the call, it doesn't require the owner to make the decision.

The Open Source method is probably the best way to develop software that I can think of (a blend of top down management and communism, with one or two benevolent dictators). The key is to either have someone finance it until it becomes a "real corporation", have it sponsored by someone big enough to gain from it, like IBM, or keep the project small and non-profit forever.

So I think it has it's purpose, it is useful, it is rich in diversity, but I can't see how trying to run a business with these methods will every produce a large corporation, even RedHat sized. And that means no high paying jobs.

It's a co-op, or even communism

[Chris Graham]

This "article" is 40 years too late.

You can't run a progressive business via commitee - there has to be management vision and clear direction. Even with collaborative software projects, the popular ones have some kind of management layered over them before the masses get what they come for - Wikipedia, Linux, Debian - whilst collaborative, they're all at the top level controlled by a small group of people. I'd be interested if someone could name one truly popular, non-trivial, and actively developed Open Source product that has no leadership of some kind.

Re:It's a co-op, or even communism

[dubl-u]

there has to be management vision and clear direction [...] some kind of management [...] name one truly popular, non-trivial, and actively developed Open Source product that has no leadership of some kind.

You're conflating leadership and management.

Imagine you're out drinking with a half-dozen friends. It's about time for dinner, so people throw out some ideas. One person says, "From what people are saying, it sounds like X would be a good choice. That sounds great to me. Any objections?" That person is demonstrating leadership, even though they aren't managing anything.

The distinction is crucial in open source projects. Linus may lead the Linux kernel efforts, but he doesn't have much real power. He can't fire people if they don't do what he wants, and anybody can fork at any time. He's a leader, but not a manager. This is why so many businesses have a hard time understanding open source: they are used to managing rather than leading.

Have you ever been involved in FOSS?

[Anonymous Coward]

Even FOSS projects have leaders, many of which consider themselves benevolent. :)

The second in command is the one that builds trust with, and provides value to the leader.

This sounds a lot like the way capitalistic organizations are supposed to work.

Even if it doesn't exactly work out that way in the "end" for every company, most companies were like that before they became big bloated dinosaurs that were more interested in their own internal structure than their products and customers.

FOSS will change many things in business, but primarily the way software is licensed. Ultimately companies will give their software away for free, after they figure out that any sufficiently motivated individual would be able to copy or pirate their software, and any company is more interested in the supportability ($$$) of the software than the initial cost.

This is why M$ and everyone else is interested in software-as-a-service. 'cause that's what it is. A software package has no value to a (smart) business, if that software package isn't providing updates, either to prevent attacks, or to work with newer software/hardware.

The unpredictable part is only what will happen when all this software is free, and all of humanity has it at it's disposal to further innovate!

Re:hahahahaha - im going to get involved then fork

[Anonymous Coward]

<meta name=ProgId content=Word.Document>
<meta name=Generator content="Microsoft Word 11">
<meta name=Originator content="Microsoft Word 11">

It'd be too big of a shift.

[ErichTheRed]

A few businesses could work something like this...rural electric and farm cooperatives, for instance. The problem is, once you grow beyond a certain size, you do need some sort of leadership to make the tough decisions.

It's a classic catch-22. If no one is in power, nothing gets decided. If the leaders rule with an iron fist and absolutely refuse to listen to the underlings, they can run the business into the ground. I think the best compromise is to keep businesses small. I've worked mainly for very large corporations, some of which are very old banks and insurance companies. When you get into the thousands of employees, the organization takes on a life of its own. Too much time and money is wasted playing political games. I've seen millions of bucks flushed down the toilet on useless projects designed specifically to fail so a particular VP can look bad.

Plus, doing this across the board would probably grind the economy to a halt. It's incredible how much of peoples' retirement money is tied up in the stock market. Suddenly taking away the pressure to make the numbers every quarter would really screw up the financial services sector.

Family

[Saint Stephen]

When I think about possible economic and resource sharing agreements between monkeys, and I hear about all the capitalism, communism, and all the other isms, it strikes me that we actually have a truly different resource sharing agreement structure -- the family unit. You don't bill your son/daughter/wife/husband for the food you dole out to them.

The hippies tried to replicate the family structure -- and that didn't work. The communists tried to do what families do -- and that didn't work. Churches try to replicate the family structure -- and everyone can plainly agree that that's not exactly the way a family works -- churches try to impose a pseudo-family structure on top of the existing family structure, and rely heavily on government favoritism for their economic underpinnings.

What would be really interesting if some sort of large scale structure could have the qualities of sharing that families assume -- but without the icky kum-bay-yahness of the hippies or the stupidity of the communists, or any of the other freaky not-family things that we end up with.

Re:Family

[frostoftheblack]

We already have a family. I usually listen to Big Brother most of all.

Try running a "normal" business first

[Infonaut]

I'm not saying this to be snarky. If you haven't already been involved in starting a business with three or more people, do that first. I think it will provide a lot of insight into why it is very difficult to make distributed decisionmaking work in a for profit environment. I'm not saying that it can't be done, but there are reasons why such entities have not risen to the top of the economic heap.

Re:Try running a "normal" business first

[An Onerous Coward]

Your answer reminds me of the standard Dilbertesque logic: "If this proposal is a good idea, why aren't our competitors doing it?" There are lots of reasons for the existence of heirarchal business organizations, many of which have nothing to do with economic efficiency. I think that many of the reasons for

While I would urge this guy to start small (and have a clear idea of what he wants to accomplish, which he seems to lack at the moment), I would also encourage him to start implementing his organizational ideas from the get-go. If he tries the normal business first, he'll probably lack the passion to make it succeed. Also, if he really believes that the standard business is doing things "the wrong way," then focusing his energies on that could end up teaching him all the wrong lessons. It's sometimes good to start out not being immersed in the current understanding of the impossible.

A.K.A.: Employee Buyout of a Corporation

[reporter]

The article at the top states, "...is there room for a new type of organization that throws away the archaic and monolithic organizational structure of today and from there form a company that has its direction dictated by all of the members that run it."

Such an organization already exists. It is an employee-owned company, which often becomes employee-owned through an employee buyout. There are numerous examples of employee-owned companies.

The most famous example is United Airlines. It operated as an employee-owned corporation from 1994 until 2002.

The lesson here is that sometimes employee-owned companies succeed. Sometimes, they fail. There is nothing magical about being open source or about being a company structured on the open-source process. Such software and such companies are subject to the whims of the marketplace and can succeed or fail -- as determined by the invisible hand of the free market.

its been done before.....

[gemada]

They called it anarcho-syndicalism http://en.wikipedia.org/wiki/Anarchosyndicalism and it was successfully done in Spain until the fascists crushed them during the spanish civil war. Also a variation was/is used in Israel on kibbutzes http://en.wikipedia.org/wiki/Kibbutz.

Re:its been done before.....

[shmlco]

Since you went there...

"While the kibbutzim lasted for several generations as utopian communities, most of today's kibbutzim are scarcely different from the capitalist enterprises and regular towns to which the kibbutzim were originally supposed to be alternatives."

Re:its been done before.....

[msouth]

"While the kibbutzim lasted for several generations as utopian communities, most of today's kibbutzim are scarcely different from the capitalist enterprises and regular towns to which the kibbutzim were originally supposed to be alternatives."

That's funny. Throw off the yoke of the capitalist pigs, become pigs yourselves. Reminds me of a book.

You're Describing Semco

[Rhett's Dad]

Check out Ricardo Semler's company in Brazil, named Semco. I read his book "The Seven Day Weekend", and it sounds like his business environment matches your description.

Sounds like a few pirate groups in colonial era

[Anonymous Coward]

What you have mentioned has been tried before with employee owned companies.

However a more basic and older form is like a FEW pirate groups during the colonial era.
Captain and first mate would get 2-3 shares of loot or vote each and everyone else would get an equal share/vote.
Major decisions would be voted on, while minor decisions retained ship command structure.

I believe existing business entity types could be used as a basis with company bylaws specifically dictating how major decisions and profit distribution is handled.

Cambrian House?

[Nrbelex]

Isn't that sorta the idea behind Cambrian House? "Within the crowdsourcing model, contributors to software projects earn royalties in the form of royalty points. If developed products are profitable, profit is shared among contributors based the contributor's share of the total royalty points."

Damn!!

[poind3xt3r]

"...as they can be useful"

*SIGH*

Yes, but you have to RTFM

[delirium of disorder]

As other posters have mentioned, cooperatives and collectives are one option for a more free business model; there are many others. You may be interested in Anarcho-Syndicalism. Syndicalists see labor unions as a force for revolutionary social change, replacing capitalism and the State with a new society democratically self-managed by workers. Millions of human hours have been spent thinking about and articulating radically free economic paradigms. Your idea for an open source business is interesting, but doesn't go into much detail. You just say that it would be web based, have startup costs, and will go in whatever direction the workers want. It's not a bad idea, but if you and anyone who reads your "plan" are serious, then you should look at the history of nonhierarchical organizations and learn from the theories, failures, and successes of the past. After you develop stronger ideas about how to create democracy in the workplace, you should create a more concrete plan.

Re:Yes, but you have to RTFM

[shmlco]

While no one can discount the successes and progress early labor unions gained their workers, all too many of those unions became power structures in their own right, and are devoted primarily to maintaining that power base. Unfortunately, maintaining that power, and ensuring the collection of "dues", requires that they continue to justify their existence, usually in the form of demanding ever higher saleries and benefits for their members.

The problem, of course, is that you can only vote yourselves bread and circuses for so long.

As to "Anarcho-Syndicalism", well, let me quote: "They should not have bosses or "business agents"; rather, the workers should [sic] be able to make all the decisions that affect them themselves."

Enough said.

Re:Yes, but you have to RTFM

[farlane]

You mean it's not enough to just wave your hands and say "open source 2.0"? There goes the business plan...

Good point that there's plenty of "new" economic and social organization material just waiting to be run through modern filters.

I'm liking the pirate democracy idea, Chris. Are there krakens in that model?

Name an open source project run this way

[clymere]

It says something that the most succesful open source projects tend to be run on a model almost identical to a typical corporation. I believe Linus refers to it as the "benevolent dictator" model.

What the poster is describing is nothing less than mob rule. Theres a certain amount of this to all open source projects, but you'll find almost all have a small group of people ultimately making the decision about what direction to take. And of course if they make enough bad decisions, a portion of their developers can always create a fork

If anything, its the pirate form of democracy. Everyone gets their say, the captain makes the final decision, and if makes enough bad ones, they vote in a new captain.

Re:Name an open source project run this way

[babbling]

One big difference is that Free Software developers have a lot more freedom to speak their mind. Whilst one person might make the decisions, discussions can take place that would never be able to take place in a company where people have to be afraid of losing their job.

Re:Name an open source project run this way

[bergie]

At least Apache Software Foundation and the Midgard Project have a decision making process where specifications and major changes are voted about by all committers (i.e. stakeholders in the project).

Re:Name an open source project run this way

[kz45]

"It says something that the most succesful open source projects tend to be run on a model almost identical to a typical corporation. I believe Linus refers to it as the "benevolent dictator" model. "

I think it has more to do with the fact that there are only a few people involved in open source projects that actually have the skills, time, or interest to make major updates and keep the project going. The other 99% are just users or they make changes that aren't good enough to be considered for the next release.

There is a reason companies work in the way that they do. We have realized over many years that not everyone wants to be a leader (which is just human nature). Most people need to be led and told what to do.

The most successful open source projects mimic a standard company.

Re:Name an open source project run this way

[dubl-u]

It says something that the most succesful open source projects tend to be run on a model almost identical to a typical corporation. I believe Linus refers to it as the "benevolent dictator" model.

You are entirely wrong here.

For the full scoop, read Karl Fogel's Producing Open Source Software, which details the differences. But two key ones:

• Open source project leaders can't order anybody to do anything
• Open source project workers can fork at any time if they disagree with the direction of the project

This changes the power dynamic completely from a typical corporation, and a different power dynamic means different behaviors and different organizations. If there's a close paralle in the business world, it's either a network of small businesses, or perhaps something like Semco or Origin.

Worse. Utopianism.

[smalloy]

n/t

Perhaps a modular/component approach?

[Eye-of-Modok]

I think it could work if each role was identified and taken on by individuals or small entities in a sort of modular matrix. This structure works well on the Internet through partnerships. Many people have found ways to diversify their revenue streams through partnerships that have led to increased profits for both partners. The key is to add value at each stage, which requires specialization. As the network grows, anyone who isn't holding their weight is not likely to survive. This approach relies less on a strong central vision than organic growth. However, the strongest growth will likely occur as a result of a merging of individual visions in a symbiotic fashion. A friend of mine grew a thriving Internet travel agency through a series of partnerships. Each time a new vendor would come online, his sales would jump. The partner, in turn, was thrilled to able to offer his services. Both happy. Both gaining.

You could apply this approach to non-Internet related businesses, but you'd still need to use technology to your advantage. Logistics can certainly be a big issue. Decision-making would occur between stakeholders hacking away at what works. The larger the group affected and the higher the stakes, the more arduous the process.

There isn't any way to do away with leadership. The smaller the group, the more equal each "module" will be. Larger dynamics demand that a fit leader step up to make things work. People latch on to a leader with charisma and vision and are willing to work hard because they share that vision. There is nothing wrong with that at all. The key is to choose to work for a vision with which you are comfortable, rather than electing to be a high-paid wage slave for a company you don't believe in.

OS Business Plan vs OS Execution

[grondak]

Business Plans improve (mostly) with extra folks.

Execution fails (mostly, the coop post contains great counter-examples) with extra folks.

Perhaps the sufficient part of this OS Business concept should be the businss idea and plan itself. We could work out a sustainable business model that would allow for differentiation in services/products or price, and so on.

An example of a market that can sustain this level of competition is health care. Differentiation in that sector invites regulatory scruntiny. So how come there is so much competition? Is there really enough success to support the number of hospitals we have in the US? Must be, because the sector requires additional staffers!

So while running a company "out in the open" may not be good for its future, an open source business plan with closed execution might be the corporate equivalent to a "secure" encryption algorithm with a strong key.

Thoughts?

I will uncover my secret plan then...

[pitu]

problem: provide fair services for a fair price & fair wages

in brief you must beat the system from within...

you must already be a big corp & have at least 51% of the shares which means that you have been behaving like an
evil, only profit oriented corp until that moment. You decide the next day that you need a drop in the price enough to:

    - keep R&D going along
    - keep decent salaries
    - keep beeing competitive (marketing & stuff)
  and you CUT the extra profits (meaning no or largely less extra surplus at the end of the year & no dividende for the shareholders)

  You open up & publish your bussines strategy = best & cheapest service with no extra profits = clients pay only the real cost of the product. You open your real expenses and challenge the market for better offers. Open Source? Well, your functioning is transparent & open, you let anyone with a better idea/offer than you rather join you than try to defeat you.

  This way, the clients get a fair product for a fair value. No employee is exploited but (is) a service to the people beeing (decently) pâid at the same time.

  No (extra profit, dividende oriented company) can be competitive to your cheapest products. you win they loose, you take over. Replicate this to an other sector

  Gain? If your (ex) shareholders don't kill you in time you will have just the moral satisfaction to make something like this functioning to the overwhelming gratitude of your numerous users/clients.

  Equality in decisions? It never existed & it never should. Just let people do what they're good at.

Re:I will uncover my secret plan then...

[amliebsch]

This is already what happens in competitive markets. Marginal profits approach zero as competing companies try to increase sales by reducing prices. Companies may gain advantages through proprietary product features or cost-saving messages, but these are almost always very temporary conditions and eventually show up in lower prices. Where you don't see this (e.g., Microsoft), it is usually because of a regulated market or lack of competitors (for whatever reason).

That'a not how Open Source works

[Marcos Eliziario]

Open Source projects are not based on everybody deciding about everything. They are based on merit. All decisions are done by a handfull of people that proved that they have the skills to do the best decisions. Of course, all of it depends on the project creator(s) being able to share his power and being able to understand which contributors should have a say for the well being of the project. Not much different from a healthy "closed-source" company. And as much as there are unhealthy "closed-source" companies (and there's a lot of degrees between healthy/unhealthy) there is also a lot of Open Source projects with pointy-headed bosses, with the added anti-bonus that those pointy-headed bosses think they are Alice.

Re:A.K.A.: Employee Buyout of a Corporation

[Anonymous Coward]

Or by the billions in micros~1's bank accounts. You kids and your "invisible hand of the market." Grow up, there's no such thing.

Keep dreaming

[supabeast!]

"There isn't any limit on how many people can be involved (the more the better, in fact) as long as they can be useful. Could this be the way of the future?"

It's not too likely. One reason that corporations in the US and similar economies operate the way they do is that the law structures companies to operate that way at least shareholder held companies - companies that are owned by an individual can operate in all sorts of ways. Of course, you always have the option of forming one of these theoretical "open-source businesses" in a nation that's more friendly to what you propose - France, Italy, or any of the socialist nations of Northern Europe.

Patent Pending

[Mr.Bananas]

Open Source Business. That's a pretty novel idea for a business model. Maybe you should patent it.

Google for...

[aero6dof]

Employee owned company

The largest publicly traded one I know of offhand is SAIC (http://www.saic.com/empown/)

Open Source works when subsidized

[AHumbleOpinion]

... a company that has its direction dictated by all of the members that run it ...

Open Source works because it is usually subsidized. Volunteers donating their time, academics who have the freedom to work on what interests them, corporations who sponsor some project, etc. If you can find someone to subsidize your open source firm them you might be successful. Otherwise you will most likely fail like any other poorly run firm. Your post suggest that you do not realize that investors and bosses are roles that have developed, evolved, over time because that has proven successful. Business can be a pretty darwinian process.

You need someone to put up the money for a firm, and since it is their money at risk they get to make the decisions. These investors often need help, they hire workers. Workers may or may not share the vision or plan of the investors so bosses are needed to make sure the workers are implementing the correct vision or plan rather than whatever their pet plan or preferrence is. Occasionally workers have a better plan or vision and bosses pass this up to investors and the plan changes. Usually the workes plan is inferior, this is not necessarily self-delusion it may simply be that the worker is unaware of various complications or parallel goals that are not part of their daily experience and knowledge. In this later case this where bosses use authority to make sure workers are working on the correct thing. Oddly enough, bosses are also desired by workers. Whenever there is a group of workers someone will slack off, the non-slackers want good bosses to make sure everyone pulls their own weight (in the right direction too).

An open source firm with too much freedom, too many decision makers, few with authority will just be inefficient and lose to better and more traditionally run firms. Can you get a bunch of volunteers that share a vision, works on the common goal not a personal agenda, contains no slackers? Sure, but not likely. This is why so many open source project die, open source projects probably have a greater mortality rate than new businesses. It's all about a clearly defined shared goal and proper management and incentives. The corporations have an advantage, well, as I said before, unless the open source firm is subsidized.

Re:Open Source works when subsidized

[einhverfr]

Open Source works because it is usually subsidized. Volunteers donating their time, academics who have the freedom to work on what interests them, corporations who sponsor some project, etc. If you can find someone to subsidize your open source firm them you might be successful. Otherwise you will most likely fail like any other poorly run firm. Your post suggest that you do not realize that investors and bosses are roles that have developed, evolved, over time because that has proven successful. Business can be a pretty darwinian process.


Yea, lets get people to pay us money for the privilege of wearing our advertising logos on their shirts. Like that will ever work.

Subsidies occur in many forms, and many successful businesses find some way to get some sort of subsidies in order to become more successful. It is not limited to open source software.

Re:Open Source works when subsidized

[An Onerous Coward]

Open source software doesn't work because of subsidies. Everyone who contributes to a software project does so because they feel that the benefits outweigh the costs, whether those benefits come in the form of intellectual pleasure, geek cred, or (increasingly common) direct financial contributions by those who stand to benefit from the software. Open source works because the marginal costs of reproducing software is zero, and because there is a large community of people who enjoy developing software.

You argue that the current style of business organization has developed and thrived because the efficient have driven out the inefficient. I would argue that it's because of self-reinforcement: those who start with more power tend to be able to maintain and reinforce that power in ways that the powerless cannot. The system you describe isn't about ensuring that a business is necessarily as efficient as possible, but about ensuring that as much benefit as possible accrues to those who own it. If this requires causing great human suffering to the workers to get a small increase in the amount of capital controlled by the owners, what stops the owners from playing that negative-sum game?

Traditionally, the answer has been "labor." But those who side with owners point out that labor can get overly demanding, become corrupt, stop listening to its members, and a whole host of other ills. To the extent that it's true, I would say it's because labor has the same motivations as owners: to get as much for themselves as possible, while offering as little as possible in return. Labor cares more about its workers than about the company's profitability, and labor organizers care more about themselves than the people they represent. That's not surprising, and I think that more transparent practices by both sides could help, but the fundamentally antagonistic relationship would remain.

But when the workers are also the owners (the sort of system Ted is describing) that antagonistic relationship disappears. The hope is that it is replaced by something where both managers and workers can feel more loyalty to the organization itself, rather than something to be fought over in order to direct as much of its profitability into a given pocket. Because the benefits of any gain in productivity are spread widely, few people have strong incentives to fight real improvements.

You seem to be of the opinion that laborers, left to themselves, would stumble around mired in their own lazy inefficiency. Therefore, they need management to help them overcome the vices inherent in their lower-class nature. I think that attitude is both paternalistic and ignoring where people's self-interest would really lie in such a system. Slackers would be less of a problem, because there is more incentive for "owner-workers" to keep each other in line than there is for "owned-workers." If you're working for a company you hate and whose performance doesn't seem to affect your bottom line, and you discover your co-worker has found a clever way to slack without getting caught, you're less likely to pressure him to stop, and more likely to join him in his slackery. If you work in a position where you know things could be done more efficiently, but reporting the inefficiency will either be ignored or lead to the elimination of half your department, what is your incentive for coming up with a better solution?

The information flow also fails to flow in the other direction. You say that workers will invariably make stupid decisions because they don't see the whole picture. But this is at least partly by the design of the owners. Information is power, and so long as the goal is to maintain as much power over workers as possible, information will only be shared when management thinks it will help them. Giving the employees a deep understanding of the company's workings is risky, because they are the enemy and will treat you as such.

It's hogwash to claim that traditional companies are necessarily more efficient. The easiest way to make your workers productive is to convince them that it is in their interests to do things that benefit the company. The easiest way to convince them of that is to make it true, by giving them a share of the company.

Re:Open Source works when subsidized

[AHumbleOpinion]

Open source software doesn't work because of subsidies. Everyone who contributes to a software project does so because they feel that the benefits outweigh the costs, whether those benefits come in the form of intellectual pleasure, geek cred, or (increasingly common) direct financial contributions by those who stand to benefit from the software. Open source works because the marginal costs of reproducing software is zero, and because there is a large community of people who enjoy developing software.

As I said one form of subsidy is someone who volunteers their efforts. You merely explain why they subsidize a project with their time. "Benefit outweighs cost", duh, did you think that IBM subsidizes Linux out their generosity? ;-)

You argue that the current style of business organization has developed and thrived because the efficient have driven out the inefficient. I would argue that it's because of self-reinforcement: those who start with more power tend to be able to maintain and reinforce that power in ways that the powerless cannot.

You could argue that but you would be wrong. New more efficient businesses drive out old more powerful businesses, disruptive technologies drive out old businesses at are base upon power rather than efficience, ... Investors are always looking for an inefficiently run firm, they are great sources of opportunity. Buy it and clean it up or instroduct a new firm in that market.

But when the workers are also the owners (the sort of system Ted is describing) that antagonistic relationship disappears. The hope is that it is replaced by something where both managers and workers can feel more loyalty to the organization itself, rather than something to be fought over in order to direct as much of its profitability into a given pocket. Because the benefits of any gain in productivity are spread widely, few people have strong incentives to fight real improvements.

Untrue in the sense that workers need to be owners. Incentives are all about getting a workers motivations in line with the firm's goals. One way to do that is to reward for performance and results. This is one of the reasons that workers like strong but fair bosses, it eliminates the slackers who reduce the bonuses. Slackers are always a problem, regardless of whether the firm is investor and employee owned. Southwest Airlines has been studied a bit with respect to successful employee owned firms, it is fun reading.

You seem to be of the opinion that laborers, left to themselves, would stumble around mired in their own lazy inefficiency. Therefore, they need management to help them overcome the vices inherent in their lower-class nature. I think that attitude is both paternalistic ...

I would use harsher language than that is someone had presented such an opinion. No one has certainly not I, you are reading/inserting things that are not there. It has nothing to do with class or education, it has everything to do with perspective. A worker's perspective is limited, often myopic, as upper management's perspective is often to broad or shallow. When I refer to workers sometimes being delusional when they think they have a better idea it has nothing to do with their intelligence, it has to do with what information they have available at the time. That broader but shallower perspective of upper management might indicate something more important that what the worker is fixated upon.

... and ignoring where people's self-interest would really lie in such a system. Slackers would be less of a problem, because there is more incentive for "owner-workers" to keep each other in line than there is for "owned-workers."

Workers have solved the slacker problem via bosses. Or are you suggesting vigilante-like actions? In any case, without someone in authority to make a judegement call the firm will be inefficient. "Those who don't understand bosses are do

Seems to be working for Semco

[DeathBunny]

Despite the (inevitable) flood of naysayer in this thread who will of course say that's impossible for a company to run without the expected overpaid stuffed shirt figureheads, there is in fact at least one very successful example of a democratically run company. The company is called Semco.

You can read an interview with the man responsible for the companies transformation (Ricardo Semler) on CNN here: http://ask.slashdot.org/comments.pl?threshold=1&mo de=nested&commentsort=3&sid=193884&op=Reply

Or amazon has a couple of books written by Mr. Semler.

Nice idea... now try it

[mfriedma]

It sounds like a wonderful idea.

As an initial dry run, let me suggest that you get together with 15 of your closest friends and see how long it takes to decide where to have lunch.

I predict one of two results:

1. One or two strong personalities take over and make a decision, or

2. You take longer deciding where to eat lunch than actually eating lunch.

In contrast, in my company (which I happen to be the boss of) I decide where to have our weekly lunch. It therefore takes 30 seconds. Other people get input - they tell me what they like and don't like - but since I'm picking up the check I decide.

Seems to work OK.

Now imagine your happy little company making a hiring decision. Worse yet, a firing decision. Cringing yet?

OSS succeeds by hierarchy or by fork

[PinkPanther]

Most successful OSS projects have gotten there not by "everyone having an equal voice" but by a few dedicated individuals directing the efforts of themselves first, of the "community" next. So this approach to success doesn't map onto the OP's concept of an "open source business".

The other winning OSS strategy is the "fork". When a project is not moving the way that another group within the "community" wants, then they fork it. This new fork competes and most likely will succeed if its (small) group of dedicated individuals are more focused (and/or smarter) than the parent's group of individuals.

The bazaar approach to OSS doesn't exist. Or, if it does, it is mostly in the role of feedback (bug reports/complaints/flames).

You will have a difficult time finding 10 people of similar skillsets, dedication and desires to be able to have this business affectively float with all having "equal say".

Why is Open Source a business model?

[Zadaz]

Just because orange juice is good at slaking my thirst doesn't make it a good choice for engine coolant. Or blood.

Having too many people involved in decisions is the best way for a company to kill its self. When you say "There isn't any limit on how many people can be involved (the more the better, in fact)" you destroy yourself. The more people you have, the more input that needs to be processed, and you quickly reach the Productivity Event Horizon where no one can do any work because they're constantly thinking about someone else's job. The larger the company, the less likely any one has knowledge to make an informed decision in another part. Yet they'll feel the need to chip in anyway because it's still "their" project.

I'm generally a much bigger fan of Motion Picture development style. Pay everyone really well to do what they do really well. Gaffers gaff, costumers costume, actors act, and when its done, everyone goes their own way. Cost effective, well trained and motivated people and high quality output. (technical quality. Very rarely seem boom mikes in shots any more.) It does take a leader with a vision to tell these people where to start though. And that's something your business model lacks.

Hiring a person into this environment who won't screw it up will be a bitch. And that's a bitch on top of regular hiring. How to bring someone in who's a restrained team player, highly self motivated (there's no promotions) skilled, and willing to work in your experiment.

When your only objection to "business as usual" is the "sole profit of a board of directors and merciless shareholders" you're probably better off just having a very liberal profit sharing program and that's it.

But hey, please prove me wrong, I like surprises.

This makes FP?

[jtrask]

Open source philosophy made some good software. Therefore it's probably the best way to do everything, even if there's really no way to apply the metaphor (open source books makes sense, so probably we should have open source cars, too, why not?) Coops, businesses that encourage the voice of people farther down the line, these are all viable and good ideas. No matter how hard you try, though, if you're starting with the square peg of open source, rather than starting with a business, you aren't going to make it through the round hole of business. I'm glad I switched to Digg, where someone posing a question with an ex-buzzword in it doesn't make FP.

Been there, loved it!

[Zzyzygy]

Take heart, companies like you are describing do exist, though they are a rare find. I had the privilege and pleasure of working for one for the past four years. It's a cryin' shame they went out of business last year due to crappy post-merger management.

At the risk of sounding altruistic, it was a real kickass job being able to work on FOSS, giving something back to said community, and getting paid for it in the process.

Of course, it helps if your boss also supports open source. :-)

-Scott

The Take - recommended movie

[rafadev]

I recommend you watching the movie "The Take" by Naomi Klein (http://www.thetake.org/). It was filmed in my homeland, Argentina, and it is about the "recovered" factories in my country.
When some factories went broke their employees decided to take the factories and run them by themselves, in a cooperative fashion.
Some factories of this sort have now legally obtained the rights to actually own the factories, in change for some debt the companies had with them, and are actually very successful businesses.
Hope you like it... I really recommend it

Paging Bruce Sterling

[cmholm]

One method for breaking down the formal hierarchy is to decentralize. Bruce Sterling gives an example in Islands In The Net. For a more socialistic example, the 'Aztlan/El Paso' chapter in Strieber and Kunetka's Warday.

A current example is the content production end of the US film industry, where a number of nominally independent contractors pull together to create a film, then break after the wrap, until someone pulls them together for another project. Granted, the components aren't equal (ie. the producer, and the massive corporation that's gonna distribute the product), but it's a starting point you can tweak to your own purposes.

Sure you can

[It's Atomic]

reach a state of Eutopia. Just be an ant, or something lower than human with all its desires and foibles. (Closed source developer working for himself.)

Management by consensus

[cdrguru]

If you have never worked for someone that believed in this, you are excused. It is truely a revelation. This isn't what the original question is asking, but it is close enough to be scary.

In a management by concensus environment, you sit everyone down for decisions and everyone gets to have their say. Until everyone agrees on a direction, nothing is decided. If a concensus cannot be reached, it must mean that the whole direction is wrong, so you move up a level and look at earlier higher-level decisions.

A sure sign that you are operating in a management by concensus environment is where the basic strategy of the company is brought up to all employees as "are we on the right track here?" This has the effect of generally alienating everyone because they wonder what the heck they have been doing for the last six months if there isn't a commitment to a direction. It also means that the rug gets yanked out from under everyone periodically.

It doesn't work. It was a nice idea, but it cannot be made to work. Committees never decide anything as a whole - a leader always emerges or is established from the beginning.

recuperadas

[zogger]

google that term. It just so happens I ran across that the other day doing an article for Technocrat and thought it was pretty neat. That's what workers are doing in argentina after various international economic schemes and scams blew their economy out. The courts there let them take over abandoned factories in various ways to see if the workers could make a go of it after the owners gave up and went bankrupt. It's exactly what you are looking for as for organizational structure.

Uberparent = Baiting Troll

[MSTCrow5429]

"In a world where people slave away for the sole profit of a board of directors and merciless shareholders..."

Uber-parent, downmod, flamebait.

I serve on a church vestry.

[Medieval_Thinker]

I am the Sr. Warden of my Episcopal Church. I think we do a better job of following an open source model than you might think. If someone wants to work with the Sunday School or rewrite the policies for the hourly employees, we have a process. That process is not a top-down business process. Our goal is to empower and support anyone who wants to contribute with some safety checks in there before it becomes policy. This seems similar to the way that open source projects are managed.

We are all volunteers after all and are doing this because we believe it is the right thing to do. Some of us contribute a lot, and others have pockets of influence/interest. Others just come on Sunday and are in receive mode instead of give.

It works...

They did it with Cola

[ManyLostPackets]

OpenCola anyone? http://en.wikipedia.org/wiki/OpenCola
Recipe on the side of the can, totally GPL'd. It was done to explain opensource to the public and wasn't meant as a serious venture, but they sold about 150,000 cans.

ThinkGeek used to sell it.

Look at envolution

[Schraegstrichpunkt]

Have a look at the Envolution project. The company involved tried to conceal access to both source and binaries for GPL software behind a subscription fee. They're not doing business anymore.

I think there was an alternative firmware for the Linksys WRT54G that did more-or-less the same thing.

Motivating the Employees

[nightowl03d]

If a small tweak to the startup fee structure were made this could be quite lucrative for all us.

Right now there is a 25 euro signup fee that goes straight into the company coffers. That just doesn't make me feel motivated enough to go out and get the amount of new people to join the venture in order to make it succeed. Now with the following small tweak, we could reward people for signing up coworkers. We will start with a list of 7 unique people.

nightowl03d
nightowl
niteowl
notnightowl03d
not really nightowl03d
really not nightowl03d
nice nite owl who is not that mean old nightowl03d

Now suppose Dave Rhodes wishes to join our open source company. All he does is crosses off nightowl03d adds his name to the bottom, and sends in the 25 euros to the company.

nightowl, would be next in line. Nightowl03d gets 20 euros, and the company gets a 5 euro management fee, At the end of this iteration we would have the following list.

nightowl
niteowl
notnightowl03d
not really nightowl03d
really not nightowl03d
nice nite owl who is not that mean old nightowl03d
Dave Rhodes

So Dave would sign as many people up as he could, (possibly through bulletin boards), every person he signs up, gets to bump off nightowl, move dave up, and add their name to the bottom as follows...

niteowl
notnightowl03d
not really nightowl03d
really not nightowl03d
nice nite owl who is not nightowl03d
Dave Rhodes
Mark Garner

In no time at all Dave will be at the top of the list and making a good income. Hmm, this open source company thing could just work, just so long as people are honest and give proper credit to the people at the top of the list.

Disagree

[einhverfr]

Seems like the original question is largely describing WL Gore & Assoc. They work almost exactly this way. Go to gore.com some time and check them out.

Re:Disagree

[nelsonal]

How different is WL Gore from other intellectual property firms (not how they run their business which is unique, but their basic underlying business)? All sorts of organizational methods work when economic rents flow in unchecked by competition. Pirates used to operate their boats that way as well. Doesn't mean that it would work for say an oil tanker firm to have the crew vote on which charter to take.

The Flat team dream

[betasam]

Aside from Semco (Brazil), there aren't many companies that call themselves grassroots managed (the reverse of top-down management.) However, historically all startups during the bootstrap phase have used such a management system before melding into hierarchy-managed organisations. If Flat/Democratically managed organisations were "better" (more efficient in providing higher employee satisfaction, effective delivery of products/services) one would have noticed a good number of NGOs and small companies (think of the size of "id Software") already adopting such a model.

The truth is, there is a severe degree of biological hierarchy imposed upon human society. That prevents any model from becoming fully effective. Studyies of primates (can'c cite off-hand, but am sure there are papers backing this up) prove that there is an inherent hierarchy. Most mammals (particularly the predators) also indicate hierarchy and specialisation. Another good example would be wolves, pack hunters whose stragies are close to us. I've seen many people being seduced by the idea of a truly flat organisation, direct democracy within its limits. The trouble was they never studied why it "could" (and probably would) fail. That resulted in the failure of the model. To put it bluntly, why do you think the vast majority of organisations in the world are built on hierarchy?

MOD PARENT INFORMATIVE!

[Eli Gottlieb]

Oh, if I only had mod points! Parent is extremely Informative

But what color will the wheel be?

[soxos]

I agree with many of the above comments. I think it's a good idea on paper, but a business needs to have direction and leadership in order to steer it in some direction. Can you imagine a ship where the navigation was done via majority rule? It wouldn't work.

I wish the OP luck in his/her business and will gladly admit closed-mindedness should this succeed, however, I predict the business will either quickly move away from this model for core decisions or fail from inertia of having to come to a consensus.

Yeah, but...

[rickb928]

..TFA makes this assertion:

"In a world where people slave away for the sole profit of a board of directors and merciless shareholders"

Um, I work for a large, and very recognizable corporation, and I don't slave away for the sole profit of the board of directors nor merciless shareholders, or even an overpaid criminal CEO.

I get paid. And after my expenses are paid, I have a modest profit to show for my efforts. So do all of my coworkers, worldwide.

And most corporations function the same way.

would an open-source corporation function differently in this area?

But I can imagine an open-source consultancy. Common knowledge base, share the work, blah blah blah. Same formula lots of Big-Eights used. Served them well.

How would an open-source corporation handle compensation, In an open source way.

?

rick

Linux

[Millenniumman]

The Linux project, one of the more important OSS projects, is a "benevolent dictatorship". "An organization where everyone has an equal say in what goes on", indeed.

That bit about people slaving away for stockholder profits is also nonsense. Unless they are really dedicated, they are doing it for pay and/or their own satisfaction.

Business 101

[flyingfsck]

Hmmm, you mean a real open source business, like, RedHat, Debian, Novel, Mandriva, Linspire, Canonical - it is not like there aren't any real life examples out there - sigh...

Not entirely a new idea

[Captain Lobotomy]

Read "Ecotopia" by Ernest Callenbach. Carefully. Ignore the insipid embedded love story and concentrate on the socio-political ideas presented in the book. When you're done with it, go back and read it again. Then think of a world where all businesses are employee-owned.

Youre forgetting; we're animals

[Erixxxxx]

We are biological organisms. That means we do not expend more energy than we derive from the expense. No one works for free. Everyone working expects to profit.

Like others, Im not sure where you get the idea that open source means some kind of communal model. In all open source projects there are those who contribute more and thus have more say/control.

If you gaurentee that everyone will contribute the exact same amount, that everyone will have the exact same ability, then Ill gaurentee that everyone will have the exact same amount of control.

Even in the co-ops or employee owned companies or Quakers mentioned in many posts, there is a hierarchy. Im a big fan of decentralization, since there is no such thing as an adult human who knows whats best for another; but this complete-equal-say stuff is just so much juvenille utopianism.

And no, people dont work and slave at their jobs so investors make a profit; people work and slave at their jobs for their own profit. Of course you realize that any money you have left over after paying for the necessities of living to work another day is profit, right? You do realize that workers exploit the needs of a company just as much as companies exploit the needs of workers, right? You do realize that human behavior isnt motivated by morality or culture but by biology, right?

you don't ask for much

[Anonymous Coward]

An organization where everyone has an equal say in what goes on. There isn't any limit on how many people can be involved

Nope. Humans just can't work that way. Its nice in theory, but in practice too many chefs spoil the soup, and the whole company just sort of disintegrates.

Democracy is a nice ideal, but we have seen how it pans out in real life. Democratic companies are no different than democratic countries...they wind up being democratic only in appearance, and not in practice. EIther that, or they wind up being completely unfocused, random, and insane.

Who gets paid anyway?

[eliot1785]

One of the problems mentioned above is the difficulty of making decisions. But another problem is deciding who gets paid. If people can join and leave willy-nilly, how do you make sure that people who are working hard get paid for their work, and people who only join to get a share of the profits are thwarted? It is hard enough to deal with employee leeches in a real company (think of the perpetual spare employee who leeches off of everybody else). Having an "open source company" would be a nightmare for this reason.

Anyway, the analogy doesn't even work here, since you are talking about free collaboration in companies, whereas open source is more of an issue of free information and supposedly-beneficial consumer rights.

My notes from ITConversations.com

[guilhermesa]

I think the question is whether the business would benifit to open source, and then how much "open source" you want to make it - I think its utopian to have pure open source as a normal business model.

It's important to strictly define what your business is. Nike, presumably a running show manufacturer, does not make shoes - it only designs, distributes and markets them. Nike is primarily a service company. In this case, if Nike wanted to apply an open source model, it wouldn't do so with the manufacturing process (again, it outsources this phase), and certainly wouldn't want to open source its distribution and marketing processes. The design process is the only benificial area of Nike that could be "open source". So you can see how not much has been changed out of the entire company (only 33%), and yet it could have revolutionary outcomes. I think that's why open source is so cool. Of course, this is all theoretical, b/c if Nike did this, they would be positioning their product differently, and we don't know if they want this or not. Anyone cares to expand on this if it were to happen of another company doing it before Nike?

Below are some of my notes from ITConversations.com to help clarify what is pure open source.
Its very informative and strictly objective talk, with speakers focusing on the SOFTWARE industry and the pros/cons of open source.

sorry for typos

---------------

Source: ITC - OSBC 2005
Speaker: Larry Augustine

BIG QUESTION:
WHERE DO CORPORATIONS SPEND THEIR MONEY?
*Many industries, especially software development, spend more on sales and marketing than they do in development.
Where is the efficiency in the model? Its more about selling than creating?
In open source model, good users will come because the product is great

Its not about features, but about maintainance and support - features should be for free.

-----

Source: ITC - OSBC 2005
Speaker: Geoffrey Moore

open source movement is more like a services model than anything ever

OPEN SOURCE MAIN ROLE:
commoratize context processes so that people can extract their resources from context and repurpose them for core.
argument: function of open source is to essencially vacuum mission critical content off the table.

sharing is actually good for capitalism because you're not goint to be spending money on stuff that doesnt differenciate.

its about:
reducing risk, lowering cost
getting more productivity out of the services businesses

ORGANIZATION:
CENTRALIZE, STANDARDIZE, MODERNIZE, AUTOMATE, OUTSOURCE

Malvocks Hiarchy of Needs applied to Capitalism

Competition = Achievement
Self-Actualization = Cultivation Culture
Control = Order/Security
Collaboration = Affiliation

the two on top are about individual accountability (self or achievement) --- you're thinking about your personal self in relation to the world
on the lower ones (Affiliation/Order/Security) --- you're thinking about the group's relationship to the world

when u manage companies, the ones at the top holds individuals accountable for outcomes and companies at the bottom hold the team accountable for the outcomes
the companies on the right pays more attention Actuality - the numbers, did you make quota - the approach is to make things happen
the cultures on the left pays more attention to aspiration or possibilities (can do cultures as opposed to did do cultures)

open source is all about "you can let it happen"

with open source, the power has gone to the left side

How Open Source Suceeds:
-possibilities as opposed to actualities
-collaborative/active trust (u give before you receive)
-pacience (if you run out of t

Sole profit...

[El Royo]

In a world where people slave away for the sole profit of a board of directors and merciless shareholders...

Last time I checked people slaved away for a paycheck. Unless you pay more to get back and forth to your job, you're turning a profit.

Brazil is ahead of the rest of the world...

[Futurepower(R)]

As usual, Brazil is ahead of the rest of the world in social things. Ricardo Semler has been doing open source business for 20 years, as Chief Happiness Officer. Here's a review of his book, The Seven-Day Weekend: Changing the Way Work Works. Some people are extremely enthusiastic about Semler's ideas: He's my idol.

Normal CEO's are Chief Unhappiness Officers. They steal everything they can, and act out their anger toward everyone they can.

One of the most important examples of a business run in an adversarial way is Microsoft, of course. After all this time, major media outlets are starting to get it right. Here are quotes from the CNN article Microsoft security--no more second chances?:

"By now, Chertoff's people must be thoroughly frustrated that Microsoft still turns out poorly designed products."

"Here's something to consider: If bridge builders or airplane designers applied the same standards to their labors, do you believe that the public would so easily forgive the regularity with which bridges would collapse and airliners fall out of the sky?"

If you like the CNN article, don't forget to D I G G it.

Re:Brazil is ahead of the rest of the world...

[mrjb]

As usual, Brazil is ahead of the rest of the world in social things. By this comment, I'm assuming you live in Brazil. I've lived in several countries and find sometimes things can be seen more clearly from a distance. From my outsiders' point of view, Brazil doesn't look like it's ahead of the rest of the world, socially; with a flourishing market in bullet-proof cars, it looks like a bigger mess than I'd ever care to live in.

The Wrong Analogy?

[carpeweb]

The vast majority of posts seem to accept the premise that the application of open source to other (non-software?) businesses means a non-hierarchical, cooperative type of organization. Open source projects still have some command and control, although anyone (by definition) is free to "fork". And, before anyone flames me, I'm not saying open source projects are organized in the same fashion as large corporate bureaucracies.

But the non-software analogy of an open-source business or project would be one where the product or service had no patent protection and no proprietary intellectual capital. Think of open-source soda as being a business where the secret formula isn't secret, so people are free to experiment with different recipes until they find one that lots of people seem to like better.

Are generic drugs the right analogy? I guess not quite, because even generic drug makers probably have some trade secrets. It's hard to know what business doesn't have any trade secrets, but I suppose some highly competitive commodity businesses might come close. What are the trade secrets of Merry Maids, for example? Credit card lending is somewhat close to an open-source business, because all lenders have access to the same credit bureau databases. They have "proprietary" scores that they develop in addition to the ones the bureaus give, but I think those are pretty useless, because predicting credit behavior is pretty well-understood at the mass-market level.

My point in mentioning these various businesses is simply that none of them implies a non-hierarchical approach, and neither does, say, Red Hat.

I think the analogy breaks down in most of the above examples (except Merry Maids) when it comes to means of production. Open source soda, for example, would require that anyone with a new recipe could direct the next production batch at the bottler. Seems pretty unworkable in any form of organization.

I obviously don't have the analogy worked out very far, but I still think the original analogy is on the wrong track.

Potential Problems

[MBC1977]

Here are some potential problems I think with an open business (if its modeled like open source),
****Please Note**** While I don't use open source software often, I recognize some of its benefits,
just my preference for proprietory software ****End Note****

1)Too Many Chiefs and Not Enough Indians: Everybody cannot be on equal ground, regardless of their contributions,
due to human innate selfishness. Granted, open source software obviously works (amazingly, I'll grudgingly admit), but
when it comes to money and decisions, you definitely do not want everybody providing their input. Somebody has to lead,
and some has to follow. Leadership by group slows the course / direction of a group (i.e. business) logrithmically.

2)Too Many Chefs In The Kitchen: Similar to the previous opinon, with the following question: have you ever ate
from a resturant or somebody who cooked and added 1 too many spices, well if you have input from everybody that is what will
happen. In an ideal world, everybody would work together (like a hive mind, i.e. ants, bees, etc.), but the reality is everybody
has their own agenda and own goals, on occasion they align, but most of the time, they diverge. Too many goals pursued, will
bring the company to a near standstill. Leaders provide focus and direction.

3)Not All Members Can Be Paid The Same If everybody is paid the same, then what is the incentive? Granted I'm sure some
feel that money should not drive us and that we should all strive to help one another, but lets be honest, we are a long ways from
a Star Trek universe of goodwill. Obviously if you bust your ass in school for 4-8 years to earn a bachelor's or masters degree in
whatever field of expertise that interests you, you are going to want to get paid (unless you think that school bills are trivial), last
time I checked its getting more expensive every year. (To put it another way, should a person who goes to college make as much as a person
from McDonalds or Wal-Mart? (Btw, I have nothing against these workers, I'm just an honest and realistic question.

To close, these are just SOME of the reasons I can think of at this late hour. But it all sums up the same: Everybody wants to be #1.

Regards,

MBC1977,
(US Marine, College Student, and Good Guy!)

Open Source != No Hierarchy, OS = "Open"

[warm sushi]

The important part of Open Source is not the the subversion of hierarchy. The important part is being "Open". The first thought that occurred to me when you mentioned an "Open Source" business organisation was that it would open and upfront about its REAL aims and strategies, and willing to incorporate feedback from employees and customers. Arguably this would be a boon for almost any organisation, but in my personal experience it is rare in the real world.

In the context of business then, maybe Open Source could refer to a philosophy of inclusiveness in strategy development and implementation, rather than a shift to an anarchic mob.

Corporate slave

[XMLsucks]

I've never slaved away for the sole profit of a board of directors and merciless share holders. I've worked for several companies and helped them earn profit, which was paid back to us employees as salary, determined by market rates. And with that salary, I've had a nice life (plus enjoyable work that made me jump out of bed every morning). I have no complaints for the system, except that the very nature of its smooth functioning turns employees into social-welfare types (and thus hypocrites).

In regards to your question, letting the naive and low-level workers have a say in the running of the company would quickly lead to its downfall (I'm not going to explain here why). Most engineers that I've seen dislike and disrespect management; that is because the engineers are ignorant and incapable of thinking out of the box --- managing and directing a company is far more difficult than writing software, and rarely do engineers even *try* to appreciate the decisions that management makes. Try a little experiment: think very hard about what the management chain above you has to do on a daily basis --- this will probably require that you work on this experiment for a week or two, because it is difficult to adjust your thinking so drastically --- and eventually you'll see that your fellow engineers completely misunderstand management.

Re:Corporate slave

[TerranFury]

I claim no great amounts of experience in corporate America: I am a college student. However, I have had three different internships in three different large corporations. The first was in I.T. for a securities company; the second was as an assistant to a Department Manager for an automaker; my third and current is as an electrical engineer doing VLSI design. From what I have seen, management is concerned primarily with self and departmental image, and managers try above all to minimize "black eyes." Managers shield those below them from politics whenever possible, and try to maximize the amount of company resources that their departments receive, for the benefit of themselves and their employees. The primary decision required is how to allocate resources (mainly employee-time) so as to create the most visible forms of success. What transpires between managers is essentially business-colored politics; visible 'successes' create political capital.

Oui? Non? What 'decisions' are so mind-blowing?

OK, you've swallowed Marx. Now digest it.

[Anonymous Coward]

In a world where people slave away for the sole profit of a board of directors and merciless shareholders

Calling this twaddle 'Marxist' is an insult to Marx; it's more like a simplified summary, filtered through the limited understanding of the reader.

Even investment is better

[EEPROMS]

Here in Australia its compulsory to have a retiremnt fund (called a superannuation fund or "super").

The top 10 performing funds last year were all "industry funds", basically a fund run and owned by the members as a Co Op. The comercial funds couldn't compete because there fee's are sky high even if there returns are good the fee's chew up any gains.

Im in an industry fund (with a spread balanced return setup) and I got 15.8%, if I invested in the same fund in a high risk account I would have returned 27%. One of my Co Workers is in a comercial fund and he started investing before me and now Im in front of him. So "yes" Co Op's do work.

I work there

[Anonymous Coward]

I'm working in such a company. We're around 10 people, and everyone as equal share of the company and the same voting rigths at the board. When new people are recruited, it takes around 1 year until they reach that status and become equal to the co-founders as well. Salaries are also the same for every people. This kind of structure is working very well for a small-sized company. We are not planning to expand it to more than around 20 people because decision process doesn't scale so well. OTOH we are self-founded, we can decide and run our own projects, and everybody is feeling responsible for its everyday work. You need some rules so that everybody is doing the same amount of work. The only difficult point is to be able to accept to share the company ownership with others. That's not something people creating companies are used to do in the first place, but it's a lot better to share with coworkers than with investors targeted on IPO.

Free software is not "equal say"

[Per Abrahamsen]

Your influence in free software depends on many things, such as the quantity and quality of your contributions, and your communication and people skills.

OS Company

[codefungus]

Your mom is the way of the future.

Some thoughts

[mdecarle]

I worked for a company that had no hierarchy: of the 4 managers we had, the CEO got fired, the Sales and marketing manager left to join another company and the customer service manager also joined another company. What we were left with was the development manager (it was a software company) who really had a company in a distant country, and came by once every couple months to see whether everyone was happy. Did it work? Yes, because that CEO had made the company a smooth running machine. It ran without him as well. (Albeit he did the accounting, so now that was outsourced)

Democracy is (as has been said here before) a system in which "a majority" take away rights from minorities. It may seem a good idea: every person gets a vote, and the most votes wins. But it works by exclusion of the ones that voted against.

A good system works with a truely good leader, who listens and takes the best decision for everyone. Therefor, it is best if that leader is not influenced himself by the decisions. The best decision may be the one with the least supporters! In absense of such a leader, the system should always strife to have a consensus, with which everyone can agree.

of course, no

[mapkinase]

There are two factors in modern ecnomony: competition between entities and single-man leadership inside entities, the latter being absolutely necessary for the entities to survive the former.

That is why, e.g., IPO and public ownership is a scam. That is why financing (as opposed to investing) economy is going to fail the capitalist economic system one sunny day.

I am quite gloomy on the future of the world economy. Every more or less pure economic system I know has very dramatic and death-blow flaws. Mixed economies are even less viable, more ethereal.

My point is that the world somehow should stop being dominated by economy driven people. This will be possible only when there will be a single world government that will eliminate the need of deadly cut-throat competition between independent states. More prosperity, less disparity between people will eventually happen one way or another.

Already work for one!

[virtualXTC]

I'm a biochemist. It took me quite a while to find a buisness like this, but I finally found one and am now working there:
broad.harvard.edu

broad.mit.edu

SEMCO - ideal example of 'industrial democracy'

[Anonymous Coward]

You might want to find out about SEMCO, a Brazilian engineering business that had its annual turnover rise meteorically from $4m in 1982 to $212m by 2003 - because of a switchover to a 'democratic' business model by CEO Ricardo Semler. Middle management were fired and employees given responsibility for the company. There's no formal structure to the company, managers are elected, and workers are encouraged to explore their own avenues of business (even to the extent that SEMCO supports satellite companies set up by ex-employees).

Truly ground-breaking, and he himself is a winner of numerous awards.

Links:
http://en.wikipedia.org/wiki/Ricardo_Semler
http://www.semco.com.br/

Re:A.K.A.: Employee Buyout of a Corporation

[lucychili]

There are many cooperatively own organisations worldwide.
I think the Basques have pushed the concept the furthest, their employee
run company Mondragon supported child care centres and a university as part of the profits.
http://en.wikipedia.org/wiki/Mondrag%C3%B3n_Cooper ative_Corporation

What about infinite expansion?

[Anonymous Coward]

Everyone expects companies to expand infinitely, to generate an infinite amount of profits for all eternity.

example: if your profits this year are the same as last year, your stock goes down and your company suffers.
the "market" pushes you and forces you to expand constantly.

I've always thought this violates the laws of thermodynamics.

There is no such thing as infinite expansive, and it is impossible to maintain greater and greater profits year after year after year. It just can't be done.

So when will reality kick in and we'll see a "correction" to this nonsense in favor a better model that makes more sense?

it better be soon.

No, the cat does not "got my tongue."

[Impy the Impiuos Imp]

> An organization where everyone has an equal say in what goes on.

Dogbert: So, you want to form a company where the people who have a say, have a say precisely because they're incompetent in other corporations? Put me down for negative 10,000 shares.

A fine example for open source buisness

[Dollyknot]

I saw an excellent BBC documentry in the seventies about a new kind of cooperative, that started in the Basque region in Spain check out the program here.

http://www.google.com/search?hs=Z0C&hl=en&client=f irefox-a&rls=org.mozilla%3Aen-US%3Aofficial&q=%22T he+mondragon+experiment%22&btnG=Search&meta=/

Go directly to the Mondragon Corporation.

http://www.mondragon.mcc.es/ing/index.asp/

Merciless shareholders?

[Michael Ross]

In a world where people slave away for the sole profit of a board of directors and merciless shareholders...

One man's merciless shareholder is another man's wise investor dumping a losing stock.

Re:A.K.A.: Employee Buyout of a Corporation

[mgs_X75]

we do something similar. however, our charter contains a democractic element and provides for an inclusion of five different interest groups or "production/consumption forces" (artists, users, open source, objectivity/rationality and employees). the core compentence of this collective decision making body is to distribute wealth/available budget: each of those interest fraction has a combined voting power of 20% in the case of important economic decisions (e.g. how much is the salary of the chairman?, how much is the membership fee? how much should an artist get for making a new simple and complex piece of work ("tender-content"?)

from a theoretical perspective, price setting (e.g. membership fees) and cost allocation (salary of chairman) is not primarily outcome of (external) demand and supply but rather the result of an "internal bargaing poll" between all production/consumption forces (subject to outside competitive pressure; however, we expect this pressure to be limited because of the not-for-profit goals of our foundation and the competitive market place advantage that the pro-bono motivations comes with.)

we decided to restrict the democratic inclusion of all interest fractions ("parties") to important economic decisions/fair distribution of wealth.

(at least initially) there is a "benevolent dictatorship" as regards fundamental, non-numerical questions (e.g. in the light of article I lit (a) of the digital license (providing for free access to community funded content), should we give our community members the possibility to retail investing and offer the sale of bonds and shares in entertainment content (which comes with access restrictions)? should we distribute exclusively in ogg/xvid?). those questions are first discussed with the supervisory board (interest fraction objectivity/rationality) and are not subject to voting.

Day to day decision making is achilies heal

[salesgeek]

Co-Ops, Partnerships, Limited Liability Corporations all have elements of this open source company model - but carry few of the disadvantages. The real problem with the "open source" business model is the day-to-day decision making. If you involve more than a small core group in decision making on small issues - you paralyze your small, agile open source company's chief market advantage: speed. You also lose the advantage of delegation - letting the best qualified make the decisions they are best
qualified to make. Do if you like bad decisions made slowly, the open source model business institution is your best option.

Business institutions have evolved over the years and now combine elements of the "open source" model with more traditional models. Partnerships and LLCs delegate day to day decision making to a management team and reserve some level of strategic decision making for the members (stakeholders). A common example of reserved decisions: mergers, membership decisions, financial goal setting, product development direction and employee hiring/firing. Members can have different levels of influence or all be equal. Accounting firms and Law firms have used the LLC for years to get highly trained, highly intelligent people to work together with great success in the marketplace.

Meritocracy

[astralbat]

Open source works, not because everyone has an equal say, but because it's based on a meritocratical structure. The people at the top are often deemed the most able and most 'fit' to be there. Participants gain from the system by being rewarded for their worth and ability.

This could extend to other industries, but I think it will only work where entry barriers are low (small monetary costs) and expertise is widely recognised. Wikipedia is another fine example of this.

Re:Worse. Utopianism.

[Anonymous Coward]

Perfection is a direction, not a destination.

Re:Cooperative - The Internet

[darkonc]

The internet originally developed as a Co-op. Anybody who wanted to could get involved in the discussions about creating the IP protocols and the rules of the 'net back in the '80s. Granted, money made it easier to attend the face-to-face meetings, but the theory and much of the practice was that we were equal. Now, some people had more 'say' in the process, but that was often simply due to the fact that they had proven themselves capable, insightful, and/or productive and not because of any inherent power.

As for the person who claims that there's no endeavor where everybody is exactly equal -- that's not necessary. The point is that everybody has equal access to participate, including in the decision-making process. When that happens, some people will rise to the top by dint of their ability to produce and listen etc. however, in a well-designed co-op, their 'power' is a function of their productivity and not their 'position'. If they stop being good leaders, then the people will simply stop listening to them.

The GPL actually enforces this sort of situation.... If Red-Hat stops serving their customer base, then white-box is completely capable of taking the mantle away, simply by getting the attention of the market as a better servant of the user base.

Consulting Firms

[Anonymous Coward]

Professional consulting firms -- such as accountants, lawyers, and engineers -- are frequently run as partnerships. The professionals who bring in work and bill for it decide on corporate direction and management policies; there are no outside shareholders. Furthermore, there's a lot of freedom and responsibility for individual professionals; they're expected to find and manage their own work, rather than operate under close management supervision. But if you don't bill enough work, the other professionals have little interest in keeping you as a partner.

Accounting, janitorial, and secretarial staff, while necessary to the operation of the firm, are generally treated as an overhead expense, and their hours are not billed out. Thus they are not given votes in the direction of the firm.

We find it difficult to see our own messes.

[Futurepower(R)]

I'm an American who lives in the United States.

You said, "From my outsiders' point of view, Brazil doesn't look like it's ahead of the rest of the world, socially; with a flourishing market in bullet-proof cars, it looks like a bigger mess than I'd ever care to live in."

We find it difficult to see our own messes, I think. If you are a taxpayer in the U.S., you pay to kill people in the Middle East and destroy their property. The U.S. has invaded, by my count, 24 countries since the 2nd world war. Part of the social cost of the constant violence is that people in the U.S. are the most obese in the world.

Certainly I agree that there are major messes in Brazil, also.

Team Design in Open Source Business

[smieythe]

A business model needs a project model to minimize the chaos that many other posters have described. I've spent two years researching how teams actually get things done, how they fail, and the role that the leader plays. Based on that research, I've tagged the design in play in most creative and fast-moving teams as Internetworked.

The most effective teams have informal networks for problem solving and other communications that look like the Internet. They also share the attributes of the Internet of information sharing, resiliency, and fostering creativity. If acknowledged by management or not, these models are behind most successful teams. They are also at the root of most successful agile and radical development team organizations.

More about Internetworked teams at this link: http://www.companysmith.com/books.htm

ownership vs. decision-making

[Anonymous Coward]

Perhaps we should decouple ownership from decision-making in an "open-source-like business" in which every employee has partial ownership of the company but he or she fits in a specific role with a responsibility for making decisions related to that role.

untrue

[CarpetShark]

As others have said, this is untrue. As another example, some monastic communities function, not by hierarchy or or democracy, but by reaching concensus through discussion and respect.

Re:untrue

[An Onerous Coward]

Consensus-based decision making doesn't sound easy to me, nor does it seem strictly necessary. In fact, it might be a case of the good being driven out by slavish devotion to an ideal.

My arguments: it's not easy, it's time intensive, and it doesn't scale well beyond small groups of relatively like-minded individuals. In any noteworthy organization, there are going to be things about it that individuals don't like, and yet the message of consensus-driven decision making seems to be that these things are anomalies which need to be eliminated.

To me, it seems more pragmatic to do the following:

1) Demand transparency in all business processes (especially decision-making).
2) Use committees to study issues in depth, then either give them the power to make the decision, or (for more important decisions) ask them to present their findings and a proposed plan of action to the wider membership.
3) Use condorcet voting, so that multiple variations of a plan can be presented without splitting the vote.
4) Demand supermajority voting for really far-reaching decisions.
5) Foster a culture where things are debated in a constructive, non-adversarial way.
6) Avoid institutionalizing the power of any individual or group of individuals.

I think this overcomes my primary objection to consensus, which is that people start expecting decisions to always agree with them. Doubtless the people who have been experimenting with consensus-based decisions have found other ways to overcome my objections, and I'm interested in hearing them.

Re:untrue

[CarpetShark]

It certainly doesn't scale well, no. I think it may be ideal, in a small group of highly conscientious, interested, and respectful participants. However, I wasn't advocating it as a global solution or anything; just pointing out that there are other methods, that work.

On your "pragmatic" approach... yep, I tend to agree :)

Re:untrue

[pintpusher]

doesn't scale well beyond small groups of relatively like-minded individuals

I have long thought most human endeavours don't scale well beyond small groups of like-minded individuals. HIstory seems rife with examples of systems that work well when populations are small but degrade as populations grow. A classic example is our own democracy. On every level, from local to national, things were initial done by small groups building concensus. That falls apart when your representaive is one voice for tens or hundreds of thousands instead of a few hundred to few thousand. Tribal societies work because you're dealing with a pretty small number of people who pretty much HAVE to live with each other and thus are driven to reach consensus. The result is that the small societies function pretty well. IANA[socialogist|political scientist|other-appropriately-skilled-individual].

Re:untrue

[dubl-u]

there are going to be things about it that individuals don't like, and yet the message of consensus-driven decision making seems to be that these things are anomalies which need to be eliminated.

That's not the case in the consensus-based organizations and teams that I'm involved with.

Consensus doesn't mean that everybody has to be of one mind. It just means that everybody has to find a decision acceptable. It's a common experience that somebody will disagree with a direction but accept it for now to see how it goes. There's also a lot of informal horse trading and self-governing. If I push hard for something that matters to me, I feel like I've used up some social credit and will be more moderate for a while. And if you let somebody have their way on something they care about, they'll be more agreeable.

it's not easy, it's time intensive, and it doesn't scale well beyond small groups of relatively like-minded individuals.

This is more true. It definitely takes more social skills. I don't find it much more time intensive when people are good at it, but it's certainly harder for people used to command-and-control organizations. On the other hand, I believe it's much more efficient: because everybody stays in sync, you avoid layers of management, confusion, and waste.

You're right that it doesn't scale up to large organizations if you're going to treat the organization as one unit. On the other hand, I've seen people have success when organized in a cellular fashion: you divide people into independent but interacting small teams. It's more like a network of small businesses than a traditional large organization. I'd also add that the large command-and-control organizations I know are really only good at simple things. For example, a large bank I know well is great at getting all the tellers to do the right thing, but their software development efforts are a mess. So it's not clear to me that command-and-control structures scale very well for knowledge work.

Not open source if you don't own: Sounds Communist

[Abrax]

This is totally communist and not open source. Open Source is actually having full and total Private access to the original product and then owning it, not having to use a moajority rules 51 percentile voting mechanism to get nothing done.
Democracies suck.

The best open source situaltion would be one private person or owner to create the product and then give it away for free as the consumer would own it and have immediate access.

Nothing new

[simgod]

This concept has already been tried in socialist Yugoslavia.

http://en.wikipedia.org/wiki/Workers'_self-managem ent

It has low economic efficiency.

TMTOWTDI

[plopez]

There is more than one way to organize a co-op and there is more than one way to approach non-hierarchical organizations, so yes it is relevent. Also this thread, I hope, may have provided the poster with some models to look at to see what may work. Anyway, my $.02

Use a bottom-up organization

[AeiwiMaster]

A normal bussiness is typical a top-down organization.

A problem with such a organizatin is that it's
promoting people to there highest level of incompetents !

As long as they do a good job they get promoted
and then they get stock in a position where they don't do well.

The way to solve this is to use a bottom-up organization and make every employee
stock holders.

In at bottom-up organization the project group chose there own project manager.
The project manager chose a department manager and etc. to the top.

But every member can challenges his manager for his position,
and then the group vote between the 2 candidates.

Semco

[Ulmo]

I'm surprised that no one mentioned Richardo Semler and his company Semco. All employees share in the profits and can contribute to decision making. I found his book, Maverick, very interesting.

http://en.wikipedia.org/wiki/Ricardo_semler

if (linus == charismatic) abort();

[Anonymous Coward]

Linus isn't charismatic, he's a stubborn bull-headed asshole. RMS is charismatic.

Linus is just damn smart and he works damn hard, and since open source is pretty much a meritocracy he gets a lot of credit.

Note: this is a good thing, I'm not disparaging Linus. You'll note that I'm not disparaging RMS either---he's just there as a charismatic point of comparison.

Participatory Economics...

[ParProj]

To help reinvent the wheel more successfully, you may also want to check up on ParEcon http://en.wikipedia.org/wiki/Parecon. It is a rephrased and updated economic model drawing on Anarcho-Syndicalism and the like. ParEcon the book also includes an account of how the market pressures worker-owned companies to erode their equalitarian values (e.g. in old market-socialist countries such as Yugoslavia), undermining projects like the one proposed here.

Then who is your lord?

[Reverend528]

ARTHUR: Then who is your lord?

WOMAN: We don't have a lord.

ARTHUR: What?

DENNIS: I told you. We're an anarcho-syndicalist commune. We take it in turns to act as a sort of executive officer for the week.

ARTHUR: Yes.

DENNIS: But all the decision of that officer have to be ratified at a special biweekly meeting.

ARTHUR: Yes, I see.

DENNIS: By a simple majority in the case of purely internal affairs,--

ARTHUR: Be quiet!

DENNIS: --but by a two-thirds majority in the case of more--

ARTHUR: Be quiet! I order you to be quiet!

WOMAN: Order, eh -- who does he think he is?

ARTHUR: I am your king!

WOMAN: Well, I didn't vote for you.

LLP

[infosec_spaz]

Yes, LLPs operate in this manner as well, and as long as they remain small, it is fairly effective. The guy up towards the top of the comments is very correct, some succeed, and some fail. Generally, it all boils down to business sense, not who you answer to, or what demands are put on the company by outside forces. If your CEO is a smart guy/gal, they will succeed.

I'm all equal

[McGiraf]

"There does not exist a human organization in which everyone is equal (though some groups try to pretend)."

This statement is false.

I (for one) am a member of such and organisition. All members of it are equals. To ensure equality all that has to be done is keep the organisation small enough. This organisation is a religion, it's called Iism. I am the only member.

Consider management by prediction market...

[Money for Nothin']

Time had an article titled "The End of Management?" a while back, in which they discussed companies which had successfully used internal prediction markets (among their employees) to make company-wide decisions. HP and BP were cited as examples.

As it turned out, they were finding empirically-better sucecss using these markets than they were with using their layers upon layers of bureaucratic, 20th-century-style management.

Frankly, I don't think management will ever go away *completely*; who else is going to create the items in the market upon which employees will bid? So on that note, I do think Time's title is a little over-zealous.

But at the same time, I do think such markets can be a force for flattening organizational hierarchy and reducing management headcount. And as more companies become enlightened to the idea of prediction markets -- rather than just mere internal polls, which, unlike a market, have no serious, direct incentive to make a correct decision -- they will turn to such markets instead of middle-managers, who tend to have been promoted into management because they are technically-incompetent and/or are better than other people at dressing well and kissing ass.

The "people's revolution", if there is ever to be one, will (in usual paradoxical economic form) probably not come at the hands of a communist dictator or a starry-eyed Euro-socialist, but rather, in the back rooms of corporate America.

Don't forget zero =)

[Myria]

All members of a group of zero members are equal as well. =)

Melissa

Alternate scenario

[raftpeople]

Honestly, who is really facing the greatest risk? The venture capitalist who invests a few million in a startup, knowing that his other, less risky investments guarantee him high income for life? Or the person who takes a minimum wage job knowing that she could be fired in a couple of weeks and be unable to make rent, or spend the next two years working for a manager who likes to feel her up, or injure herself on the job and have to fight her employer tooth and nail to get her medical bills paid?

Honestly, who is really facing the greater risk? The small business owner that put his/her life savings into the company and has the house mortgaged to the hilt to make payroll? Or the worker whose spouse is already making enough to pay for the house and a boat and is only working because he/she doesn't want to stay home?

Although both of our examples exist in the workplace, neither is representative so they add no value to the debate.

Re:Alternate scenario

[An Onerous Coward]

I disagree. Most capital is controlled and directed by people who have very little risk of falling from the ranks of the upper class. Most labor is performed by those who are either locked out of the middle-class lifestyle, or are working their assets off trying to hang onto it. They don't have the choice to diversify away their risk, as owners do, and they generally have far fewer choices about how and when they exchange their labor for money.

An example showing owners having great control over their investment and laborers having very little is far, far more representative than the converse. Just because you can appear to flip the situation around by ignoring certain economic realities, doesn't mean that the two situations are actually equal.

Re:Alternate scenario

[anagama]

As someone who has started his own buisiness, and who knows many who have also done so (it's common in my field), let me say this: it's one of the scariest things you can do. I left a cush state gov't job -- a steady check 2x per month, great benefits, retirment etc. etc. I had enough money saved up to support myself for a while OR put a down payment on a house (not both). I chose to start a business -- when you're income drops to zero and your monthly expenses double (office rent etc), you get terrified. Tons of "little guys" run their own business, whether plumbers, landscapers, lawyers, doctors, or dentists -- running a business is open to every educational level.

It annoys me when people who have never actually tried starting a business, get all preachy it (maybe you have and you're destined to be a brilliant innovator). A previous poster was right -- wage slaves don't risk much (and hence stand little to gain). People who try to start their own business often do risk everything. I risked my entire life savings when I could have bought a house instead. My partner mortgaged every last cent out of her home, as did one of my friends. Seriously, take everything you have, everything you can borrow, and then gamble it. Once you do that, evaluate how you feel about this whole issue. Now, I'll certainly listen to my receptionist's suggestions about this or that -- but I'm still making the decisions because I'm the one who has everything at risk. If I go out of business, that's huge for me -- she'll just get a different job answering the phone elsewhere. That's a month's job searching level of inconvenience. I'm out everything. Since I risk more, I have no issue with the idea that I stand to get more.

An Open Source Business Plan

[22RealMcCoy]

An open source business plan you can download from sourceforge. It's a Catch-22. Universally trusted DRM and syndicated commerce can't work unless the business methods are open, and it is common wisdom that a business must keep its methods secret. Unless of course the business aims to build syndicable marketplaces with universally-trusted DRM riding on Open Source CMS. By surfing along with Moore's Law, Metcalfe's Law, and Constitutional Law, this can all be accomplished. Digital rights management (DRM) is the holy grail of the internet. It is a multi-billion-dollar, ever-expanding market, and an apt solution will be invaluable to the livelihood of all media companies. 22surf proposes that DRM will be solved with an Open Source philosophy such as that promoted by Authena. Security standards will only emerge if artist-hackers trust them. Over time, marketplaces that are best able to establish trust will prevail and snowball. The first mover in "trust" will have a lot to gain. The business model of centralized conglomerates marketing the digital rights of a handful of artists is outdated. Both the artists and end-consumers have been flustered. A new model, consisting of a distributed network of thousands of creators hosting their content on Open Source CMS and syndicating it to trusted archives and marketplaces, is emerging. In order to build a trusted network of marketplaces supporting common standards for syndicated commerce, the business plan should be shared openly. The transparency provided by Open Source will foster the adoption of open standards for DRM and syndicated commerce. 22surf encourages artist-hackers to download our business plan for building profitable archives and marketplaces with Open Source CMS, change and build on it, and join in the following revenue streams: 1) sell keyword advertising throughout free OSCMS hosting services (blogs, galleries, etc.), 2) sell advanced hosting options/extra disk space, 3) charge 5% on content marketplace transactions, 4) charge 5% on Open Source Arts freelance services marketplace transactions, 5) manage/host media assets of large businesses (record labels/movie studios/etc.), 6) sell printing services (or partner with businesses) for hard-copy books, prints, CDs, DVDs, etc. 7) create a syndicable friendster/FOAF (friend-of-a-friend) network Not long after I presented Authena at the Harvard OSCOM conference, I got to thinking the only way one could build a network of marketplaces supporting syndicated commerce would be to Open Source the business plan. Here's the vision: a writer signs up for a free blog at 22blog.com (powered by cafelog), or a band signs up for a free postnuke site taylored for bands at 22band.com (powered by postnuke or phpnuke), or a photographer signs up for a photo gallery or a vvgallery stock photography shop at 22photo.com (powered by gallery), or somebody new in town signs up for a friend-finding/dating FOAF site at 22friend.com. Whoever they are, they're immediately given a master account at 22surf, which allows them to activate a gallery, blog, or personals profile with a single click, and to syndicate their content and information to other networks such as 33surf, or 44surf, or any other network. And as 22surf will be Open Sourced, you'll be able to run your own network and allow your users to syndicate their content and information to other parallel networks, archives, and marketplaces. 22surf aims to leverage Open Source CMS to allow artists, writers and musicians to run their own stock photography shops, record labels, and publishing houses capable of syndicated commerce. As software has often been Open Sourced with great results for both developers and end-users, we thought we'd Open Source the 22surf business plan by releasing it under a Creative Commons license. This makes sense as our business plan does not consist of building a central marketplace, but rather a distributed network of marketplaces to which artists may syndicate their content. Only with thousands of independent marketplaces can trusted standards emerge.

Where's the fun in that?

[John Guilt]

Humane, voluntaristic, business?

Lots of people seem to need to give arbitrary orders backed up more by power relationship than by reason, and many to take them (to avoid being snide: I may be like this a little, and you too).

This seems to satisfy a deep need in humans, stemming probably both from having been raised in at-least-mildly authoritarian institutions (families, schools, churches) and from our Glorious Primate Heritage (unless all our ancestors were bonoboid).

I'm bringing this up because I believe modern business practice, and ancient as well, probably has more to do with S&M than anything else. "We" don't "want" anything better; a shame, but at least it will probably keep us from invading space effectively until we give that nonsense up---better that the virus be contained ina gravity well whilst it's still raging.

In Soviet Russia ...

[smoker2]

The company runs YOU !

No, wait...

I'll get my coat ...

Re:Wars aren't won by armies praticing democracy..

[Anonymous Coward]

While I agree with most of your post, I believe you're missing one important point.

Democracy does not exclude leadership.

If the debate process takes too long, vote on a leader and have them make the decisions. If it's good enough for the country, surely it's good enough for a software project.

Mod Parent Down

[Bandit0013]

Um ... how is it that huge nations (and India is much bigger than the US) can be run democratically, but a firm with only a fraction of the size of the nation's population on its workforce could not run democratically?
Insightful?

Um, that's because the US and India are not democracies as is described. You vote for representatives so that there ends up being a subset of people making decisions. These representatives usually join committees based on specialties and the other members of their party tend to take their findings at face value to make the process more efficient.

Co-ops often let all the members vote on some issues, but they also tend to elect a board that makes day to day decisions and only bring the really important stuff to the whole group.

This has been done, it works well... or not... :-)

[FOSSguy]

The example we talk about in business school is Ricardo Semler's 'Semco' company, in Brazil. Read "Maverick: The Success Story Behind the World's Most Unusual Workplace", authored by Semler, R, ISBN 0446670553 (paperback). Semler is the poster child of MBA and Graduate Business schools worldwide. He's written other stuff on the topic, and there are other examples. Semco is a good start though.

Semco has a very open arrangement. A revolving board of directors, so each guy is only CEO for six months (focus on the position, not the man). The books are open, and the staff are given training courses in accounting, etc, so they can read and understand the books. Everyone knows what everyone earns, everyone chooses their own wages. The company openly supports private enterprise, and will support (financially as well) anyone who wants to take a Semco machine out and start his own business selling goods back to Semco. It sounds like a nice system.

The goal is to remove something that Max Weber called "The Iron Cage of Bureaucracy" - the restraints of industrialised society. It works, perhaps...

Once you've read Semler and you think that he's on to something, then read Barker, J. R. (1993). Tightening the iron cage: Concertive control in self-managing teams. Administrative Science Quarterly, 38, p. p. p. 408. What you see from that is that so-called empowerment is worse than just being told what to do by a single boss. Workers in empowered self-managed work teams felt under more pressure than they did before. One guy said "before, it was just my boss watching me. Now, everyone is watching me".

Email me if you'd like help finding a copy of Barker.

Oh, also, David Boje has interesting things to say on the subject. Maybe 'empowerment' is now what the world needs! See: Boje, D. & Rosile, G.A. (2001). Where's the power in empowerment? Answers from Follett and Clegg. The Journal of Applied Behavioral Science, 37, p. p. p. 90. (email me for help finding a copy)

As a Matter of Fact, Yes

[McLuhanesque]

This happens to be the topic of my PhD research in organization theory. I have written considerably about the various theoretical foundations of a new theory of organization, most of which is posted, or linked to, on my blog under this category. As well, I have published an article in the latest edition (Summer 2006, vol. 24 no. 2) of the Organization Development Journal entitled "The Penguinist Discourse: A Critical Application of Open Source Software Project Management to Organization Development," that extends the well-known work of Yochai Benkler ("Coase's Penguin") to apply open source principles and motivational factors to general management.

I would be happy to correspond with anyone who might be interested in my work relative to their own workplaces (and I also do OD consulting, btw).

Human Nature Says No

[Jerim]

Okay, we start out with 6 people, all in favor of a more open, democratic type of business. No one cares about the money, they just want to make a great product and treat everyone fair.

After a few years, they start to see success. Money starts coming in. One of the six starts to think that he is the reason for the success and the other 5 are riding his coat-tails. Everything up till this point has been pretty much his idea he belives and the others just worked to make it happen. So now he wants more money than the others. The guy who put the company together and got the ball rolling, feels that he should be compensated. It is "his" company after all. A third member does not like having to put in all the long hours like everyone else. Everyone else is single with no family life. However, he is married with two kids. Why should he have to work 10 hours a day? But he also feels that he should get paid the same, because even though he doesn't work as long, he works every bit as hard.

Now, someone has to make a decision on all these issues. Who makes the decision? The group can't come to a conclusion. Even if they did, there would still be people in the company who didn't agree with the decision (A majority vote will always leave the minority angry.). So now you have some guys getting what they want, and some not. That sounds just like every single company out there, regardless of how it is run. At the end of the day, we are all human. No matter how much candy coating we do, life is not a fairy tale where people all magically get along and never disagree. Look at any rock band and you will see case after case of falling outs among "equals." At the end of the day, human nature is to take control and be greedy.

That is a big part of the problem

[einhverfr]

I *really* hate working in big business enviornments where the freedom to contribute is greatly curtailed.

The issue is that many people do have a stake in the success of hte business. There are career, professional, and even financial risks involved in choosing one's employer. Yes, it is an investment in time. And most of the time it is unrewarding-- financially, professionally, and personally. Small businesses (in particular startups) are far more rewarding but they are also more risky. If you doubt that, talk with employees who have had paychecks deferred during hard times.

What if a company was organized in such a way that people could contribute as much as they could, like a small business even if the business got big? What if one were able to build that sort of architecture of participation that allows unfettered contribution to a project?

Building such a company now

[CaptainTux]

I'm actually in the process of building such a company now. I'm using the democratic management style as a selling point to lure in talent (developers and management) I can't pay. I offer a good share of the profits, a democratic management atmosphere, and a LOT of work freedom. So far, I'm not far enough along to know if it's going to work well or not but it looks very promising.

I fully agree

[Infonaut]

While I would urge this guy to start small (and have a clear idea of what he wants to accomplish, which he seems to lack at the moment), I would also encourage him to start implementing his organizational ideas from the get-go.

I likely didn't phrase my comment very well. What I meant was only that he should start small, as you suggest. I've been in small organizations that attempted to do the very thing he brought up, and it didn't work well. However, the collective he envisions may come up with a methodology that works. More power to them if they can.

Your Dilbert quote cracked me up. I see that all the time in business, and it is an asenine world view. However, that's usually a reference to business strategy, rather than the fundamental legal and organizational structure of a company. I've seen many organizational structures, all of which incorporate some sort of heirarchy. There are many reasons for this, but I think most of them have to do not with how an organization functions in isolation, but how it interacts with the world. The capitalist system is not set up to handle collective decisionmaking very well, given that banks, investors, vendors, and customers all operate with stratified decisionmaking structures.

The best way to learn about whether something works in business is to go out and try it. I should have made that and "start small" the focus of my post.

This post is spam

[omyar_hunt]

OH MY GOD. This post is pure spam - read the last sentence "I'll start up this new company if you pay me $30 a month". I can only think that having it up on slashdot will encourage people to give him cash, too. Be careful people.

No leader, no problem???

[savio13]

You have an intellectually interesting question here. But I think you'll find that it'll be difficult to implement as wholeheartedly as you'd like.

I find two problems with the idea. First the lack of a leader, and second, the notion of 1 person 1 vote.

Very few successful businesses, organization or even sports teams can run without a leader. Decisions take longer to make, and if membership isn't screened somehow, you may find that the majority of your 'employees' have a nack of picking really bad ideas for your company to follow. As this cycle repeats, you'll find that your best talent will want to do something else with their time.

I think what you want to do is apply aspects of the open source business model to your company. Little things like the leader/ceo typically knows what he is talking about and in a crunch, could actually do the work of his employees. This is something that Toyota has been very successful at. The book 'The Toyota Way' (get it at your library), talks about how every boss can do the job of his employees better than the employees themselves. This notion is carried all the way to the top of the organization. Actually, bosses are viewed as teachers more than managers. Another key aspect is that everyone's opinion is valued in finding a better way. That does not mean 1 person 1 vote, just that your idea is considered...because some will surely have bad ideas ;-)

savio

Communism (ideally) is a good idea too, but...

[GReaToaK_2000]

in practice, the human element screws it up.

You forgot to mention ....

[jotaeleemeese]

.... that Germany is the biggest exporter in Europe, the 3rd (or 4th, maybe China overtook them last year) economy of the world and that those unemployed have decent unemployment benefits.

I mean, you have to paint the full picture, most economists talk about Germany like if it was a failed country for bunnies sakes.

So?

[jotaeleemeese]

You risk your money. You o bankrupt if you fail, take a job and all is dandy.

A low paid person risks his livelyhood and dignity with his job.

Re:A.K.A.: Employee Buyout of a Corporation

[Eli Gottlieb]

If someone would do us all a favor and MOD THIS MAN UP NOW!

I've already done it! Well sort of not really..

[phersotty]

I was thinking kinda the same thing. I even impulsively registered a domain for it last month and put up a forum. Since then I almost forgot about it. It looks like nobody else but me has been there. If you're interested check it out at http://www.doublev.org/ Leave some comments. Who knows maybe it will be the first of its kind.

Re:I've already done it! Well sort of not really..

[phersotty]

hi again, I'm replying to myself. It occurred to me that my post might look like spam since I didn't even say what kind of open source company I was proposing. Its an idea for an open source vegetarian fast food franchise.
This is what I came up with so far.
Apply the concept of open source software business model to a non-software company. It would work similar to a franchise operation but their won't need to be any franchise fees. Instead the website is community driven and defines the business mission and goals. Ideally the site will become a definitive source on what Double V represents and will set the standards that the franchisees will follow. Anyone will be able to do business as Double V as long as they abide by the expectations of the community. Using the Double V logo will become an honor and a sign of quality.

Open Source? Try again...

[camt]

Open Source != "An organization where everyone has an equal say in what goes on."

In fact, the Linux kernel development model has often been compared to a dictatorship with Linus at the top. Is that a bad thing? Not in itself. The two concepts are entirely orthogonal, and the latter (decisions by committee) is a bad idea in nearly every setting.

Re:A.K.A.: Employee Buyout of a Corporation

[camt]

I always used to think an employee-owned organization would be nearly ideal, but I have seen so many cases where it is simply disaster. I really liked Google's IPO - where they were able to maintain control by employees without necessarily maintaining a majority of their financial ownership by employees.

I wonder what factors contribute to the success or failure of an employee-owned company? Other than the obvious business and marketplace factors. Comparing three identical hypothetical companies, other than their ownership structure -- one employee-owned and one private and one public, some successful and some not: what factors determine their success and failure?

It seems to me now that being employee-owned would generally be a bad idea.

See http://mondragon.mcc.es/ing/index.asp

[pseelig]

Check out http://context.org/ICLIB/IC02/Gilman2.htm about the Spanish cooperative Mondragón http://mondragon.mcc.es/ing/index.asp .
It is in the eigth place of the largest Spanish corporations and is very succesfull in the worlwide market place since *decades*. And they do keep growing!

Call it Project Utipia

[Mondor]

"is there room for a new type of organization
that throws away the archaic and monolithic organizational structure of
today and from there form a company that has its direction dictated by
all of the members that run it."

Yes, there is a room. It's called communism, or Utopia. Where everyone is even to others and everyone has the same rights as others... But I'm afraid it's only words, as it goes against the nature - because everyone has it's own gift, features, skills, whatever, and every job requires a special skill or even gift, talent. Being a good programmer doesn't mean being a good director, and vice versa.