Differences Between Worker Cooperatives and Collectives
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The terms "cooperative" and "collective" are often used interchangeably. While there is some overlap between the two, these terms have distinct meanings:
A cooperative is an organization that is owned and democratically-governed by its members. Each member owns one voting share, and has one vote on major decisions as outlined in the organization's bylaws. Cooperatives generally adhere to the seven principles outlined by the International Cooperative Alliance.
A worker cooperative is a cooperative in which the workers are the only member-owners. This means that each worker owns one voting share, and is able to participate in the governance (and often the management) of the business. Because workers are the only people eligible to become member-owners, outside investors or consumers do not participate in the governance of the cooperative. Some worker cooperatives have elected managers, or managers who are hired by the elected Board of Directors. Some worker cooperatives that are not collectives have a flat management structure at an operational/worker level with no managers, but key decisions made by the Board of Directors.
A collective is an organization that is managed without hierarchy. This means that every member has equal decision-making power. Some decisions may be delegated to individual members or sub-committees, but no one has the special, un-recallable authority usually granted to a manager. The legal structure will specify that all Members are automatically Directors and must accept the responsibilities of Directorshop, or that the organization is managed by Member meetings.
A worker collective is a particular kind of worker cooperative. A worker collective adheres to the same cooperative principles as does a worker cooperative. However, worker collectives also adopt a non-hierarchical (often called a "flat" or "horizontal") management structure. This means that all workers are equal co-managers: nobody has un-recallable decision-making power or authority over another worker. Smaller decisions may be made by individuals, department teams, or committees, but all collective members participate in both major management and governance decisions.
As you can see, the word "cooperative" refers to a specific ownership structure. Cooperatives can be owned by workers, community members, or both. The word "collective" refers to how members participate in the management structure. Collectives manage worker-owned cooperatives, consumer cooperatives, non-profits, or volunteer activist projects.
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