Encouraging signs of a new business ethos for a new society

17.05.2019 - London UK - Silvia Swinden

Encouraging signs of a new business ethos for a new society
Catalan castellers collaborate, working together with a shared goal (Image by Eric Sala & Tània García (uploaded to Commons by Baggio) • CC BY-SA 2.5)

Neoliberal capitalism has been denounced recently as a destructive and dehumanising force responsible for human and environmental disasters. The alternative models are not easily found in corporate media where Margaret Thatcher’s TINA (“there is no alternative”) is still the orthodoxy for economists in power.

It is, then, encouraging to find the green shoots of a different business culture, a more humanised and compassionate one, making their way through publication filters and bias.

Ethical managers

Research carried out by Dr Lee, Dr Joanne Lyubovnikova from Aston Business School, and Drs Amy Wei Tian and Caroline Knight from Curtin University, Perth published by the Journal of Occupational and Organizational Psychology concluded that “Bosses who are so-called ‘servant leaders’ create a positive culture of trust and fairness in the workplace. In turn, they benefit through creating loyal and positive teams. This type of manager has personal integrity and is also keen to encourage staff development. The new research shows clear evidence of a link between this style of leadership and an increase in productivity.

“Researchers examined 130 independent studies which had previously been published and used them to test a number of theories.

“Our work shows that, as we expected, a ‘servant leader’ style of management which is ethical, trustworthy and has a real interest in the wellbeing and development of staff brings about real positives within the workplace,” said Dr Allan Lee, the lead author of the report and Senior Lecturer in Management.

“Employees are more positive about their work and therefore also often feel empowered to become more creative. The result is a rise in productivity.”

“The analysis also found that this style of leadership often creates a positive and valued working relationship between the manager and employee.” Science Daily report.

The partnership model

A very traditional and successful UK company, John Lewis, was created on the principle that workers are not employees but rather partners, who receive a share of the profits.

Recently The Guardian published a report on a business boss who decided to copy the model: “The founder of Richer Sounds is handing control of the hi-fi and TV retail chain to staff, in a move that will also give employees large cash bonuses.

“Julian Richer will announce to staff on Tuesday that he has transferred 60% of his shares into a John Lewis-style trust. Richer, who recently turned 60, said the “time was right” to pass the baton to the chain’s 531 employees.” … “With annual sales of nearly £200m, Richer Sounds is one of the biggest UK companies to embrace employee ownership in recent years.

“The Employee Ownership Association (EOA) says more than 350 businesses have now adopted the model, with at least 50 more preparing to follow suit. Recent converts include Riverford, the organic vegetable box company and Aardman, the Bristol-based animation studio behind Wallace & Gromit.”

The Humanist business model

Pressenza published in 2013 an interview to the founders of “a private company trying to implement a new model in the relations between capital and labour, as well as in the way their business is managed. Inspired by the Humanist Document, for the past twenty years these two Chileans have been trying to implement their vision of a company that develops and grows whilst meeting positive standards that allow it to compete in the domestic market, not to become indebted to banks, reinvests its profits in the development of the company, prioritising the best possible treatment for staff and suppliers as well as customers, in constant search for improvements consistent with its principles.

“Roberto Blueh and Juan Aviñó created Alfacom Engineering twenty years ago, looking to form a company that allowed the participation of workers in the company’s decision-making process, based on a friendly treatment that promotes creativity in people”.

One of the main tenets, workers participation in decision making, allows for long term planning based on job security rather than short term profits for the shareholders. 

The resilience of co-ops

The recurrent crises of the boom and bust economy designed for maximum concentration of wealth in fewer and fewer hand will continue to stalk private companies for as long as this system carries on. 

Cooperatives, instead, have shown great resilience in times of crisis, which has been acknowledged by the UN:

“Over the course of the ongoing global financial and economic crises, financial cooperatives have proven their strength and resilience, benefitting members, employees and customers,” said Mr. Ban in his message marking the Day, which this year is on the theme, “Cooperative Enterprise Remains Strong in Times of Crisis.”

“With the world facing multiple crises, and with natural disasters testing even the most robust economies and communities, cooperatives have meanwhile maintained high credit ratings, increased assets and turnover, and expanded their membership and customer base, the UN chief said.”

Research showed just like in the previous example that participation in decision making allows for long term planning based on job security rather than short term profits for the shareholders. 

Economics students rebel against TINA

Rethinking Economics is an international network of students and lecturers arising from the Manchester University Post-Crash Economics Society. Students questioned the curriculum based on a single premise married to the prevailing economic system and largely excluding alternative models that may be more appropriate to avoid the shortcomings of today’s system. Their activities have inspired groups in other parts of the world.

Reasons to be hopeful?

We presented here only a fraction of experiments taking place around the world, developed by people who experience the prevailing business model as contradictory and cruel, so we have left out the Commons, Universal Basic Income and others that are not specific alternative business models. But this sample gives us some hope that as demonstration effects they are inspiring others to change their practices. More structural changes are necessary in national and international economic systems in order to fight inequality, climate change, illnesses produced by environmental pollution, lack of access to health, education, welfare, clean water, etc., all of them forms of violence, all of them at the root of wars and the refugees crisis.

But even if the solution to such problems may appear as a tall order, the beginning of small changes, e.g., how to humanise production, may be allowing the development of solidarity and compassion towards others, reversing the tide of individualism promoted by the neoliberal dogma. 

Categories: Economics, International, Opinions
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