Making decisions in cooperatives can be a uniquely difficult task. There is always a diverse range of member interests, and decisions must be made in a fair and democratic manner. Before deciding what sort of decision-making process your cooperative will have, it is important to first distinguish between the types of decisions your organization will be facing.
Distinctions and Definitions: Governance & Management, Routine & Emergent
Governance vs. Management Decisions
- Governance: the strategic task of setting the organization’s goals, directions, limitations, and accountability frameworks
- Management: the allocation of resources and overseeing the day-to-day operations of the organization
Routine vs. Non-programmed Decisions
- Strategic Decisions: affect the long-term strategy and goals of the business
- Tactical Decisions: focus on medium-term goals, push towards longer-term strategy
- Operational Decisions: shorter-term, build toward long-term goals
Examples of Decision-Making Processes: Consensus
The consensus process (shown in the chart) is one of the most popular governance options for cooperatives. Consensus does not require an unanimous decision, but requires everyone in the group to commit to common goals.
The Bay Area Arizmendi bakeries are governed by consensual decision-making, although they will hold a 75% majority vote if a decision is time sensitive and consensus cannot be reached. It is also very important to define what constitutes a “block” or objection for your cooperative. Is it simply that a member disagrees with the proposal or does a block require a higher threshold than personal opinion, e.g. that the proposal is harming or moving the cooperative backward.
Pros:
- All members of the group are heard, and their concerns are taken into account
- Decisions are often better, and more complex
- Group unity and cohesion is improved, and nobody is left behind
Cons:
- Meetings can be long and inefficient
- The loudest members of the group might get an unfair amount of resources/time
- The organization might fall into a “business as usual” trap when the membership is too afraid of endangering their jobs to make needed change
Examples of Decision-Making Processes: Representative Decision-Making
Not all cooperatives make their decisions by general consensus; many have an elected body that makes decisions on behalf of the cooperative. For example, Wisconsin’s Viroqua Food Coop is run primarily by its board of directors. This seven-person board meets monthly, and even has the power to call sessions that are closed to the membership.
Pros:
- Efficient executive legislative body
- Sense of democracy and inclusion
Cons:
- Executives can be corrupt and inefficient
- Minorities are often underrepresented in governance
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