Has a privately owned business ever turned into a co-op?
Co-ops would eliminate some of the problems of our finance driven corporate business culture, but most businesses seem to start from one person's vision or obsession.
The turning point seems to be when they go public and become a corporation.
Suddenly the original vision to provide a product or service is subordinate to meeting profit goals set by the financial sector, and even if the company is profitable and the product is beloved by the public, if someone in finance thinks they can make a quick buck by killing the company, they can and will.
The same can happen to employees well before the company itself is killed. While an individual owner may have benevolent feelings and policies toward his employees, once it goes corporate, bookkeeping sleight of hand to goose profits take priority over treating them right and even getting the best efforts from them.
I wonder if some of the founders of companies wouldn't be happy with less money if they knew their company would survive with something like its original vision after their active leadership rather than being prostituted and cannibalized.
It would certainly be more likely to survive as a one person (including employees, investors, and even customers) one vote as opposed to one dollar one vote.
Has anyone ever done this and converted a family business or partnership into a co-op?
Is there any effort to convince small businesses this is the better way to expand?
If not, there should be.
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The business was founded in 1864 when John Lewis set up a draper's shop in Oxford Street, London, which developed into a department store. In 1905 he bought the Peter Jones store in Sloane Square. In 1920 his son, John Spedan Lewis, expanded earlier power-sharing policies by sharing the profits the business made among the employees. The democratic nature and profit-sharing basis of the business were developed into a formal partnership structure and Spedan Lewis bequeathed the company to his employees. As of 2011, there are 81,000 partners – the majority full-time – working for the John Lewis Partnership.
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Finally, every partner receives an Annual Bonus, which is a share of the profit. It is calculated as a percentage of the salary, with the same percentage for everyone, from top management down to the shop floor and the storage rooms. The bonus is dependent on the profitability of the partnership each year, varying between 9% and 20% of the partners' annual salaries since 2000. The Annual Partnership Bonus for 2007 was the top end 20%, this is before the recession started. The Annual Partnership Bonus for 2008 was 15% of a partner's gross earnings for the 2007/2008 financial year. The Annual Partnership Bonus for 2009 was 13% of a partner's gross earnings for the 2008/2009 financial year. The Annual Partnership Bonus for 2010 was 15% of a partner's gross earnings for the 2009/2010 financial year.
In 1999, in response to a fall in profits, there were calls from some Partners for the business to be demutualised and floated on the stock market. If this had gone through, each Partner would have been guaranteed a windfall of up to £100,000 each, in order to compensate them for their share of the business. In the end, no one on the Partnership Council agreed with the idea and only one member spoke in favour of a referendum on the issue.
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Financial year Turnover Profit before tax Net profit Partner bonuses Profit retained
2011–2012 £8.73 billion £393.3 million £353.8 million £165.2 million (14%) £188.6 million
http://en.wikipedia.org/wiki/John_Lewis_Partnership
The elder of two sons of John Lewis, who had opened the John Lewis department store on Oxford Street, London, Spedan Lewis joined the business at 19 and in 1914 assumed control of his father's second shop, Peter Jones in Sloane Square, London.
After assuming control of the Oxford Street store with his father's death in 1928, Spedan Lewis officially formed the John Lewis Partnership, and began the distribution of profits among its employees (known as "partners"
in 1929, and completed the move towards employee-ownership in 1950, with the transfer of control to the employees.
Spedan Lewis resigned as chairman in 1955, and was known within the company from that point on as "The Founder". In retirement, he lived at Longstock Park, near the village of Longstock in Hampshire until his death. In accordance with his wishes he was buried at sea.
http://en.wikipedia.org/wiki/John_Spedan_Lewis
