The four necessary characteristics of open business formats

A compilation of insights from Abhijit A Prabhudan:

“Open business formats in any legal form have to focus on four aspects as identified for them to exist. The four broad aspects being purpose, ownership, governance and transactions exchange. Absence of focus on any of these will make the organized activity not different from existing firms or top down bureaucracies.

* Purpose

Why the business venture exists? Clearly defined and evolving . As opposed to traditional firms or bureaucracies, open business formats will have purpose of commons based peer production, economic provision of needs, research, innovation diffusion, product development, meaningful productive occupation for members as Mark Bonchek conceptualized job entrepreneurship, user value creation by imputed production, not for profit benefit generation. Individual motivation depends on how participants relate to evolving purpose apart from other factors such as rewards and recognition.

* Ownership or stakeholding pattern

Has to be generative stewardship, multi-stakeholding with adequate role for individuals and institutional forms such as community land trusts, also following peer property principles. Cooperatives, collectives, coworking spaces and neoguilds should evolve in direction of open cooperativism.

* Governance

Involves both higher strategy making and regular coordinating for operations. Practicing self management without corresponding stakeholding pattern is moot. Workplace democracy without workers ownership is sham. But media is obsessed with Zappos, Github, Buffer, Valve among others which are shareholder owned for-profit corporations.
Open business formats can adapt methodologies such as self management institute’s colleague letter of understanding, cocoonpro’s liquido, open allocation, worker’s councils, direct and liquid democracy tools, useful methods from sociocracy and holacracy for strategy making, collaboration, coordination, decision making and all kinds of regular operations. Self management practiced will be differ in case of shared work spaces compared to geographically dispersed work spaces.

Open business formats will also apply and utilize modern tools and techniques such as service design, standard operating procedures, quality assurance, design and innovation frameworks for their operations.

* Exchanges for internal and external transactions

Not just monetary transactions for marketplace but polyeconomy as envisioned by Elf Pavlik.

Open Value Network, Network Resource Planning points to better way to measure economic activities. Modern technology enables granular accounting using blockchain, smart contracts, and cryptocurrencies. Open business formats as organized economic nodes should focus on not for profit generation of user value. Reciprocal licensing is a key leverage to extract resources from old economy for building the new economy.”

3 Comments The four necessary characteristics of open business formats

  1. David Week

    “Workplace democracy without workers ownership is sham. But media is obsessed with Zappos, Github, Buffer, Valve among others which are shareholder owned for-profit corporations.”

    If an organisation has a social or common good purpose, then perhaps it should not be controlled by the workers.The most common social enterprise model is:

    • paid workers who run operations
    • unpaid, independent directors who ensure that the operations continue to adhere to purpose.

    When the paid workers also govern, the risk is heightened that self-interests starts to bias or even overwhelm the original purpose.

  2. David Week

    In theory, yes. In practice, you run up against the problem of overhead/bandwidth. Already, we have problems getting citizen engagement and understanding in local, state and national government. If then start to load each person up with a governance role in everything in which they have a stake, they may be unable to fulfil such a function well. This is what is/was interesting about liquid democracy: it recognised such problems.

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