Arizmendi Association of Cooperatives
           (The cheese board n.d.) In 1971, The Cheese Board, a small cheese shop in Berkley California sold ownership to its employees, creating a fully cooperative business. With a high standard work ethic and democratic governance, The Cheese Board quickly found success. The co-op expanded to include an espresso bar and cooperative bakery, and the collective opened an accompanying pizza shop a few doors down the street. Capitalizing on its success (About the association n.d.), the collectively shared knowledge gained over the years with an aspiring group that founded the Arizmendi Association of Cooperatives in 1996. The following year, Arizmendi opened the first bakery in Oakland based on The Cheese Board’s production model, the association has continued to successfully grow and now has 6 bakeries in the Bay area.
           Their model has proven very successful, and through the Arizmendi Association’s website, anyone can learn and apply the knowledge they’ve gained through the years in developing their cooperative.
What does worker-owned mean?
           (Scrivener, 2013) “Everyone in a cooperative is both worker and an owner.” In the bakery’s example, everyone contributes to “baking, cleaning, making scones, and working in the registers.” The team members all contribute to the management, in some models a system of seniority is implemented in making final, or emergency decisions, while others are entirely democratically run. For the most part, however, everything is shared equally by the associates. In the case of Arizmendi, everyone shares equally and has equal rights to vote.
Benefits of a Co-op
            One of the major benefits of belonging to a cooperative is that people understand their responsibilities, which are spread equally to all, and contribute equally to the success of the business. There is no “top” position to strive for, so all members stand equally. Conversely, as an employee there is less stake in the operation’s success, leading to greater rates of turnover.
           Working at the Cheese Board (positions available at the cheese board collective, 2022) has amazing benefits: “members work together in a close-knit environment and are involved in every aspect of operating the business,” “and are paid a living wage, $30 (US) per hour.” On top of their base wage, “all worker-owners receive a share of the profits.” They also provide medical benefits, dental insurance, and a retirement plan. Another nice benefit is a 4-day work week!
           Perhaps the biggest benefit of all is more than one person responsible for fundraising to start the business. To quote Brenna Houck, (Houck, 2018) “A single person may not be able to raise $100,000, but 10 people together might be able to, from their own resources and friends and family.” Community drives all aspects of a co-op business, and that is powerful.
Challenges
           For all the benefits there are certainly challenges to cooperatives. One of the most poignant is the fact there is no boss, as Houck discussed with a member of the co-op Blue Scorcher in Astoria, Oregon, “We’ve had several people who came in and were just gobsmacked when they realized that there was no clear boss and there was nobody to play the role of the sheriff.” Being a contributing member of a cooperative organization means responsibility, self-sufficiency, and willingness to collaborate and be forward with your peers.
A cooperative may not be for everyone, but as all these bakeries have proven, it is a viable and perhaps preferable option in many cases.
References
(n.d.) About the association. http://arizmendi.coop/
Marrafino, Joe. (2010, April 24) The replication of arizmendi bakery: a model of the democratic worker cooperative movement. Grassroots economic organizing [Newsletter]. https://arizmendi.coop/wp-content/uploads/2015/03/The-Replication-of-Arizmendi-Bakery_-A-Model-of-the-Democratic-Worker-Cooperative-Movement.pdf
The cheese board: a worker-owned collective since 1971. The cheese board collective.https://cheeseboardcollective.coop/about-us/about-main/
https://cheeseboardcollective.coop/wp-content/uploads/2022/02/Collective-Hiring-Notice-20220118.pdf
Scrivener, L. (2013, June 6). An inside look at worker-owned arizmendi bakery. Food First. https://foodfirst.org/an-inside-look-at-worker-owned-arizmendi-bakery/
Houck, Brenna. (2018, May, 21). Want better working conditions in restaurants? Build a co-op. Eater.https://www.eater.com/2018/5/21/17369640/co-op-restaurants
18 April 2022 at 1:25 am
A cooperative business is a private business or organization that is owned and managed by member-owners who benefit from its goods or services. The co-ops lie in business control and ownership. The co-op business can provide greater transparency in the operational processes of a business. Cooperative businesses offer a unique link to communities because the member-owners are typically concentrated in a specific community. The social and economic benefits from the cooperative to members can enhance community well-being in good ways. Cooperatives play an important role in reducing poverty. All cooperatives, social or economic, are ideas that ensure the growth and prosperity of communities. Co-ops organize all over the world because they can help in almost every circumstance.
In your blog, both of you explained the importance of converting a business into a cooperative by taking a successful example of the Arizmendi group of Associations. From your blog, it is easily proven that turning businesses into cooperatives will be helpful for institutions in growth, as the Arizmendi Association of Cooperatives did.
I think the fact can not be denied that a cooperative business isn’t for everyone.
If a firm is worker-owned, where everyone has the right to make a decision, don’t you think it will create problems in decision making? What are your views on this? cooperatives are based on the profit of members and owners, so how they can get the financial support from others like investors?. you wrote that A cooperative business isn’t for everyone, I think that to run a proper business an organizational structure is very important, so if cooperatives do not have this, how they are going to run? One benefit of working at Cheese Brand which I liked is 4 days of work a week. Due to this, the employees can easily give time to their families. As the most prominent challenge is having no in-charge of members, this may greatly affect the firms. An experienced person is needed who can guide the peers.
Both developing and developed nations depend on cooperatives because these are empowering model that promotes collective social change. As it is said by Joseph Ventura, Cooperatives help in the most powerful ways. With strong community support and the right foreign help, the eradication of extreme poverty becomes easily feasible.
References,
Staff, G. (2021, October 28). What is a cooperative business? Guru. Retrieved from https://www.guru.com/blog/what-is-a-cooperative-business/
Majee, W., & Hoyt, A. (2011). Cooperatives and Community Development: A perspective on the use of cooperatives in development. Journal of Community Practice, 19(1), 48–61.
18 April 2022 at 7:48 pm
Thanks for the review Deepak. There are certainly challenges with cooperatively run businesses, and within those is the beauty of it. To answer your questions is to answer the very workings of cooperatives.
If a firm is worker-owned, where everyone has the right to make a decision, don’t you think it will create problems in decision making?
– Yes, there will be problems as not everyone will agree on the same things, but that is how democracy works. Everyone is entitled to a vote, and depending on the structure of the organization, majority rules, or unanimous decisions must be met. The fact that there is no one manager or boss making the decisions is why cooperatives can be amazing; it is a group of like-minded individuals creating a community where everyone benefits equally.
Cooperatives are based on the profit of members and owners, so how they can get financial support from others like investors?
– Investors are the people who make up cooperatives. By definition, you are not part of a cooperative unless you pay for a membership, or in the case of joining a cooperative business as a co-owner, an investment in the company must be made. The Cheese Board for example was sold by its two proprietors to the employees for a total of $100,000 which was equally split by each employee willing to buy into the business. They began holding regular meetings, daily and monthly, to collectively make decisions. Just because a business is a cooperative, doesn’t mean investors can’t buy into a business, the difference is
that the decision must be democratically decided by the co-owners rather than a sole-proprietor or board members’ decisions.
Organizational structure is very important, so if cooperatives do not have this, how they are going to run?
– This is what defines a cooperative. The structure is that everyone is equal and has an equal share in voting rights as well as economic gain. Everyone member must also pay their dues, and work regular hours equal to their team members, who all hold each other accountable.
“As the most prominent challenge is having no in-charge of members, this may greatly affect the firms. An experienced person is needed who can guide the peers.”
– If this example of yours were to occur, then the business would no longer be a cooperative…
19 April 2022 at 2:27 am
Your article was amazing reflecting how people cooperated with each other and converted a small bakery into small bakery chain. They started with a small bakery and now having 6 thriving bakeries in Bay Area. On their 20th anniversary, the Arizmendi Association of Cooperatives planned to expand and diversify their business beyond bakeries (Arizmendi Association of Cooperatives, n.d.).
The start of this idea was a major risk because one bad decision could end up the whole business. There are various advantages and disadvantages of cooperatives. The advantages of cooperatives are that it is easy to form a cooperation in the business, it provides roots to democratic management which helps in taking decisions only after getting majority in votes, the liability stand limited to the profit share of members, it provides stability to the business, a major advantage is the motivation as employees know that the more profit they will generate, the more profit share they will get.
Along with this, there are various disadvantages of cooperatives as well. The cooperative businesses face the issue of limited capital as everyone is working there as an employee, inefficient management as everyone is not skilled in management, differences and factionalism among members, the rules and regulations are rigid, when everyone is in board, the decision making takes time, etc (Siljak, n.d.).
At the end, cooperative societies play a crucial role in providing strength to small businesses and help everyone contribute themselves together in the success of business.
References:
Arizmendi Association of Cooperatives. (n.d.). About the Association. Retrieved from Arizmendi Association of Cooperatives: https://arizmendi.coop/
Siljak. (n.d.). Advantages and Disadvantages of Cooperative. Retrieved from Economics Discussion: https://www.economicsdiscussion.net/difference-between/advantages-and-disadvantages-of-cooperative-society/31771