Report Outline

A Co-operative Economy

Sources of Finance

o Once the employees collectively are the entrepreneurs of the firm itself, expect capital
finance to come from the entrepreneurs individually.

Employees individually do not have personal access.

It would be unwise to invest individual savings heavily in the enterprise, which they
are employed,

They will not have individually differentiated and realizable stakes in the enterprise.

Misunderstanding on the whole concept of cooperatives.

Capital and labor are distinct factors; thus, it would be surprising for both to be
supplied by the same group.

Investment finance from a free capital market.

2 forms of investment in cooperatives

These are the two main forms of investment cooperatives use:

1. Fixed Interest investments will be modeled on the present form of obligations and
present no new problem. Fixed income refers to any type of investment under which
the borrower/issuer is obliged to make payments of a fixed amount on a fixed
schedule
2. Equity-type ownership of a stake or essentially busying a portion of the company. Thus this
entitles the bearer to receive all of the profits of the enterprise.

o Motive:
Make a distribution of suitable size essentially to maintain a reasonable price for the
companys obligations on the capital market.

Summing up
o

Financing of industries and enterprises would be less different from present arrangements.

Competitions between cooperatives will provide an incentive to new investment; natural

desire of each cooperative to maximize income per head and protect future employment

Governments excluded from heavy industrial involvement by nature of market socialist

settlement.

Review in transition: comparing the rational investment behavior of workers cooperatives with
the rational behavior of idealized capital enterprises
o

Worker cooperatives arguably would suffer lower productivity than their capitalist
contemporaries and so would fail to survive in competition.

Failure is blamed on less efficient management and deficient investment.

Open question: whether the favorable effects on productivity of better motivation and
enhanced credibility of managers

Even if the advantages to productivity outweigh the drawbacks, workers cooperatives still
might not prosper in a capitalist economy.

Cooperatives in the Capitalist Economy

Maximizing Labour Productivity
o

Sceptics assess that workers cooperatives is less productive in their workforce because of its
direct interest in maximizing labor productivity.

Capital markets' irrational discrimination.

Predicted lower productivity in workers cooperatives.

Coops are arguably more likely to suffer lower productivity than their capitalist
contemporaries.

Possible reluctance to invest in expansions.

Presumed soft-heartedness about laying-off redundant workers.

Possible reluctance of workers co-operatives to invest in expansions than conventional

firms to take on new labour.

Trade Unions
Trade unions are a response of labour to the capitalist entrepreneur.
o

Potential performance of co-operatives and idealized capital firms compared to the macro
level.

Politically inevitable response of the suppliers of labour.

Social advantage in abstention from collective bargaining.

Collective
Favouring
workers and their families who predominate
Individual in the electoral process.
Bargaining

Bargaining

A different standard of performance

o

Were expected to be at the era wherein there is continuous stability of the economy for this
impressive growth without an accelerating rate of inflation.

Collective bargaining has advanced to the point where there is no return on the capital
assets employed in industry and commerce.

Alarming discrepancy between private and social goals which collective bargaining
caused.

More and more enterprises driven to turn to government for investable funds.

No permanent solution because government is prevented to simulating the behavior

of a competitive capital market by the political constraints

Would the Workers Co-operative Economy Tend to Under-employ?

We typically define underemployment as underutilization, over-qualification.
o

2 questions

Would the workers co-operative, at the micro level, tend not to recruit new
employees and members where a convectional firm would?

Cooperatives might be expected to reject where a conventional firm

would d go ahead.
Cooperatives are less inclined to new investment which would increase
employment without the increase of distributable rewards per head.

If yes, would that imply a higher tendency to higher underemployment at the

macro level of the economy as a whole?

Distinguish this unemployment from other causes such as structural

and frictional, regional, voluntary and so forth.
o

There can be no long-run demand deficiency

Anyone unemployed could be employed.

New co-operatives could be formed to exploit the market.

Friction in enterprise formation

o

In order to preserve the important competitive condition of freedom of entry for new
enterprises, a threshold size of enterprise measured by number of employees is suggested.

Creation of new enterprises fill market gaps and exploit new technologies

Provision made for conversion of privately owned enterprise into a workers co-operative
when the threshold size is reached.

A tendency to under-employment will persist because the modification in the company law
where new era would be accomplished introduces a friction into the operation of the
classical labor market.

How big can Cooperatives afford to be?

o

Co-operatives are suggested to work best when they are small up to a maximum of 1,000
members.

Their supposed advantage evaporates as size increases.

Too large, loss of effective co-operative functioning.

Example is in the UK 9 million (data c. 1973) employed to enterprises too large for
effective functioning

Research (Prais) concludes that aggressive and competitive economy requires systematic
series of policy measures aimed at tilting balance regardless of firm size.

Encourages individual plants to run as independent businesses rather than as

subsidiaries of a distant office.

General conclusion:
the present state of knowledge does not warrant the automatic assumption
that workers co-operatives cannot work above a certain size which size is too
small to accommodate modern industrial realities.

Issues regarding Monopolies

Statutory monopolies

Whether such component competitive enterprises would be too large for

organization as workers co-operatives is no more than a special case of the general
question of size.

Technical monopolies

Special case of public monopolies.

Would trade union monopoly power really wither away?

Critical question for the whole argument for a co-operative economy as viable
alternative to our present supposedly doomed political economy.

Reasons to that industry-wide monopolistic behavior by organized workers would stop

1. It would be politically possible to make such behavior illegal

2. Politically and operationally easier to enforce such anti-trust legislation
3. Possible to drastically reduce the governments role as direct employer
4. Workers organized into co-operatives would have less need for trade unions.
5. Collective bargaining would disintegrate under the pressure because of the co-operatives
interest of maximizing income per head rather than conventional profit and hesitancy over
increasing its membership.

Company Profile: Obimapp Incorporated & IV Offshore

Obimapp Incorporated
Based in Manila Philippines, Obimapp Inc. currently provides customer service and technical
support for UK firms whose lines of business cover Finance, Technology, and the Service Sector.
Obimapp is composed of high-end programmers and developers, search engine optimization
strategists, as well as customer service and technical support specialists.
The Firms focuses on the following areas:
o

Business Outsourcing
Obimapp Inc. delivers Business Outsourcing services that are flexible and dynamic, designed
specifically at the level of the clients' preference.

Software Development
Obimapp Inc. focuses on assisting enterprises in leveraging their existing IT investments,
automating transactions and streamlining processes that will add functionality that is
unavailable through generally available applications.

Web Design
We are aware of the importance of your website as a key channel to attract potential clients.
We offer a strong branding presence to clearly define your business, whilst making it
professional, informative, attractive and functional. The designs, layout and other attributes
are based on your specific business requirements offering personalised customisation.

Web Development
We are able to provide a customised content management system that allows you to update
website content easily within the provided browser based interface, making data entry quick
and efficient. We can layout resources such as forms or documents for the easy accessibility
of the users. We can also manage programs, applications and projects for clients.

Search Engine Optimization

Search Engine Optimization (SEO) is considered as the most effective marketing tool for
websites today. We can increase the visibility of your company website, utilising innovative
tools and resources
o

Customer Support Solutions

Obimapp Inc. understands customer behaviour in making decisions and purchases, therefore
applying this to the telemarketing techniques and lead generation programs that are utilised

Goal: Aligning Business Solutions with your Company's Overall Business Goals
Obimapp offers business solutions to help organisations regain control over their IT
resources. Our business solutions assist in making these organisations discover their true potential in
a competitive IT-influenced market. We enable companies to take control of their IT expenditure by
utilising the resources which Obimapp provides.
Our Vision
o

We aim to become the leading Business and IT solutions provider in the United Kingdom.

Our Mission
o

Our mission is to provide Business and IT solutions across web design and development
encompassing search engine optimisation to the highest standard possible so that we can
exceed our clients requirements and expectations.

Brief History
o

Started in 2010 with its first office at LKG Tower, Ayala Ave., Makati.

On March 2011, relocated to its current address, Multinational Bancorporation, also in

Ayala, Ave., Makati.

Started with 5, now expanding, with 85 people as of today.

Started mainly focusing on IT, eventually expanding with the addition of a contact center
department, and venturing in marketing, SEO (Search Engine Optimization) and recruitment.

IV Offshore
IV Offshore is a specialized recruitment firm and employment business focused on the global
offshore and subsea employment sectors. The areas covered by IV Offshore include: provision of
ROV Crew, Survey & Inspection, Marine Renewable Energy, Offshore Construction and Drilling &
Exploration.
We are on the PSL lists for Modus, DOF Subsea Asia ,Reef Subsea, Oceaneering, Technip and
Canyon but to name a few. We have offices in the UK and the Philippines which means we have 24
hour coverage of client availability which puts us at the front of being able to help our clients with

crewing requirements both long and short term and emergency requirements in the case of crew
having to pull out on the day of deployment.

Which is the best model to represent the organization?

First, well have to consider the following factors: (a) The Company depends on outside
factors particularly the specific business need of its client, as it is a business solutions provider. (b)
There is frequent technological and product change. (c) It requires employees who have solid
foundation in their field of expertise and good working dynamics.
Thus the most applicable theories would be Socio Technical Systems and Contingency
paradigm.
Socio Technical Theory & Contingency Theory
Socio Technical Theory
The socio technical theory states that both the technical and social systems are independent
of and with one another. Also, it points out that social interaction and relationship is important to
employees. This is actually the same with the company. Since it functions as a business solutions
provider, it requires people to have chemistry, which would likely boost their productivity and
motivation. Working together in groups has caused employees to incorporate each other as friends
and into their personal lives, some to even an extent of becoming god parents to their children. This
factor boosted their group working dynamics because it enabled them to be more comfortable with
each other.
Outside of the group dynamics, there is also the importance of reaching to their clients and
forming good working relationships to gain their trust.

Contingency Theory
This paradigm states that, though there is no best way to design organizational structures,
the best way to organize a firm depends on the nature of the environment to which the organization
must relate. This applies to the nature of the companys business because it needs to adapt on the
ever-changing needs of its clients as far as business solutions is concerned as well as their demands
on how they want their solutions to be done.