Ownership and organisational form

There comes a point when every venture has to decide what organisational form to take, what kind of decision-making and accountability processes to adopt and which kinds of information and financial management systems to put in place. These decisions can be costly and time consuming. But getting it right early on provides structures and systems which act as skeletons that help hold the organisation together. As a rule, the more complex the task, the more there may be a need for hierarchy and formal coordination. Yet strong values and commitment can allow structures to remain flat.

Forms of ownership set out rules related to an organisation’s mission, its governance structures and how its yield is distributed. But ownership can also be how a project mobilises support, encouraging a sense in others that the project is theirs.

In the social economy ownership is an ambiguous concept. Its organisational structures are the site of contending pressures of goals and interests. The organisation may have a social goal of benefitting others, but to do so it involves those with some measure of private interests – finance, staff, suppliers and purchasers. Some may exercise their interests at arms length – and their market or financial power may be such as to reduce the social project to little more than a sub-contractor or agent, severely restricting the autonomy of the owners. But others may seek closer involvement in the project’s direction. How can the forms of ownership and governance accommodate these pressures and turn them to good account?