Cooperative Enterprise Presented by John Lewis - Essay Example

Report on John Lewis cooperative enterprise The report discusses the John Lewis cooperative enterprise. The report goes ahead to give reasons why the enterprise should be chosen as the enterprise of the year 2012. The report also seeks to analyze how this entity applies and conforms to the seven cooperative principles, assessing how well they have been implemented and how they have supported the enterprise to be in its present form. The organization and management of the paper will be addressed in this report, through observing how the enterprise is arranged in hierarchy, and the nature of its legal structure. The nature of the relationship between John Lewis cooperative enterprise as an organization and its staff is also a subject of this report. This assesses the relationship in aspects such as how the organization motivates its employees, the nature of ethical values and incorporation of employee diversity within the organization. Employee training and reward system will also be addressed by this report. The report also recommends on the appropriate ways of improving the nature of the enterprise as well as its mode of undertaking business. The recommendations given are justified based on the observation made on the nature of the business structure and the manner of conduct of its business. Finally, a conclusion is given in line with the major issues discussed about the enterprise. Introduction John Lewis cooperative enterprise is a partnership of departmental store and supermarkets (). It is a public limited company, which is owned in group by its employees (Pearce, 1993 p6). This collection of employee group ownership is referred to as partnership. The management of the cooperative enterprise manages the business on behalf of the employees, who consists of the bunch of previous and retired employees who are still shareholders in the business and the current lot of employees. There is also a provision for the admission of the future employees of the organization into the partnership and ownership of the enterprise (Chris, 2008 p126). John Lewis cooperative enterprise is arguably the best employer in the United Kingdom, with its unique characteristic of having the whole business entity owned by the employees of the organization itself. The employees receive a share of profits of the organization in terms of cash bonuses. The enterprise is ranked the best in employee motivation, a fact that makes them offer high quality services to their customers. The fact that the employees are still the owners of the enterprise makes them address the issues of the organization as its owners. Thus, the chances of the enterprise failing because of poor employee performance is non-existent (Pearce, 1993 p8). Due to the sense of ownership possessed by the employees, they offer their customers a friendly and helpful service. This aspect has been one of the competitive edge the enterprise has, over the other business entities that operates in the same field (Chris, 2008, p129). There are some reasons as to why John Lewis cooperative enterprise should be rewarded as the best co-operative enterprise of 2012. The enterprise has always sought to provide its customers value for their money (Billis, 2010 p16). This, the enterprise does by offering its customers the best services that they can rarely find elsewhere. Consequently, the enterprise has afforded to create a high level of customer loyalty and created highly valued goodwill. The fact that the company affords its company the right motivation and care, qualifies the enterprise for the award of the best co-operative of 2012. Aside from the excellent services offered by the company to its customers, the enterprise offers high quality products at very competitive prices (Pearce, 1993 p13). The growth strategy of the enterprise is yet another reason as to why the enterprise deserves the award. Over the years, the enterprise has consistently grown and expanded its market to different cities in the UK. The enterprise has enacted a constitution that determines its investment strategies. The enactment determines the percentage of the profits made by the enterprise that should be invested every year. The enactment also guides how much of the profits percentage that should be retained as reserves, to balance between the investment and the net assets (Carpentier, 2010 p249). The nature of the organization and management of the business is yet another unique trait of the company, which calls for its rewarding as the best of the 2012 co-operative enterprise. The enterprise is managed at a high level of accountability and transparency, with those involved in management of the enterprise being highly responsible. John Lewis cooperative enterprise exhibits a compliance of the seven principles of cooperatives. Under the principle of democratic member control, the employees of the enterprise have a greater control in the management of the enterprise, in that the constitution of the enterprise requires that any written letter of concern or complain should be responded to, notwithstanding whether it is signed by the writer or it is anonymous. This keeps the management accountable and checked (Billis, 2010 p130). The principle of member’s economic control is well observed by the enterprise, since all the employees of the enterprise, who are still its partner’s benefit equally from the economic gains of the organization. The principle of autonomy and independence is well observed by the enterprise, through having the partners participate in decision making through the institutions of central council and the central board. The principle of education, training and information is not neglected either, since the employees who holds various positions are trained in their respective fields for effective performance (Wyler, 2009 p25). Under the principle of cooperation among cooperatives, the enterprise has fulfilled its obligation by ensuring that all partners work together through management control and monitoring as well as their representation in the decision making institutions of central council and central board (Chris, 2008, p145). Through its corporate social responsibility activities, the enterprise serves the plight of the surrounding communities. This is in line with the fulfillment of the principle of concern for community, being one of the principles required for cooperatives under the seven principles of cooperatives. The management of John Lewis cooperative enterprise follows a three tier structure. At the apex is the central council, who are elected by the employees/partners, through secret ballot. The chair of the council appoints a reasonable number to the central council (Chris, 2008, p138). It comprises of 135 members, who meets six times every year to discuss the wholesome issues of the enterprise and makes recommendations. The role of the central council is to protect the constitution of the partnership. Among the twelve directors of the enterprise, the central council subscribes five members (Spear, 2001 p55). Immediately below the central council is the central board. It is headed by a chairman, and has a total of twelve members. Five of the directors are nominated by the central council, five are nominated by the chairman himself, and the twelfth member is the deputy chairman. The chairman is an appointee of the previous chairman, and serves as the chief executive officer of the enterprise (). In the line of authority, the chairman falls directly immediately after the central board. In the issues off power, the chairmanship is a powerful docket in the enterprise, tasked with the privileges of appointing five members of central board, members of the enterprises’ senior management and up to 20% of the central council’s members (Lynch, 2009 p88). However, the central council can remove the chairman from his position, but only with 84% majority. The power vested in the chairman is so much so that he absolutely controls all the voting shares single handedly (Chris, 2008, p143). The relationship of the enterprise with its staff is a noble one. The enterprise motivates its employees through offering them part of the annual profits as cash bonuses (Pearce, 1993 p12). The provision to allow the employees become owners of the enterprise is yet another aspect of employee motivation. Additionally, the employees are allowed to monitor and control the management affairs through writing letters of concern or complain, either signed or anonymous. Since the chairman of the central board seems to wield a lot of power single handedly, I would recommend that some checks be applied on this. The justification for this is that it may be unhealthy for an organization to have a single person control all the share votes. Furthermore, the restrictions applied against his removal from the position he/she holds should be scrapped. Such restrictions makes the chairman over privileged compared to the rest of the partners, who are still owners of the enterprise. conclusion In conclusion, John Lewis cooperative enterprise is a model co-operative enterprise that needs to be awarded as the co-operative of the year, 2012. In consideration of its management style, relationship with its employees, its adherence to the seven principles of cooperatives, as well as its unique management style, the enterprise deserves the reward. Better still, the constitution of the enterprise is one that deserves emulation, since it provides for employees integration into the business as some of its owners. More so, the constitution provides an avenue through which the employees can check on the excesses of the enterprises’ management. However, the powers accorded the to the chairman of the central board needs to be regulated. Work Cited Billis, D. (2010). Hybrid Organizations in the Third Sector. Basingstoke: Palgrave MacMillan. P14-35. Chris, G. (2008). Life Entrepreneurs: John Lewis cooperative enterprise. p120-145. Lynch, K. (2009). Mission, Inc.: The Practitioners Guide to Social Enterprise. p86-90. Pearce, J. (1993). John Lewis cooperative enterprise at the Heart of the Community Economy. London: Calouste Gulbenkian Foundation. 5-13. Spear, R. (2001). United Kingdom: Labor Market Integration and Employment Creation, in Tackling Social Exclusion in Europe, eds. Spear. P18-64. Carpentier, V. (2010). Community and Mutual Ownership: A historical review. York: Joseph Rowntree Foundation. P208-255. Wyler, S. (2009). A History of Community Asset Ownership. London: Development Trusts Association. P19-27. Read More