Chapter 11.4.

👉The table of contents so far is here.

Chapter 11: Planned Economy and Corporate Forms

11.4. Corporate internal structure -part 2-

In contrast to socially owned production enterprise, where management and labor are separated, self-managed production cooperative is structured so that workers themselves are involved in management. For this reason, in a production cooperative, the general meeting of members, made up of all members, is the highest management body.

One question is what size of company is possible for such self-management, and the maximum is thought to be less than 1,000 members. It could also be more limited to a level of 500, but this is left to a policy decision.

For a production cooperative with more than 500 members, if it is not realistic to regularly hold general meetings with full participation, it should be allowed to establish a member representative council similar to the worker representative committee of a production business organization. Even in cases with fewer than 500 members, proxy participation by power of delegate should be permitted.

In any case, in a production cooperative, members are directly involved in management through general meeting, but since it is larger than small business, it needs a board of directors as the body responsible for management. Directors are elected by and are subject to supervision by the general member assembly. Regarding the audit system, even in a production cooperative, a distinction is made between operational audits and environmental audits, with permanent operational auditors and environmental auditors appointed to correspond to each.

However, for large enterprises with more than 1,000 members, the production cooperative model is no longer sufficient to govern them effectively, and it is necessary to recognize a production business corporation model similar to a socially owned enterprise. Therefore, as the number of members increases, a production cooperative may be converted into a production business corporation.

In this large enterprise format, management and labor are separated, similar to a production business organization, and a permanent management committe and a workers' representative committee are established. The rest of the internal structure will also be similar to that of a production business organization.

On the other hand, for micro-enterprises with fewer than 20 members (the required number of members is determined by policy), the production cooperative model may not be flexible enough. In such cases, a system such as a cooperative labor group would be more appropriate to allow for more flexible cooperative relationships. In this case, apart from having at least one auditor (there is no need to distinguish between an operational auditor and an environmental auditor), the internal structure of the company is left to the discretion of the members, and management can be decided by consensus of all members or by consensus of several secretaries.

👉The papers published on this blog are meant to expand upon my On Communism.

Chapter 11.3.

👉The table of contents so far is here.

Chapter 11: Planned Economy and Corporate Forms

11.3. Corporate internal structure -part 1-

In the previous article, we looked at two main types of communist enterprises: a socially owned public enterprise (production business organization) and a self-managed private enterprise (production cooperative). From here, we'll delve deeper into the internal structure of these enterprises.

First, a socially owned enterprises, which also form the core of planned economy, is the largest in terms of corporate scale, comparable in size to the combined efforts of all the major companies in a single "industry" in a capitalist economy.

In running a such large-scale enterprise, it is practically impossible to integrate labor and management in a self-managed enterprise where the workers themselves are in charge of management. Therefore, as with joint-stock companies, management and labor must be separated.

As a result, a management committee, equivalent to the board of directors of a joint-stock company, is established as the body responsible for management. However, due to the large scale of the enterprise and to ensure democratic corporate governance, they do not have a single-person top executive such as a CEO; instead, they use a consensus-based system centered around a management chairperson.

When we talk about the separation of management and labor, we do not mean the capitalist command-and-control relationship between labor and management, but rather the establishment of a system of co-determination between management and labor. Such co-determination systems have long been introduced in progressive capitalist countries, even in joint-stock companies, but the reality is that such co-determination has effectively become a mere formality due to the hierarchical relationship between labor and management.

In contrast, in communist public enterprises, to make co-determination a substantive system, a permanent workers' representative committee made up of worker representatives is established, and in areas related to working conditions and benefits in particular, a joint resolution by the management committee and the workers' representative committee is required for a proposal to be valid. For other proposals, the management committee must also disclose them in advance to the workers' representative committee, guaranteeing the opportunity to request that they be co-determined insofar as they relate to working conditions.

Incidentally, communist enterprises generally do not have an owner's body equivalent to the general shareholders' meeting, which is the general supervisory body of a joint-stock company. However, in the case of socially owned production business organization, the ultimate owner is the people, so the people's representative body becomes the ultimate owner's body, but this is largely merely political and symbolic, and in practice the general staff assembly is the general supervisory body. Therefore, the members of the management committee and workers' representative committee are both elected by the general staff assembly, and the activities of both bodies are overseen by the general staff assembly.

However, because a production business organization is large, it is technically impossible to hold a general meeting with everyone's participation, so a representative system based on general assembly delegates will likely be used. The method of election of these delegates may be by lottery or voting, with each company being able to choose.

Finally, an operational audit committee will be established as an auditing body equivalent to the board of auditors of a joint-stock company, but this will primarily act from the perspective of compliance with laws and regulations.

In addition, under the sustainable planned economy, it is also necessary to establish an internal audit system for corporate activities from the perspective of environmental sustainability, so an environmental audit committee will be established as a permanent entity separate from the operational audit committee. The members of both audit committees are also elected at the general staff meeting.

👉The papers published on this blog are meant to expand upon my On Communism.