Economics and management of enterprises

Citizen corporation as a form of social enterprise

Economic Annals-XXI

Economic Annals-ХХI: Volume 162, Issue 11-12, Pages: 62-67

Citation information:
Slintak, K., & Tuckova, Z. (2016). Citizen corporation as a form of social enterprise. Economic Annals-XXI, 162(11-12), 62-67. doi: https://doi.org/10.21003/ea.V162-13

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Karel Slintak
PhD (Economics), Ing.,
Department of Enterprise Economics,
Faculty of Management and Economics,
Tomas Bata University in Zlin
5139 Mostni Str., Zlin, 760 01, Czech Republic
slintak@fame.utb.cz

Zuzana Tuckova
PhD (Economics), Ing.,
Department of Enterprise Economics,
Faculty of Management and Economics,
Tomas Bata University in Zlin
5139 Mostni Str., Zlin, 760 01, Czech Republic
tuckova@fame.utb.cz

Citizen corporation as a form of social enterprise

Abstract. This article focuses on whether it is possible to create a more democratic corporate environment without a company losing its economic efficiency. For this purpose a case study on the company W.L. Gore & Associates has been undertaken. The purpose of the study was to find out if the organisational practices within this company have features similar to those of a citizen corporation as a potential example of the concept of social enterprise. The study has shown that W.L. Gore & Associates which employs over 10,000 people at 45 plants located around the globe is a company built on democratic principles of freedom, personal commitment, fair play and participation. At the organisational level, the company has a lattice structure, which is not based on any form of formal hierarchy, branched levels of management or lines of communication. There are no managers, executive officers, bosses or directors in W. L. Gore & Associates. There is only a handful of formal functions such as the Chief Executive Officer, as required by law. However, you will not encounter this terminology in practice within the company, as it contradicts the egalitarian ideals of Gore. What is typical for the organisational and cultu­ral environment in W. L. Gore & Associates are so-called natural (dynamic) hierarchies. A person does not become a lea­der in W. L. Gore & Associates as a result of being appointed by a higher leader, however. Leaders emerge from those whose authority is recognised by their colleagues.

The key organisational units are small, autonomous and self-managed teams that reflect the economic, as well as social, dimensions of doing business. The network form of organisation and the interconnection between the economic and social dimensions of the business have created a working environment in which natural leadership develops, a system of mutual assessment and remuneration exists, which values collegiality and personal commitment, and creates feeling of a shared purpose in the form of co-ownership. All these characteristics are similar to those found in the citizen corporation.

As a result of fifty years of management innovations, the organisation structure of Gore evolved into a form that is so unique that it defies the conventional view of business organisations. In this model, the basic terminology describing the reality within this company has changed completely. W. L. Gore & Associates has no employees. It has associates. There are no jobs. There are own commitments. The company is not run by managers. The company is managed by leaders. Profits are not resources belonging to a select interest group. They are shared wealth and a reflection of personal responsibility. These unusual characteristics, which noticeably resemble those of the citizen corporation, shows that it is possible to organise businesses in a way that leads to the development of social capital while creating economic value.

Keywords: Citizen Corporation; Social Enterprise; Democracy; Lattice Structure; Management Innovation; Personal Commitment; Social Capital; Trust; W.L. Gore & Associates

JEL classification: L31; M14; O30

Acknowledgement: The study was supported by the Programme EEA and Norway Grants for funding via grant on Institutional cooperation project No. «NF-CZ07-ICP-4-338-2016».

DOI: https://doi.org/10.21003/ea.V162-13

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Received 21.10.2016

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