Archive for the ‘Co-operatives’ Category

I work in a Business School: Shut down the Business School

Martin Parker (left) tells us in his new book, Shut Down the Business School (below right),  what we already know. We know that Business Schools are – to use that always unhelpful metaphor – cash cows – for universities the world over. They are a volume business in themselves. They also sell a product – the dream or aspiration of riches with the right formula learned at the Business School.

That definition of riches – or personal wealth – is a capitalist-managerialist one. It is one in which (let me turn this into a powerpoint presentation):

  • bosses boss and everyone else does as they are told;
  • bosses – managers – are worth more than the people who work for them (defined in salary and benefits/perks)
  • managers’ decisions are right (until they are not);
  • meeting or exceeding shareholder expectations is the purpose of firms;

Business Schools are multi-disciplinary – that is definitely a plus – and the aggregate business discipline is a social science. The disciplines, for Parker, are (pp 26-34):

  • Finance (always assuming that earning rent on capital is a legitimate and perhaps even praiseworthy activity, with skillful investors being lionized for their technical skills and success);
  • HRM (not particularly interested in what is like to be a human being);
  • Management information systems (premised on the sensible assumption that high-quality, relevant and timely information is necessary to make high-quality relevant and timely decisions, but agnostic about direction or context of the made decisions);
  • Operations management (aimed at shrinking time and space, and when successful destroys the local);
  • Accountancy (the production of different versions of the truth for different purposes);
  • Marketing (predicated on maximising the number and value of transactions within a given organisation, market or economy, promoting hyper-consumption);
  • Strategy (an attempt to predict the future and shape an organization in such a way that it profits most from what that future looks like).

Economists are spared character assassination, MBAs (the award and the award holders) are not, and there is not much that is good to be said about professional organisations such as Business School accreditation and Accountancy bodies. Government and regulators are also chastised and the universities obliquely for currying favour with them.

Of course, practitioners in these disciplines are likely to be unhappy with these characterisations. But Parker is trying to make a point and breaking a few eggs in the process. For whilst in each Business School there are scholars happily teaching to formula, many are not. He puts himself in the not category as a critical management theorist. These iconoclasts are generally tolerated in Business Schools. And successfully ignored, though their books and papers are, usually, counted in the compilations of league tables of excellence in publishing.

Where is this going?

This book follows the formula for the books that I currently read and review: tell a ghastly story of how it is, and then lead the reader to a new and enlightened future. For the Business School, Parker has a number of ideas. The marketisation of education has turned education into a product. The Business School then provides the customer – students, their parents – with what it thinks they want; namely, the formula for being a manager, creating wealth (for self and others) and “success” (judged against spurious measures).

Parker’s solution is a School for Organising; one that does not view organising and management as synonymous. There is no reason – as demonstrated in countries such as Germany – for workers and their representatives to be excluded from Executive Boards. There is no reason for firms to prioritise shareholders over employees, workers and community. There can be no justification for the raison d’etre of firms to be to externalise pollution and bring about the collapse of civilisation (which is the likely outcome of uncontrolled climate change). The “hollowed-out” state, as we witness currently (writing in the middle of the Covid-19 pandemic lockdown in the UK), has left citizens vulnerable to a virus for want of Personal Protective Equipment, the provision of which in the UK was outsourced and subject to minimal inventory control, something that the managers of the supply companies and the politicians, learned in Business Schools.

The new Business School asks “How can people come together to do stuff”? (p113). What are the alternative modes of organising, both political (for example, anarchy) and business (for example, co-operatives such as wholefood wholesaler, SUMA, pp116-119)? It is truly interdisciplinary – not just within the School’s disciplines, but external, too. Other faculties such the natural sciences and humanities (art and business are very good companions). For myself and my own writing (I am writing a strategy textbook, please get in touch if you want to read it), the natural sciences are the starting point of our business courses. The planetary boundaries are the starting point for organising, not an afterthought. It is the job of the new Business School to alert students to the possibility of alternative ways of organising, evaluation and making decisions.

The disciplines ridiculed earlier are repositioned. “Accountancy is no longer about finding and hiding profits” (p169), marketing works for the people who buy things, not those who sell; operations management correctly prices carbon and other pollutants against speed and price. Economists teach de-growth or reformulate GDP in human terms.

Parker is also aware of the dangers of setting up a School for Organising. Over time, it becomes its own Business School, packed with salaried professionals with pensions detached from the people who are subject to the School’s teachings. There is a need, he argues, for de-schooling (drawn from the work of Ivan Illich), a much more co-operative approach to learning – learning being the operative word. That said, there has to be room for study – a discipline, a task – without which more bad decisions get made. De-schooling to its natural conclusion of no School at all is no panacea. The Business School is politics and politics is about power and the control of resources. There is nothing, however, to say that what the Business School teaches has to be capitalist-managerialist.

Picture: University of Leicester

 

 

 

Food security in the UK – time to worry

Tim Lang (right), professor of Food Policy at City University’s Centre for Food Policy, is the go-to person by the media when food policy and security make the headlines. He was a frequent contributor to BBC Radio 4’s Today programme when it became clear that the UK faced food shortages in the event of a hard Brexit. Reading his latest book, Feeding Britain: our food problems and how to fix them, one can see the extent that he should host the show, not just contribute to it when the headlines demand. Food security in the UK is a big problem, and its fragility has much to do with British exceptionalism, a situation that, in the context of Brexit, is fast receding. This is the first book that I have read that actually makes a credible case for Brexit; it is not intended to do so and it is something that Lang stumbled upon rather than explicitly endorsed. More on that in a moment.

Feeding Britain is published by Pelican Books (below left), an imprint of Penguin/Random House, The imprint publishes work on hugely topical issues in accessible styles. In reading Lang, one senses the haste with which it was written. It is in no way sloppy, far from it, but Lang knows every reference whether it be a long-published academic article, government report or personal interaction. It has inspired me to get moving on my own work. It demonstrates what is possible from a life of accrued knowledge. There are 470 pages of text. Each one is a gem.  Each one leaves the reader out of breath.

Where to start? Actually, it is quite simple – some history basics. Britain’s imperial past is, to put it generously, chequered. It is, seemingly, the origin of the British thought, paraphrased here, that someone else will feed us, so we do not need to bother growing stuff ourselves. The growing is usually done by people in far-away lands, the rural poor, who receive a small fraction of the value of the product ascribed to it by end users, usually in the rich West. And even when fresh produce comes from near neighbours such as Spain, the back-breaking work is done by migrant labour often paid below minimum levels in the country, and affording them a lifestyle far short of that enjoyed by the beneficiaries of their labour. It also comes with a huge carbon footprint, a consequence of mono-culture and extensive transportation.

Coupled with the imperialism argument, the concentration of land ownership in the UK which started with the Enclosures of common land in the 17th and 18th Centuries; annexation of Church land under Henry VIII and more recently, enclosures arising from the privatisation of much of the public sector since 1980. Lang puts a figure on it – 189,000 families own 2/3 of UK land or one-half of England is owned by 25,000 people (p368). This is all made worse by the commodification of land – it is an investment, not a source of sustenance or habitat. 3,660 per cent is the figure by which land values have increased in the last 50 years. This means that, at the very least, it is difficult for small farmers to produce appropriately and sustainably. It forces tenants – and they usually are tenants – to use intensive methods to increase yield and further inflate the value. And on top of that, owners attract production subsidies from the EU – and post Brexit, presumably from UK taxpayers! (That mechanism is described in pages 370-7.)

Allied to the land ownership debate, Lang charts the changing percentage of income people spend on food vis-à-vis other things; notably, housing costs. The land owners, by this argument, not only enclose land and extract a high Gross Value Added from it (relative to the growers), they also own the properties in which the majority live. In extracting more from tenants, the margin has to be squeezed out of food prices (and by definition costs). Cheap food, argues Lang, is then equated with good food (not because it is nutritious, but because it seems to be good for someone else’s wealth). Moreover, the price of food rarely incorporates the externalised costs of production – environmental damage, health and society more generally such as life expectancy (which bad food shortens).

More positively, shortening supply chains would be a positive example of taking back control! And this is the Brexit argument. Though we know only too well, that Brexiters see the extension of food chains as being a Brexit benefit, and with it a reduction in quality, safety and increased insecurity, the UK no longer has the capability to defend those supply chains against hostile state actors or have the global influence to guarantee supply in time of scarcity, unlike in the imperial past. Security is also threatened by cyber attack on those supply chains, something that Lang believes is under appreciated within Government (and society more generally).

Lang argues that the National Minimum Wage or the National Living Wage needs to be re-calibrated to pay for, what he calls, sustainable diets. The factors above have been made worse – and particularly in the UK – by the population moving on to super-processed foods that are high in fat, salt and sugar (HFSS). Again, the costs of this are externalised (the National Health Service costs obesity alone as £6.5bn and a wider societal cost of £27bn – p207). Lang is adamant that an escalator tax on HFSS foods needs to be introduced. Pension funds, too, should divest from firms that manufacture HFSSs. Ad-spend (marketing is also disproportionate relative to health promotion, and it is targeted at children through social media. Lang also argues that the large supermarkets – singling out Tesco with its 30 per cent share of UK grocery market should be broken up.

Lang is not making an argument for growing out-of-seasonal foods in the UK in the middle of winter under lights and heat (even if

cattle

Source: Billy Hathorn

they had taste, which he clearly thinks such produce does not); that does not help the carbon footprint much. Rather, he is saying, that we have to grow more food in he UK (the country produces only 53 per cent of its own food) that is consumable directly and not, as seems to be true of much of arable farm produce in the UK, fed to animals, some of which like ruminants are hugely inefficient converters of plants into meat as well as huge greenhouse gas manufacturers. They fart. A lot. Land use is dominated by rearing and feeding animals. That very process, too, has an external cost that could be fatal in the future, antibiotic resistance as such valuable medicines are routinely fed to animals to retain “yields”.

There are also things about imported foods that I had not thought about. For example, we should not take water for granted, even though the UK is temperate and generally wet. If we import food from countries that are short of water, but whose products are full of it (fruit, vegetables, etc.), there is a net imbalance and a cost to the growing country and its people, nothwithstanding their foreign earning from the produce (often imported by air). Huge volumes of water are in foodstuffs that we do not anticipate, such as rice. Lang’s section on water imperialism is a must-read, pp225-44.

illustration

Cornish Aromatic apples (source: Brogdale)

Lang highlights that the UK produces so little of its own fruit. Whilst many exotic soft fruits are not viable in the UK, apples, pears and berries are eminently feasible and desirable. The population does not get anywhere near 5-a-day fruit and vegetable consumption (which seems truly bizarre and frightening at the same time). On horticulture, in 1950, there were 3000 apple growers in the UK, by the mid-1990s there were 800. Government grubbing regulations facilitated the destruction of orchards through subsidy! (p91). Lang contrasts the UK case with France where small growers and cooperatives are significant suppliers (the cooperatives provide the scale). Scale in the UK is provided by very large and concentrated growers and importers.

Finally, there is an important role for education, not only in terms of teaching children about food, its origins, how to grow it (sustainably), and how to cook primary ingredients, but also in what children are fed at school. Diet regulations for school meals, argues Lang, need to be universal, not just in the poorest, most regulated schools.

OK, I’ve done some hard work on the reading; it is time for us all to do some hard work in changing the way food is understood, used as a political tool, traded and prepared.

 

 

The Co-operative’s new era

cooperativelogoSo, the members have voted to accept the Mynors recommendations for a new structure that will limit the influence of the regional societies. Hence the CEO of the largest of the regional societies, Ben Reid of the Midcounties, has resigned from the national board (now leaving three vacancies). Despite the criticism of Reid, his own society has recently reported revenues of £1.2bn, suggesting they are doing something right and against the trend in the national society with its £2.5bn loss. Reid received particular criticism by Mynors as a member of the Audit Committee of the Co-operative Bank when the £1.5bn shortfall was revealed.

So, we may ask, what is about to happen? Already it is clear that the local societies will no longer occupy their 30 per cent or so of seats. Instead, the intention is to ‘professionalise’ the Board. The new members will be professional executives and no longer voluntary. This business is so big, goes the argument, it cannot be managed by non-professional co-operators. It is indeed they that got the Co-operative into its fix in the first place (see post 24 April 2014: https://weiterzugehen.net/2014/04/24/what-is-going-on-at-the-co-operative/).

The proposals are, according to the Guardian newspaper, the following:  the creation of a board of directors that is qualified to run a business the size of the Co-op; the creation of a structure that holds the board to account; the principle of one member one vote; and provisions to avoid demutualisation.

The latter is quite interesting. It confirms that asset strippers – or carpet baggers as they were known in the era of building societyCarpetbaggers demutualisations in the 1980s- will not be tolerated and will not gain advantage by such conversion. That is inherently a good thing. One-member-one-vote also has merit, though professional Boards do not always practice such equivalence. Structures clearly should be such that executives are held to account. However, more important is the skills mix on a board to know what that means. (As we have seen from Banking, some executives are ‘infallible’ and charismatic, professional or not.) But being a co-operator should not disqualify one from membership of the Board of the Co-operative.

Image and further details about carpetbagging: http://news.bbc.co.uk/2/hi/special_report/1999/02/99/e-cyclopedia/297982.stm

 

What is going on at the Co-operative?

Hull_coop_storeWhen I was growing up there was the local Hull Co-operative Society with its flagship department store (left) in the centre of the City. Local supermarkets were dotted around the suburbs. All rewarded customers with dividend stamps. My grandmother collected them – I built a record collection out of them. The insurance company functioned through agents. As a family, we had various policies. There was even a soft drinks delivery service. The ‘pop man’ caDivi-stamps-4-228x230me on a Monday and delivered a bottle of something chosen by my mother.

The Hull Society basically collapsed in the early 80s. The department store closed leaving a building to fall into dereliction. The supermarkets also closed.

My time in South Yorkshire was punctuated by visits to department stores in Barnsley. And in coop_NuneatonNorwich, the East of England Society plodded on. Not so good in Brighton where the department store closed a few years ago. The shop was eccentric. Land in Brighton, however, is highly prized. The empty shop has not lingered too long. The façade has been retained with student accommodation being built on the land. From what I can see, the most powerful regional society, The Heart of England, still manages department stores. For example in Nuneaton (above left).

It has often been quite difficult to be with the Co-operative. The food shops were always lacking something. The bank, despite its ethical mission, ripped off savers. I left. When I bought a van, the insurance company was one of the few that would insure van as a non-commercial vehicle, but I still needed the endorsement of the agent. A bit of a nuisance.

The Co-operative’s difference was its ownership and management structure. It is notionally owned by the members (I am a member, though clearly insufficiently active) and managed by them.  To quote John Harris in the Guardian, “At the base are around 48 area committees, each with 10 to 12 elected members who put in three-year terms. These people, in turn, elect seven regional boards – which duly elect 15 of the 21 members of the national group’s board of directors. Of the remaining six, five come from big regional Co-ops, and there is also an independent director.” (http://tinyurl.com/n3yjznb) In recent years, the governance structure has failed.

coophq_MenziesThere seems to be something about size. In 2002 retail and wholesale were merged and housed in a hubristic new HQ in Manchester (left). Growth had traditionally been organic – from within rather than by acquisition. Both the bank and the supermarkets seem to have cast that principle aside. The bank failed its due diligence on buying the Britannia Building Society. Had someone looked closely they would have seen ‘sub-prime’ bad debts and walked away. So far the bank has been bailed out to the sum of £1.5bn with another £400m needed. It is now 70 per cent owned by hedge funds and private equity.

The supermarket in 2009 financed a takeover of the failed Somerfield supermarket chain. Somerfield had been a basketcoop_Peter_Marks case for many years, but for some reason the Co-operative’s chief executive, Peter Marks (right), convinced the board that speedy expansion was necessary and a takeover of Somerfield the right vehicle. The Somerfield assets have been written down by over £260m and a percentage will be sold.

Last week the Co-operative announced a loss of £2.5bn. Whilst the bank claims a good part of that, the other parts of the group are also ‘underperforming’. Turning this around is not going to be easy. I for one am not convinced that it will survive as an entity. Some of the more influential local societies such as the Heart of England Society have rejected such a plan put forward by Paul Mynors, now himself resigned from the Board. The AGM on 17 May 2014 will be one to watch.

Ironically, the analogue for the Co-operative, the John Lewis Partnership, is built on department stores and food retailing. Its management structure is very different. It is run as a PLC with the employees, as partners and members, sharing in the profits rather than managing the generation of profits.

Picture credits 

Hull store: http://hullvalley.blogspot.co.uk/2011_10_01_archive.html

Stamps: http://150.co-operative.coop/150-to-150/our-collegues-113

Peter Marks: http://en.loadtr.com/Peter_Marks-493978.htm

Co-op HQ: Walter Menzies

 

coop_Peter_Marks

Co-operatives

Readers of this blog know that I live in a housing co-operative where all members input into the management of the enterprise. Like all forms of organisation, it is imperfect. The structures that facilitate equitable governance can seem bureaucratic. But once established all members have resort to them and unless everyone agrees that they should be changed, they guide the collective towards prudent and non-exploitative management.

Not surprisingly in these recessionary times, co-operatives are very much in the news. Not just in housing, however. Co-operative businesses are much discussed even by this wretched government as a bulwark against forms of capitalism. One can always hear about the John Lewis model without actually understanding what that means. (John Lewis, arguably is a very special example of a co-operatively-owned business.) The capitalists resist co-operative principles because they cannot extract the profit as a dividend. In the days of de-mutualisation of building societies, these people resorted to ‘carpet bagging’ and rewarded us with Northern Rock. None of the demutualised buidling societies now survive. All have been absorbed into failed or failing banks. Halifax became HBOS, Abbey National had to be ‘rescued’ by Santander (Alliance and Leicester and Bradford and Bingley, too).

Peter Day’s current series of ‘In Business’ on the BBC has been exploring co-operative ownship of firms. Here is a link to the latest programme on co-operatives: http://www.bbc.co.uk/podcasts/series/worldbiz

Mike Weatherley MP – not representing Hove and Portslade

Weatherley celebrating criminalisation

My Conservative MP, Mike Weatherley (pictured), is quite a self-publicist. He ‘sends’ me his monthly newsletter in his quest to inform and influence. Increasingly this newletter is used to express his uninformed prejudices which I am increasingly offended by. I am sure that I am not the only one he offends in his constituency. I want to use my blog to make clear to him and others that he rarely represents my interests and I do not want to be associated with his intolerence.

For example from his recent newsletter:

Victoria Gardens campsite

 Having recently been successful with my campaign to criminalise squatting, I have also taken the campers on Victoria Gardens in Brighton to task. Long-term camping in public spaces as a form of protest is unacceptable. The point of the protest was made long ago and it’s now just about a group of lazy campers hanging around for a fun time in front of our Royal Pavilion. This is not something that the public should have to pay for or put up with. Hard working taxpayers have had enough of these freeloaders. After publicly condemning the camp, I popped down to put my concerns to them in person. They claim to represent “the 99%”, so I informed them of the views of the REAL 99% – and told them to tidy up and go home.

Readers of this blog will know that I have posted on the subject of squatting before. Mr Weatherley is quite clearly a fan of the housing Minister, Grant Shapps, who ineptly equates squatting and murder. Mr Weatherley, some of us owe our homes and wellbeing to squatters. The country as a whole owes much to the squatting ‘movement’ such that it is. Moreover, there are not too many bulwarks against the property owning class that Mr Weatherley’s elitist party celebrates. Squatting is one of them in its demonstration of the inequity associated with housing that is a malaise in our society. And I suspect that Mr Weatherley, like the housing minister, Grant Shapps, thinks that he is protecting people who find their houses squatted after they have been away on holiday or business. I do not condone this, but this is rare. Most squatting is targeted at criminally empty properties that can and should be brought into habitation, preferably under some collective ownership and/or management. I would have thought that was a better use of his time, criminalising empty property. Mr Weatherley seeks to criminalise expressions of liberty and freedom in the name of protecting it.

There is more to say about Mr Weatherley.

Giving Northern Rock away

The sale of Northern Rock  to Virgin at a loss to the taxpayer of £450m demonstrates something. First, nothing has been learned from recent experience. All this nonsense about bringing competition to the high street is meaningless in the world of financial services. One would have thought that if the government had wanted to develop competition then a second option might have been better.

That second option might have been remutualisation. Was it not the demutualisation of Northern Rock that got it into bother in the first place? And what happened to the government’s proclaimed love affair with co-operative ownership? I would have thought that mutual ownership was a viable and desirable option. The high street would have benefitted, businesses short of capital might have benefitted? But oh no. The taxpayer subsidises the transfer of a valuable asset – tens of thousands of viable mortgages – to an already very wealthy man. However, Jill Treanor writing in the Guardian on 2 December sees that large sums of money will also be transferred to existing senior managers:

The annual report for 2010 states that:

“The company will operate a long-term incentive plan for senior employees that will deliver financial rewards if the company achieves certain targets over a three year performance period. As the company did not make Ltip [long-term incentive plan] awards in 2010 it is the company’s intention to make awards in 2011 covering 2010 and 2011. The 2010 award will vest in March 2013 and the 2011 in March 2014 or upon successful exit from temporary public ownership if earlier” (emphasis added).

How convenient that the transfer occurs before the close of the year saving all of that unnecessary waiting around until 2014.

Now I understand.

Grant Shapps

Grant Shapps, the Tories’ Housing minister is demonstrating consistent imbecility. For example, on the Radio 4 programme earlier this week on squatting (From Frestonia to Belgravia: The History of Squatting: Frestonia_R4_1111), he equated the ‘crime’ of squatting with that of murder to Robert Elms. Today, on the Today programme, he demonstrates that he cannot organise his diary or coordinate announcements with the release of contradictory statistics. I feel compelled to record these for readers. He is truly egregious and dangerous. The Today recording can be heard here: Shapps_251111