SHC PRINCIPLES OF ORGANIZATION
Principles of Organization
- For conceptual purposes you can compare a self-help corporation to the immigrant family that starts a restaurant as a family business. Father takes odd jobs to supplement the income, mother works in the kitchen and the kids wait tables. There may be other family members, aunts, uncles and cousins, who also participate. Everyone involved gets fed and a place to sleep but most of the cash goes back into the business. In this way, and with other kinds of businesses, many immigrant families in the US have bootstrapped their way to financial security. A self-help corporation has the same goal. Further, to the extent that cash proceeds can be reinvested in the business, and not disbursed to pay for labor, a self-help corporation has the same economic advantage.
- Unlike the immigrant family, a self-help corporation will not have the family ties to hold the organization together and ensure that each member is treated fairly. Some other mechanism must be employed to motivate the participants to work on a regular basis. That will require assurance that those whose labor provides the most value also receive commensurate rewards. Since a self-help corporation does not pay salaries, it will need a substitute measure of worth.
- I have called this substitute measure of worth "shares" but they can also be thought of as money. Like other currencies, they will only have value to the extent that they are redeemable for goods and services. Also, they will be subject to fluctuations in value. They will experience inflation and become less valuable if they are too easy to get. The shares could experience deflation and become more valuable if the corporation failed to circulate enough. Since the corporation will not provide a full range of goods and services, some participants will be interested in selling their shares for cash. If shares are traded for cash, the value of the shares can rise and fall in relation to the currency in which they are traded depending on the value of the goods and services for which they may be redeemed.
- In the family business, decisions are made by the patriarch or matriarch or perhaps by consensus among them. A self-help corporation will need a different form of decision making. Any system employed will need to be representative of the interests of the shareholders and ensure that decisions can be made promptly as business developments occur. Because a self-help corporation will be involved in many different activities, and no "CEO" could be knowledgeable in all of those activities, each activity or business division should have authority to make the day to day decisions. Each division will then elect a representative to the Board of Directors. The Board of Directors will then appoint officers to coordinate between the various divisions, see that their bills get paid and regulate the distribution of shares. As a self-help corporation accumulates discretionary funds, the Board of Directors will determine how those funds will be invested to increase the productivity of the corporation as a whole.
- The officers, with the oversight of the Board of Directors, will place shareholders in positions to achieve the best use of the shareholders skills and to develop new skills in an area of the shareholder's interest. As shareholders learn skills and demonstrate diligence and commitment, they would move up in the organization and be in a position to teach those skills to other shareholders. One of the purposes of the corporation is to assist members in acquiring marketable skills. If any shareholder can make more money in the cash economy than they make in shares, they can take the outside job for cash making room for other shareholders to move up and make more room for shareholders at the bottom.
- As explained in [ Self Help Corporation ], the purpose of a self-help corporation is to provide food, clothing, shelter, education and health care to the shareholders. Aself-help corporation can either produce these items internally or purchase them, at wholesale, on the open market. To the extent that a corporation conducts no business transactions with the outside economy, some of participants utilizing the services will need jobs in the outside economy.
- Once a self-help corporation has determined to engage in certain businesses, each business will need someone in a supervisory position. The supervisor executes the business plan and takes any problems to the officers. For example, if a corporation were running a landscaping business, the corporation would invest in the trucks, mowers, and string trimmers. The supervisor would see to the training of shareholders in the use of the equipment and the expectations of the clients. The supervisor would also see to the scheduling, marketing and accounting, either by him/herself or through services available within the corporation.
- When the supervisor finds work, he/she will offer the work first to the shareholders who have demonstrated the skills and reliability the supervisor needs to make the business successful. If there are not enough workers in that category, the supervisor will want to teach the necessary skills to other shareholders that are interested or to potential new shareholders. If a supervisor is not successful in generating revenue, the Board of Directors can replace the supervisor.
- When a self-help corporation is paid for services, it would pay the operating expenses such as gasoline and issue shares to the supervisor based on the net revenue to the corporation. The supervisor would then distribute the shares to those who did the work based on the value of their services. The net cash profit from the landscaping business would be pooled with funds realized from other enterprises. The Board of Directors would decide how the net revenue of the corporation is spent. Some money will go to purchase goods that can not be purchased in exchange for shares and some money will be set aside to invest in assets that will either produce goods and services for internal consumption or allow the corporation to offer additional services to the outside economy.
- A self-help corporation should attempt to grow as quickly as it can provide quality service. The corporation can grow where the value of one day's labor by a participant can purchase necessities for more than one day. Viewed another way, growth will occur when people can obtain more through participation in the corporation than they can on their own.
- Business success requires reliability and quality service. For example, if all the corporation does is operate a temporary labor service, it will be a success if it reliably provides good workers when asked. Outside businesses that regularly require temporary labor want to have a reliable source for that labor. If workers with appropriate skills show up when they are supposed to, that outside business will call the self-help corporation the next time they need labor. All business development is a matter of persistence and consistency.
- I don't think it matters whether one self-help corporation is started that grows to encompass all of the poor people of the world or if many self-help corporations are started all over the world. It may be feasible for several self-help corporations to compete with each other within the same market. It would probably be advisable for corporations to merge rather than to compete. Merger would allow for more accumulation of capital for reinvestment. Many different corporations would allow for experimentation with these principles of organization and, hopefully, improvements in the operation of the corporation.
- As explained in the [ Biological Potential Project ] the corporation's long term goal is the control of land. Ownership of land is not required, but control of land is necessary if the corporation is to realize its full potential. Control of land through agreements with governments or private landowners, where the corporation agrees to improve the land in exchange for its use may be the more common approach. See [Environmental Restoration Projects ]. Once a self-help corporation has control of land, the corporation can license shareholders to utilize the land for specific productive enterprises. Through a license agreement, the corporation can recover its investment, and share in continuing profits while the shareholder can earn as much or as little as his labor or skill allows. If the shareholder is unsuccessful or violates the terms of the license, the license can be revoked and reassigned to another shareholder. Licensing the use of a corporation's resources would change the internal economy from a bureaucratic internal economy to a free market internal economy.
- Many details of organization can only be worked out as a self-help corporation develops. Organizations must be flexible to respond to problems and take advantage of opportunities. I have described two potential start up scenarios is the [ Urban Plan ] and the [ Rural Plan ]. Some specific activities are described in the [ Methane Project ] the [ Methanol Project ] and [ Environmental Restoration Projects ]. By applying basic principles of organization we can give those living in poverty the hope of a better life.
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