Tag Archives: Cooperation

Cross-Cultural Transformational Leadership

mathias-sager-cross-cultural-transformational-leadership

In an increasingly interdependent world, global leadership understanding for international collaboration [1] is vital for the development of cross-cultural leadership [2]. This essay provides some hints on what might be determining leadership prototype’s effectiveness from different global perspectives [3].

Universal and culture-specific features of transformational leadership

Transformational leadership facilitates change through shared vision, intellectual stimulation, and support of individual’s aspirations [4] and is therefore essential for solving contemporary threats that require change [5]. Social change movements need to be put into the context of globalization [6]. The effectiveness of general transformational leadership was found a cross-culturally valid concept [7]. For example, transformational leaders were able to motivate their followers independent of cultural context [8]. In contrast, the desirability and effectiveness of transactional leadership turned out to be culture-dependent [9]. On a more detailed level, also transformational leadership contains some culture-sensitive aspects [10]. For example, enabling others to act and challenging the process appeared to be culture independent, while inspiration through shared vision and showing the way was negatively correlated to cultural values such as uncertainty avoidance [11].

Societal and cultural beliefs and values

Following the rationale and evidence that the concept of leadership has to be understood against the backdrop of social, historical, and cultural context [12], what are these factors then? Leadership literature has been criticized for being US-centric [2]. Indeed, 98 percent of leadership concepts stem from Western values and don’t assume a cross-cultural view [12]. As change involves setting goals [13], and as beliefs about goals represent values, it becomes clear that leadership is not decoupled from the social and cultural context [14]. Consequently, subordinates may respond differently according to their cultural value orientation [15]. For example, while, besides a charismatic leadership style, a participative leadership dimension is most important in the US, Latin America prioritizes team-orientation, and Eastern Europe scored highest in team-oriented and human-oriented aspects [16]. According to the implicit theory of leadership, the bedrock of leadership is how a certain style like transformational leadership gets implicitly meaningful and fine-tuned by the cultural endorsement of values such as, for example, collectivism/individualism, power distance, and level of context [17].

Global leadership understanding for international collaboration

Despite significant differences measured on national mean levels, individual differences shouldn’t be forgotten when examining cross-cultural differences [18]. Especially power distance orientation has proven to provide a better individual-level measure than individualism/collectivism as the central cultural value [4]. Power distance orientation describes the degree of acceptance and expectation of unequally distributed power [19, 20]. For example, emotional commitment to a transformational leader was higher among followers low in power distance [21]. Beyond national culture, there are even more relevant variables, such as politics, language, feminine and masculine tendencies, and organizational culture [22]. Person-job fit was fund to mediate inclusive leadership and employee well-being [23]. In an increasingly interdependent world, global leadership understanding for international collaboration [1] is vital for the development of cross-cultural leadership [2]. This essay provided some hints on what might be determining leadership prototype’s effectiveness from different global perspectives [3].

photo credit: geralt (pixabay.com)

References

[1] Huffman, J. B., Olivier, D. F., Wang, T., Chen, P., Hairon, S., & Pang, N. (2016). Global Conceptualization of the Professional Learning Community Process: Transitioning from Country Perspectives to International Commonalities. International Journal Of Leadership In Education, 19(3), 327-351.

[2] Rakesh, M., & Steven M., E. (2016). Social power and leadership in cross-cultural context. Journal Of Management Development, (1), 58. doi:10.1108/JMD-02-2014-0020

[3] Jung, D., Yammarino, F. J., & Lee, J. K. (2009). Moderating role of subordinates’ attitudes on transformational leadership and effectiveness: A multi-cultural and multi-level perspective. The Leadership Quarterly, 20(4), 586-603. doi:10.1016/j.leaqua.2009.04.011

[4] Kirkman, B. L., Chen, G., Farh, J., Chen, Z. X., & Lowe, K. B. (2009). Individual power distance orientation and follower reactions to transformatioal leaders: A cross-level, cross-cultural examination. Academy Of Management Journal, 52(4), 744-764. doi:10.5465/AMJ.2009.43669971

[5] Berger, R., Romeo, M., Guardia, J., Yepes, M., & Soria, M. A. (2012). Psychometric properties of the Spanish Human System Audit Short-Scale of transformational leadership. The Spanish Journal Of Psychology, 15(1), 367-376.

[6] Chen, S., & Kompf, M. (2012). Chinese Scholars on Western Ideas about Thinking, Leadership, Reform and Development in Education. [e;ectronic book].

[7] Petia, P., & Herbert, B. (2017). Cross-Cultural Variation in Political Leadership Styles. Europe’s Journal Of Psychology, Vol 13, Iss 4, Pp 749-766 (2017), (4), 749. doi:10.5964/ejop.v13i4.1412

[8] Wang, Z., & Gagné, M. (2013). A Chinese–Canadian cross-cultural investigation of transformational leadership, autonomous motivation, and collectivistic value. Journal Of Leadership & Organizational Studies, 20(1), 134-142. doi:10.1177/1548051812465895

[9] Hussain, G., Wan Ismail, W. K., & Javed, M. (2017). Comparability of leadership constructs from the Malaysian and Pakistani perspectives. Cross Cultural & Strategic Management, 24(4), 617-644. doi:10.1108/CCSM-11-2015-0158

[10] Lam, Y. J. (2002). Defining the Effects of Transformational Leadership on Organisational Learning: A Cross-Cultural Comparison. School Leadership & Management, 22(4), 439-52.

[11] Ergeneli, A., Gohar, R., & Temirbekova, Z. (2007). Transformational leadership: Its relationship to culture value dimensions. International Journal Of Intercultural Relations, 31(6), 703-724. doi:10.1016/j.ijintrel.2007.07.003

[12] Ryu, S. Y. (2015). Kunja leadership: Concept and nomological validity. Leadership & Organization Development Journal, 36(6), 744-764. doi:10.1108/LODJ-12-2013-0167

[13] Clarke, G. A. (2009). An Essay on Leadership, Especially through South African and New Zealand Cultural Lenses. International Journal Of Leadership In Education, 12(2), 209-216.

[14] James C., S., & Joseph C., S. (2001). Leaders and values: a cross-cultural study. Leadership & Organization Development Journal, (5), 243. doi:10.1108/01437730110397310

[15] Louw, L., Muriithi, S. M., & Radloff, S. (2017). The relationship between transformational leadership and leadership effectiveness in Kenyan indigenous banks. South African Journal Of Human Resource Management, 15(1), 1-11. doi:10.4102/sajhrm.v15i0.935

[16] Suzana Dobric, V. (2017). Charismatic, Transformational, and Servant Leadership in the United States, Mexico, and Croatia. International Journal Of Business And Social Research , Vol 6, Iss 12, Pp 25-34 (2017), (12), 25. doi:10.18533/ijbsr.v6i12.1003

[17] Yang, I. (2016). Lost overseas?: The challenges facing Korean transformational leadership in a cross-cultural context. Critical Perspectives On International Business, 12(2), 121-139. doi:10.1108/cpoib-09-2013-0036

[18] Lee, K., Scandura, T. A., & Sharif, M. M. (2014). Cultures have consequences: A configural approach to leadership across two cultures. Leadership Quarterly, 25(4), 692-710.

[19] Hofstede, G. (1980), Culture’s Consequences: International Differences in Work-Related Values, Sage, Beverly Hills, CA.

[20] Hofstede, G. (2001), Culture’s Consequences: Comparing Values, Behaviors, Institutions, and Organizations Across Nations, 2nd ed., Sage, Newbury Park, CA

[21] Newman, A., & Butler, C. (2014). The influence of follower cultural orientation on attitudinal responses towards transformational leadership: Evidence from the Chinese hospitality industry. The International Journal Of Human Resource Management, 25(7), 1024-1045. doi:10.1080/09585192.2013.815250

[22] Chin-Chung (Joy), C. (2011). Climbing the Himalayas : A cross-cultural analysis of female leadership and glass ceiling effects in non-profit organizations. Leadership & Organization Development Journal, (8), 760. doi:10.1108/01437731111183720

[23] Choi, S. B., Thi Bich Hanh, T., & Kang, S. (2017). Inclusive Leadership and Employee Well-Being: The Mediating Role of Person-Job Fit. Journal Of Happiness Studies, 18(6), 1877-1901.

Positive Change Through Rewarding Virtue vs. Punishing Non-Compliance

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Men have made millions of laws to punish crimes, and they have not established even one to reward virtue; Virtue being a product not of the command of law, but of our own free will, society has no right whatsoever over it. Virtue on no account enters into the social contract; and if it remains without reward, society commits an injustice similar to that of one who defrauds another of his labor.

Dragonetti (1766)

 

Moments of instability bear the opportunity for change, and leadership determines whether it be a breakdown or breakthrough [1]. Many institutional environments experience turning points through “critical actors” rather than through “critical masses” [2]. To gain acceptance for change, leaders use different types of power, e.g., coercion, punishment, reward, legitimation, and expert information [3]; [4]. In contrast, to incentivize change through fear, dissatisfaction, or guilt [5], reward power is to offer a positive motivation in case of compliance, e.g., an increase in salary, a career promotion, or other privileges [4]. In the study of coach-athlete relationships, rewards and not punitive methods have shown positive effects on the athletes’ behaviors [6].

Dragonetti, an old Neapolitan economist, more than 250 years ago stated that “Men have made millions of laws to punish crimes, and they have not established even one to reward virtue [7]” [8]. Indeed, a system more based on incentives, e.g., in the form of intrinsic societal awards, would foster more cooperation with economic and civic benefits [8]. This may be required today more than ever. Longitudinal research found that as a result of modernization and westernization, mothers in San Vicente, Mexico, developed more self-promoting behavior at the cost of a more giving and rewarding (e.g., including encouraging failures) attitude only forty years ago [9].

Monetary compensation, social status, or ideological values all may provide for reward [10]. Equating satisfaction with perception minus expectation, unexpected rewards can impact individuals’ satisfaction disproportionately and therefore, motivate change [11]. Contingent rewards have proven to be an effective change leadership tool. However, it was also found that rewards need to be specified according to the situation respectively to the field of interest [12]. Strategic alignment of changes and related rewards is essential to create clear psychological contracts that define well what contributions to company performance the employees owe their employer and what they can hope for in return [13]. Of course, it is foolish to incentivize something and expect something else in return [14].

Because not all change is of equal ease to everybody, change efforts rather than change expertise/effectiveness should be rewarded [15]. Not only reward size, but also the sequence and frequency of incentivizing are influencing the future expectancy of further rewards in social-change theories [16]. Age may also be a factor for reward-sensitivity, as, for example, adolescents with typically lower inhibitory control capability attribute more value to reward [17]. In conclusion, the focus on rewarding desired behavior rather than punishing unwanted conduct might have several advantages, such as creating positive feelings, increasing acceptance of positive change, and enabling higher likability of the influencing change agents [4].

References

[1] Goleman, D., Barlow, Z., & Bennett, L. (2010). Forging New Norms in New Orleans: From Emotional to Ecological Intelligence. Teacher Education Quarterly, 37(4), 87-98.

[2] Helitzer, D. L., Newbill, S. L., Cardinali, G., Morahan, P. S., Chang, S., & Magrane, D. (2017). Changing the Culture of Academic Medicine: Critical Mass or Critical Actors?. Journal Of Women’s Health (15409996), 26(5), 540. doi:10.1089/jwh.2016.6019

[3] Richardson, R. C., & Evans, E. T. (1997). Options for Managing Student Behavior: Adaptations for Individual Needs.

[4] Raven, B. (2008). The bases of power and the Power/Interaction Model of Interpersonal Influence. Analyses Of Social Issues & Public Policy, 8(1), 1-22.

[5] Schein, E. H. (2014). Organisational culture and leadership (4th ed.). John Wiley & Sons Ltd. Jossey-Bass: San Francisco.

[6] Stenling, A. (2016). Sports coaches’ interpersonal motivating styles: longitudinal associations, change, and multidimensionality.

[7] Dragonetti, G. (1766) Delle virtu’ e dei premi, Napoli.

[8] Bruni, L., Panebianco, F., & Smerilli, A. (2014). Beyond Carrots and Sticks: How Cooperation and Its Rewards Evolve Together. Review Of Social Economy, 72(1), 55-82.

[9] Garcia, C., Greenfield, P. M., Montiel-Acevedo, D., Vidaña-Rivera, T., & Colorado, J. (2017). Implications of 43 Years of Sociodemographic Change in Mexico for the Socialization of Achievement Behavior: Two Quasi-Experiments. Journal Of Cross-Cultural Psychology, 48(4), 611-619. doi:10.1177/0022022117698573

[10] Van de Rijt, A., Kang, S. M., Restivo, M., & Patil, A. (2014). Field experiments of success-breeds-success dynamics. Proceedings Of The National Academy Of Sciences Of The United States Of America, 111(19), 6934-6939. doi:10.1073/pnas.1316836111

[11] Aiken, C., & Keller, S. (2009). The irrational side of change management. Mckinsey Quarterly, (2), 100-109.

[12] Richter, A., von Thiele Schwarz, U., Lornudd, C., Lundmark, R., Mosson, R., & Hasson, H. (2016). iLead-a transformational leadership intervention to train healthcare managers’ implementation leadership. Implementation Science, 111-13. doi:10.1186/s13012-016-0475-6

[13] McDermott, A. M., Conway, E., Rousseau, D. M., & Flood, P. C. (2013). Promoting Effective Psychological Contracts Through Leadership: The Missing Link Between HR Strategy and Performance. Human Resource Management, 52(2), 289. doi:10.1002/hrm.21529

[14] DuBois, C. Z., & Dubois, D. A. (2012). Strategic HRM as social design for environmental sustainability in organization. Human Resource Management, 51(6), 799. doi:10.1002/hrm.21504

[15] Cappelen, A. W., & Tungodden, B. (2003). Reward and Responsibility: How Should We Be Affected When Others Change Their Effort?. Politics, Philosophy And Economics, 2(2), 191-211.

[16] Lao, R. C., & Llorca, A. L. (1982). THE EFFECT OF SEQUENCE AND SIZE OF REWARD ON EXPECTANCY. Journal Of Social Psychology, 117(1), 93.

[17] Walker, D. M., Bell, M. R., Flores, C., Gulley, J. M., Willing, J., & Paul, M. J. (2017). Adolescence and Reward: Making Sense of Neural and Behavioral Changes Amid the Chaos. Journal Of Neuroscience, 37(45), 10855-10866.

 

Dr. Wayne W. Dyer: Inspiration for the Leader in All of Us

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Father of Motivation and Sage of Maui

The life and work of author and speaker Dr. Wayne W. Dyer, who died at the age of seventy-five in 2015, provides the opportunity to reflect on leadership from a holistic perspective beyond a specific organizational setting or national politics. Dyer’s many best-selling books on the practical psychology of personal development towards a positive transformation for all of humanity [1] brought him the nickname of the Father of Motivation by his fans [2]. Writing and meditating on Maui on Eastern Philosophies like Taoism, the Sage of Maui covers the self-conscious wisdom category of the self-help genre [3]. Like in the book ‘Wisdom of the Ages,’ Dyer’s messages focus on virtuous love, inspiration, and patience as found in Confucian, Christian, and Thoreauvian teachings [4]. Having written ‘Erroneous Zones,’ one of the most famous books of all time [5], and if leadership is about influence, Wayne Dyer was an enormous leader in influencing masses around the globe [6]. Although not limited to an organizational goal setting context, the topics Dyer was promoting represent the core of the study of leadership and address change, motivation, inspiration, and influence [7].

A practical, humorous, personal, and sometimes too self-confident leader?

As a Welch proverb puts it aptly: “The hand will not reach for what the heart does not long for” [8], p. 38. In that sense, Dyer’s messages speak empathically to the core desires of people through practical, humorous [9], and personal [6] stories, presented as inviting offerings rather than pushing rules. Practical intelligence is of high importance for leaders [7]. Indeed, Dyer focused on outcome rather than intellectualization [13], one possible reason why he chose the career of an independent writer rather than continuing his university job, which he saw limited to producing papers for the sake of a small self-serving academic community [14]. It was Dyer’s high self-confidence that allowed him to, for example, tell “the shocking truth” he was so convinced about publicly [10] and therefore intuitively take required risks to advance his growth as a leader [11]. Dyer got accused of plagiarism of Albert Ellis’ Rational Emotive Therapy (RET) [12]. However, he did seemingly ignore what other people think of him [4] and unwaveringly continued his mission.

Life transitions and openness to experience

Assertiveness is the candid expression of one’s desires, opinions, and feelings and may help to get the recognition that is a powerful human motivator [7]. Wayne Dyer’s public exposure of his style in writing and speaking may have also reflected a personality tendency of extraversion. In the US, extraversion is a personality trait showcased to create a societal image of openness and friendliness [15]. It is therefore difficult to say how much Dyer’s demonstration of extraversion is part of his working brand to reach the goal of spreading his messages as much as possible, and how much, in comparison, he enjoyed his extended writing retreats on Maui from a more introvert perspective. In any case, according to his children’s accounts, he naturally loved to lecture and entertain others with his vast knowledge [16]. Extraversion and openness to experience are personal characteristics that strongly relate to leadership effectiveness [17]. Wayne Dyer’s openness to experience may be well seen in his demonstration of mindfulness that allowed him to accept new and demanding situations, to further develop his self-image, to promote changes, and to let go of attachments [18]. Dyer went through different career transitions and lived over time with three wives and eight children [3]. He also underwent a spiritual transformation in his “meaning stage” of life. These may be lessons of what Dyer framed in his film ‘Shift’ as “What was true in the morning has become a lie in the afternoon” [19].

Between charismatic mentorship and rescuer syndrome?

Regardless of the leadership position, it seems that the opportunity to help others’ personal growth, rather than sources of satisfaction like power, salary and status [7] represented the main motive of meaningfulness for Wayne Dyer throughout his life. Dyer spent parts of his childhood in foster homes. However, he described himself as seeing and remembering mainly the positive aspects, what helped him already at the age of three to help others in overcoming their despair [10]. It may be this “naturally” developed talent of soothing others distress that adds a charismatic quality [20] to Dyer’s personality. In his thirties, Dyer visited his father’s grave and could resolve his anger towards that person who had left a wife with small children in a difficult situation. This pivotal event of forgiveness might not only have unlocked Dyer’s potential as a writer [10] but may have been necessary not to let the urge to mentor other people become a self-serving compensation for emotional and psychological issues; which would also be known as the rescuer syndrome [21].

Holistic leadership: inspirational motivation, trust, and loving service

Like Einstein and Emerson, Wayne Dyer believed in the Transcendentalist ideas [3] of the human soul being able to intuitively connect to the spiritual truth that creates a collective consciousness [22], itself capable of reconstructing the world [23]. Wishing to lead a God-realized life [24] and occasionally named a self-help guru [25] and pied piper of the movement [5], Dyer could be suspect of suffering self-perceptions of grandiosity [20]. However, Dyer believed, and that’s the position of equality that might have been so appealing to his diverse readers, that the divine realm is available to all [1]. Such an uplifting vision is inspirationally motivating and contributes to a new-genre leadership style that emphasizes an environment of trust and feelings beyond what is necessarily found in transformational leadership [26]. Dyer may be an example of one of the newest leadership theories, that is authentic leadership, and which is true to its values [27]. As a friendly, amiable, assertive, and serving ‘soft leader’ [28], Dr. Wayne W. Dyer lived the messages he taught [6]. It is loving service and unselfish love that makes holistic leadership [29].

 

References

[1] About Dr. Wayne Dyer. (n.d.). Retrieved from https://www.drwaynedyer.com/about-dr-wayne-dyer/

[2] Percival, J. (2004). Desire vs intent. Nursing Standard, 19(7), 27.

[3] Valiunas, A. (2010). The Science of Self-Help. New Atlantis: A Journal Of Technology & Society, 2885-100.

[4] Bauman, A., Post, M., & Cooper, P. (2000). Catching Up With…Wayne Dyer. Runner’s World, 35(9), 15.

[5] Rogers,  J.  (2015, September 1). Wayne Dyer, author of ‘Erroneous Zones’, dies at 75. Retrieved from http://www.spokesman.com/stories/2015/sep/01/wayne-dyer-author-of-erroneous-zones-dies-at-75/

[6] Inam, H. (2015, August 31). Wayne Dyer On Leadership. Retrieved from https://www.forbes.com/sites/hennainam/2015/08/31/wayne-dyer-on-leadership/#5a62d3ea3012

[7] DuBrin, A. J. (2015). Leadership: Research Findings, Practice, and Skills (8th ed.). Cengage Learning.

[8] Zufelt, J. M. (2016). Leadership vs Pushership. Leadership Excellence Essentials, 33(9), 37.

[9] Robbins, T. (2015b). Dr. Wayne Dyer interview with Tony Robbins | Power Talk! | Part 2 of 2 [Video file]. Retrieved from https://www.youtube.com/watch?v=aXpBW4w9ZnY

[10] Robbins, T. (2015a). Dr. Wayne Dyer interview with Tony Robbins | Power Talk! | Part 1 of 2 [Video file]. Retrieved from https://www.youtube.com/watch?v=JBYO4M_c9UY

[11] Singh, A. (2009). Leadership Grid between Concern for People and Intuition. Leadership & Management In Engineering, 9(2), 71-82. doi:10.1061/(ASCE)1532-6748(2009)9:2(71)

[12] Wayne Dyer. (n.d.). In Wikipedia. Retrieved February 1, 2018, from
https://en.wikipedia.org/wiki/Wayne_Dyer

[13] Manifesting What You Want. (2016). IDEA Fitness Journal, 13(7), 111.

[14] Dyer, W. (2015) I Can See Clearly Now, Hay House, Inc.

[15] King, F. (2012). RUNNING DEEP: Quiet: The Power of Introverts in a World That Can’t Stop Talking, by Susan Cain. NATIONAL REVIEW -BRISTOL CONNECTICUT THEN NEW YORK-, (11). 45.

[16] Anders, N. (2016) Wayne Dyer: Himmel auf Erden ist kein Ort, es ist eine Entscheidung.: Zusammenführung der 55+ höchsten Lebensweisheiten von Dr. Wayne Dyer (German Edition). Freiheit. JETZT! Kindle file.

[17] DeRue, D. S, Nahrgang, J. D., Wellman, N., & Humphrey, S. E. (2011). Trait and behavioral theories of leadership: An integration and meta-analytic test of their relative validity. Personnel Psychology, 64, 7-52.

[18] Day, D. )., & Gregory, J. ). (2017). Mindfulness as a Prerequisite to Effective Leadership; Exploring the Constructs that Foster Productive Use of Feedback for Professional Learning. Interchange, 48(4), 363-375. doi:10.1007/s10780-017-9307-0

[19] Waghmare, H. [Good Health 24/7] (2015). The Shift – Wayne Dyer – Positive Attitude – English [Video file]. Retrieved from https://www.youtube.com/watch?v=yfT8Ts6wPFs&t=732s

[20] Doyle, M. E., & Smith, M. K. (2001). Classical models of managerial leadership: Trait, behavioural, contingency and transformational theory. Retrieved from http://www.infed.org/leadership/traditional_leadership.htm

[21] De Vries, M. K. (2013). Are you a mentor, a helper or a rescuer?. Organizational Dynamics, 42(4), 239-247. doi:10.1016/j.orgdyn.2013.07.001c

[22] Williamson, A., & Null, J. W. (2008). RALPH WALDO EMERSON’S EDUCATIONAL PHILOSOPHY AS A FOUNDATION FOR COOPERATIVE LEARNING. American Educational History Journal, 35(1/2), 381.

[23] Barney, J. B., Wicks, J., Otto Scharmer, C., & Pavlovich, K. (2015). Exploring transcendental leadership: a conversation. Journal Of Management, Spirituality & Religion, 12(4), 290-304. doi:10.1080/14766086.2015.1022794

[24] Altersitz, K., Bechtel, B., & Mullin, D. W. (2010). ‘Father of Motivation’ offers advice for the self-actualized life. Ocular Surgery News, 28(4), 15.

[25] A Tribute To Dr. Wayne W. Dyer. (2015). Leadership Excellence Essentials. p. 5.

[26] Bonau, S. (2017). How to become an inspirational leader, and what to avoid. Journal Of Management Development, 36(5), 614-625. doi:10.1108/JMD-03-2015-0047

[27] Billsberry, J., & North-Samardzic, A. (2016). Surfacing Authentic Leadership: Inspiration from “After Life”. Journal Of Leadership Education, 15(2), 1-13.

[28] Rao, M. (2013). Soft leadership: a new direction to leadership. Industrial & Commercial Training, 45(3), 143-149. doi:10.1108/00197851311320559

[29] Dhiman, S. (2017). Holistic leadership : a new paradigm for today’s leaders. New York : Palgrave Macmillan, 2017.

Compassionate leadership: If we all ‘lead,’ we don’t need ‘managers’ anymore

There are significant differences between leadership and management

In our contemporary world both leadership and management may be required and co-exist in different situations, but the identification and understanding of their distinguishing features is important if we want to use both of them effectively and eventually think about shifting the emphasis towards managers who are real leaders too.

Having been in diverse leadership and/or management positions in educational institutions and schools, business and consulting firms, military/public service organizations, media and communication practices, as well as leisure/sports clubs and civic movements over the last 20 years, I’ve reflected on the difference between leadership and management from many different angles. I’m always coming back to the conclusion that the concepts of leadership and management are not as related as the popular interchangeable use of the terms might suggest.

The ultimate market-participating organizational SMART goals versus dreams and visions

Like a path is leading to a different place, or a sheep can be led into a stable, human leadership can be defined as leading something or somebody towards a certain direction. It is said that leadership requires meaning; meaning that is represented and communicated through goals. Although managerial and leadership goals should always be believed to be achievable, the type of goal formation process and quality of goals themselves involved in leadership and management differs significantly [1].

A leader typically is self-guided by intuition and his intimate moral understanding, while a manager is hired by the board of directors pursuing shareholders interest for securing maximized return on their investments. In case of doubt or conflict, the financial interests always have to succeed over other values in a for-profit organization. Manager’s success is measured by how accurately they achieve the business goals. The more long-term, the less predictable the attainment of goals becomes. Leadership tolerates not directly measurable long-term results [1]. Managers, in contrast, for above reasons preferably are to set short-term goals. To ensure that goals are as clear and realistic as possible, so-called SMART goals are commonly used in the corporate world, which ought to be specific, measurable, attainable, relevant, and timely. Leaders may not only not have SMART goals, but even allow more vague dreams and visions that are often requiring significant imagination.

There is a difference between the concept of power based on formal authority and influence through inspiration

One broad approach is to define leadership as the interpersonal dimension of management that comprises the “ability to inspire confidence and support among the people who are needed to achieve organizational goals” ([2], p. 5). Frequently leadership gets confused with authority, seeing power as being based on formal roles. The formal assignments of a manager or officer let people notice legitimacy and comply with instructions because of fear of negative consequences in case of non-compliance [3]. When saying that leadership requires power, it is, however, not this authoritarian capability of incurring costs (for example in the form of punishment) for the people who refuse to obey [1]. Authoritarian regimes as examples of tight leadership in the form of control and prescription are generating poor results for the people. Instead, it is the ability to inspire for a voluntary fellowship by unforceful means that is resulting in individual prosperity, well-being, and peace through personal self-determination and fulfillment. Real leadership allows people self-leadership.

Leadership goes beyond the leadership aspects practiced in business administration

When the sum of the leadership structures followed by society is called culture [1], then the sum of management structures of market-participating organizations can be seen as the economy. Leaders create culture through the leadership structures they leave behind ([1], p. 11), while managers build administrations through the organizational patterns they establish. This thinking is in line with the terminology used in managerial education, where the top courses for aspiring or acting executive officers award for the title of the Master of Business Administration. Increasing parts of businesses consist of technology and digital resources, whereas human aspects tend to be further pushed into the background. Emotional and organic elements are taken out from the management of resources in favor of optimal planning accuracy. Again, although there may (but doesn’t have to) be some deal of leadership involved as well in steering a business, a real leader would never be reduced to be an administrator in that sense.

The irrelevance of leadership in the management of expectations

As Rudy Giuliani once put it, leaders first figure out what’s right, and then explain it to people, as opposed to first having people explain it and then just saying what they want to hear ([2], p.3). Indeed, managers tend to behave in a manner more or less in line with the management style endorsed within their country, industry or organization [4]. Firms choose new executives whose values are consistent with their own. If an executive is not filling the role as expected, he will be replaced with somebody who adheres more closely to expectations. From that perspective it is essential to have a rider, to use this metaphor, who holds the reins of a horse put before a cart, but any other rider who follows the relatively simple rules how to guide a horse and carriage can carry them as well. You can even let a child play the carter. It can be observed that the horse’s, respectively the organization’s personality, to come back to the organizational context, is actually more important than the “leader” himself [2].

Leaders emerge when there is an urge for change or the need to resolve a crisis or conflict

Leadership creates change, often of dramatic dimensions, such as when completely new market dynamics are developed, societal perceptions are shifted, or more diverse cultures emerge. Management on the other hand often is concerned about maintaining predictability and order [2]. Let’s think about why and how changes are managed in organizations. A big part of organizational administration deals with tracking changes to protect the status quo of power balances and interests of stakeholders and resources that contribute most to the profitable business. Such times of contentedness and stability are not calling for leaders whose strength is to move towards widening the range of beneficiaries. It is the time of crisis, in which leaders emerge. Managers monitor operational excellence of their subordinates typically in periods of economic strain. Charisma arises when there are heightened levels of distress among an increasing number of people that can be of not only financial but also psychological nature, constituting an individual and collective crisis of meaning that demands answers. If the problem is sought to be solved by somebody else, the ground is fertile for people to follow a leader who convincingly directs toward a comforting solution [3]. It has to be carefully evaluated whether these promises are meaningful and serving the common good, or whether there is an overemphasis on leader-reliance for whatever reason. Leaders are also required in situations of conflict. Conflict as the opposite of leadership is characterized by the absence of a functioning leader-follower relationship, typically because of disagreements related to a common course of action [1].

There is little leadership required and even possible in corporations

Following the argumentation so far, it is conceivable to suggest, assuming a bit a black and white perspective, that in organizations, at ordinary times there is little leadership required and even possible. Instead, what is required is a disciplined management that administers an organization to stay on track without visioning any significant change that would require leadership. Abraham Maslow regarded leaders as self-actualizing individuals who are self-determined, independent of culture, and following their inner guidance to help their fellow humans. For a leader of such qualities a narrow corporate environment likely would be unsatisfying at least and possibly over longer or sooner and would also be ethically conflicting. Executives of big corporations have contributed to the mistrust in corporate ethics due to their perceived focus on self-promotion and excessive greed. What seems to be required is more compassionate leadership in the service of others respectively in the view of the broader society and humanity beyond an institutional context [5].

The difference between moral, ethics, and professionalism

Ninety-nine percent of the global wealth is controlled by the top one percent of richest people. The issue is that this causes, for example, the daily death of tens of thousands of innocent children who are left without the necessary means to survive, such as food or health care. Unfortunately, as long as it is a tolerated practice that the already highly concentrated wealth is invested almost exclusively in opportunities that further accentuate this income and wealth inequality, there is little hope that compassionate (moral) and ethical leadership will prevail. Corporate social responsibility struggles to demonstrate a positive impact on the single measure bottom-line of financial profit generation, why it remains not much more than an afterthought. On the one hand, public relations and marketing communications of organizations increasingly use language that includes terms like ‘sharing,’ ‘love,’ ‘community,’ and ‘better world for all,’ to brand themselves socially towards consumers who are willing to pay a premium for such labels. This is true even for industries such as tobacco and arms. On the other hand, corporate ethics training is poised to be mere professional instruction on how to operate within legal constraints without jeopardizing business performance. This may be diligent management to serve capital, but not leadership to improve the human condition.

Shaping the role of genuinely great managerial leadership

Again, in all kinds of organizational settings, there may be a necessary mix of administrative and leadership qualities at work, suggesting a combined role of a ‘managerial leader’ [2].

Maybe the understanding of managerial leadership as based on self-actualization could further evolve to increasingly focus the help of other people in the organizational context while also not losing sight of the fairness towards and the well-being of people in the broader national societal and even global humanitarian context. Importantly, we should not forget that such a broadening of the benefits of leadership requires courageous first-/early-moving followers, who lead others not to remain passive bystanders but to support change towards growth and development of all actively. Asking managerial questions for organizational survival is foundational, but without further questioning on what basis, to what extent, and at whose cost, it is difficult to see real leadership added to management. The more inclusive and compassionate questions get expanded to the scope of all humanity, the greater the leadership involved.

In the current economic and competitive context, cooperation may indeed risk losing some battles in the field of short-term inter-organizational rivalry. However, already today more than ever, genuinely great managerial leadership also can become a competitive advantage and an opportunity for priceless emotional rewards for our all well-being. I think we are on the way to return to a more overall life-relevant philosophical understanding of leadership in which everyone’s full human potential is embraced. In that sense, leadership beyond management is relevant and possible for all of us. If we all assume a managerial leadership role, we don’t need managers anymore. Let’s take the chance.

References

[1] Paschen, M., & Dihsmaier, E. (2013). The psychology of human leadership: How to develop charisma and authority. Berlin: Springer-Verlag.

[2] DuBrin, A. J. (2015). Leadership: Research Findings, Practice, and Skills (8th ed.). Cengage Learning.

[3] Doyle, M. E., & Smith, M. K. (2001). Classical models of managerial leadership: Trait, behavioural, contingency and transformational theory. Retrieved from http://www.infed.org/leadership/traditional_leadership.htm

[4] Dorfman, P., Javidan, M., Hanges, P., Dastmalchian, A., & House, R. (2012). GLOBE: A twenty year journey into the intriguing world of culture and leadership. Journal of World Business, 47(4), 504–518.

[5] Soni, B., & Soni, R. (2016). Enhancing Maslow’s Hierarchy of Needs for Effective Leadership. Competition Forum, 14(2), 259-263.

Implementing the Co-operative Digital Economy

When presenting Platform Cooperativism as a fairer user-/worker-owned model of running online platforms, I often hear answers like “that’s a great idea, but it’s too difficult to realize.” However, technology to implement the co-operative digital economy is emerging. Solutions become available to sustainably crowd-source, share value, and govern democratically. Hexalina.io is one such example.

(from hexalina.io website)

It is now generally admitted that income inequality is one of the biggest problems of our world and a peril to the fabric of our society.
A few years ago, the rise of the “sharing economy” gave great hopes to change this: soon everybody would be self-employed, and benefit from the new opportunities unlocked by the internet, technology and platforms.

Today, unfortunately, the reality is bleaker: millions of people have indeed become self-employed and provide the services that increase –sometimes dramatically- the value of these platforms thanks to the network effect they create and the customer adoption they generate.

However, neither the contributors, nor the customers of the platforms have the opportunity to own a share of the value they create.

A lot of people realize this is counterproductive and eventually unsustainable. However, there seems to be no easy solution that can address the problem and scale to match its rate of expansion.

What we propose is a technology that can be integrated into platforms, allowing them to adopt a more collaborative approach where interests of owners, customers and contributors are aligned, because a fraction of the created value is shared fairly between them.

Think of it as the “Fairtrade” label for a platform. We call it the “sustainable network effect”.

 

Industry adaption of Platform Cooperativism is the goal of the Platform Cooperativism Japan (PCJ) Consortium. Although awareness and motivation for the co-operative way is crucial, if there is no easy way to act upon, good intentions don’t get realized. That’s where technology solutions come into play.

The PCJ Consortium supports the cooperative digital economy through research, experimentation, education, advocacy, documentation of best practices, technical support, the coordination of funding, and events.

Connect with us:

Platform Cooperativism Japan (PCJ) Consortium
Website: www.platformjpcoop.wordpress.com
Facebook: www.facebook.com/platformcoopjp
Loomio: www.platformcoopjp.loomio.org

Artooba: We’re building a co-operative platform to help artists showcase and sell their art in public places (Connect!)

We are coloring the world. Be part of the community already now and connect with us: https://www.facebook.com/artoobacommunity

We are also looking for partners and further team members. Contact us for any inquiries.

Videos:

 

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(Platform) Worker Co-ops as a Solution for Business Ownership Successions. The Context in Japan.

mathias-sager-platform cooperativism Japan

Introduction

The percentage of employees employed by small and medium enterprises (SME’s) decreased from 80% to 70% in the last 20 years. Issues regarding the ownership succession of businesses are essential in the light of an aging society and the need for sustainable socio-economic development. The SME Cooperative Act of 1949 is for small and medium enterprises that lack financial resources in the conduct of joint businesses based on a spirit of mutual-aid to raise their economic status. The creation of a worker co-operative law would allow the further formalization of the opportunity of business conversions into worker cooperatives in any business sector. Business successions to employees would create a fairer economy where the trinity of ownership (investors), management (managers), and value creation/utilization (workers, users) is balanced for the benefits of its active membership.

Number of SME’s in Japan has fallen by 1 million during the last 20 years

It would be great if we could already discuss co-operative ownership succession of large organizations. However, I’m not aware of a “buy-twitter-initiative” in Japan so far. So, the more immediate opportunity for Platform Cooperativism may lie with small and medium businesses. Over the past 20 years, the number of SMEs in Japan has fallen by about 1 million and the number of SME employees decreased from 80% to 70% percent of overall employment (White Paper on Small and Medium Enterprises in Japan 2016). I am not sure how much the demographic challenges of the aging society would be the cause of such a decline in the digital sector especially, as increasing eliminatory market dominance of the big corporations is an inherent feature of many digital platforms.

Opportunity for ownership succession to employees

I experience that Japanese observers are regretting the disappearing of SME’s due to a lack of successful succession management. A similar issue represents the continuing rural exodus. There is mentioning of that when the business successions among SMEs are becoming issues, business successions to non-family persons, such as employees, are increasing (Kubota, 2010). So, I feel there are lots of opportunities to promote the co-operative way, although the predominant family business succession models are to the family or third parties other than employees and are separating ownership and management. Japan is currently still one of the few developed countries without a worker coop law, which is certainly not helpful.

For example, in agriculture, the succession and inheritance aspect is (globally) less researched because there is a view that family farming is heading towards extinction anyway. However, as still many farms are owned and managed by families, there may be renewed interest in intergenerational and intra- and inter-family cooperative solutions such as worker co-operatives.

Japanese business cooperation

Japanese small businesses are typically strongly cooperating and sub-contracting between companies, also for the rehabilitation of (struggling) small enterprises. There is a system of Small and Medium Enterprise Cooperatives based on the SME Cooperative Act from 1949, facilitating small and medium enterprises that lack financial resources in the conduct of joint businesses based on a spirit of mutual-aid to raise their economic status. The joint business cooperatives are, e.g., joint store associations, chain business associations, joint investing companies and voluntary groups.

The Japanese business system, also described as “co-opetition”, a mix of severe competition and collectivist Japanese culture, may be a fertile ground for #platformcoopjp. On the other hand, tendencies of specializing employees to contribute to a collective raise the question of how easily employees can assume initiative and more active (intrapreneurship) roles in case of becoming part of an employee-owned/managed organization.

https://www.facebook.com/platformcoopjp

The Platform Cooperativism Japan (PCJ) Consortium is continuing to collaborate and research for the exploration of opportunities in applying co-operative (platform) solutions to business successions and share the lessons learned also outside of Japan.

For an overview of Japanese socio-economic situation and the #co-operative landscape, please see the following articles (https://mathias-sager.com/2017/10/19/cooperatives-in-japan-article-series-overview/)

 

References

Ministry of Economy, Trade and Industry (2016). White Paper on Small and Medium Enterprises in Japan 2016. The Small and Medium Enterprise Agency

Kubota, N. (2010). 非親族承継における所有と経営の分離. 日本経営診断学会論集, 9145-151. doi:10.11287/jmda.9.145

[Net Neutrality] (Cyber) Territory Development: Owned by Landlords or by the People?

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The king has, in the struggle of defending his crown, given the virtual land to the landlords. Now the peasants pay the tolls to the privileged class who rules the online territory for the maximization of its own financial profits and influence. How will the insurgency look like? Time for (re-) new(-ed) alliances for effective and hopefully non-violent rebellion.

Part of the solution:

Platform Cooperativism Japan (PCJ)

Platform Cooperativism Japan (PCJ) connects key stakeholders of the emerging platform economy ecosystem to create synergies in the pursuit of increased shared value, ownership, and governance. The PCJ Consortium supports the cooperative digital economy through research, experimentation, education, advocacy, documentation of best practices, technical support, the coordination of funding, and events.

Inspiration from the History of Switzerland:

The Old Swiss Confederacy began as a late medieval alliance between the communities of the valleys in the Central Alps, at the time part of the Holy Roman Empire, to facilitate the management of common interests such as free trade and to ensure the peace along the important trade routes through the mountains. With the rise of the Habsburg dynasty, the kings and dukes of Habsburg sought to extend their influence over this region and to bring it under their rule. The foreign landlords collected tolls from bridges. Anti-Habsburg insurgences sprung up, but were quashed quickly. This time of turmoil prompted the Waldstätten to cooperate more closely, trying to preserve or regain their Reichsfreiheit. On August 1, 1291, an Everlasting League was made between the Forest Communities for mutual defense against a common enemy. The three founding cantons of the Schweizerische Eidgenossenschaft, as the confederacy was called, managed to defeat Habsburg armies on several occasion, and ensured a de facto independence from the empire. The Freibrief, or freedom charter, to “the people of the valleys,” recognized and formalized in law the independence from the Habsburg that they had gradually won in fact.

https://en.wikipedia.org/wiki/Growth_of_the_Old_Swiss_Confederacy, https://en.wikipedia.org/wiki/Swiss_neutrality

Platform Cooperativism Japan (PCJ): Intergenerational, Multidisciplinary, and Cross-Cultural

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Toot, no tweet anymore! Mastodon: The co-operatively run Twitter alternative

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Social networking, back in your hands

The world’s largest free, open-source, decentralized microblogging network

How awesome is that!

For more information, check: https://joinmastodon.org/

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Find your perfect community

Mastodon isn’t one place and one set of rules: it’s thousands of unique, interconnected communities to choose from, filled with different people, interests, languages, and needs. Don’t like the rules? You’re free to join any community you like, or better yet: you can host your own, on your own terms!

Take control of your content

With powerful tools to control who sees your posts and a 500-character limit, Mastodon empowers you to share your ideas, unabridged. The best part? All posts are in chronological order, not “optimized” to push ads into your timeline. With apps for iOS, Android, and every other platform imaginable, Mastodon is always at your fingertips.

Putting the user first

You’re a person, not a product. Mastodon is a free, open-source development that has been crowdfunded, not financed. All instances are independently owned, operated, and moderated. There is no monopoly by a single commercial company, no ads, and no tracking. Mastodon works for you, and not the other way around.

Feel safe in your community

Mastodon comes with effective anti-abuse tools to help protect yourself from online abuse. With small, interconnected communities, it means that there are more moderatorsyou can approach to help with a situation. This also means you can choose who sees your posts: friends, your community, or the entire fediverse.

Additional features

  • Robust anti-abuse tools
  • Flexible post filtering
  • A huge audience
  • Easily deploy your own
  • They’re called toots
  • Embed media in your posts
  • Built on open web standards
  • Spoiler warnings
  • You decide what’s relevant

 

Satodigi(tal): The Vision of Co-operative Platform-Enabled Sustainable (Digital) Production Landscape Management

Draft formulation of a Japan-specific vision from a Platform Cooperativism Japan (PCJ) perspective.

PCJ legend

PCJ strategy

Escaping (Psycho-)Logic Traps for Better Solutions

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Summary. Social traps are situations in which individuals take rational (and often egoist) short-term decisions that, however, lead to negative collective results in the long-term. Some psycho-(logic) traps involve an isolating and limiting view on available behavioral choices. Because everyone needs to feel competent to take future action, the failure trap lets people deny their potential for further learning and engage in task-irrelevant actionism. The sunk cost fallacy is such an example in which, due to already made investments, there is a reluctance to change the unsuccessful course of behavior. Most social issues are not unfortunate events; they have to do with whether we base our solution design on observations rather than assumptions, and whether we accept our duty to act as if we trusted others, although there is always evidence for peoples untrustworthiness. Rather than limiting our fight for survival on individual competition, we can act as institutional entrepreneurs, guiding groups, and societies towards a better future.

Continue reading Escaping (Psycho-)Logic Traps for Better Solutions

Learning from differences and collaborating in diversity according to Lev Vygotsky

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Content. (1) Individual embodiment of increasingly global social contexts, (2) Globally influenced mediation of learning, (3) Extension of the proximate to a collaborative zone of development, (4) Integrating differences for rich and demanding learning opportunities

Continue reading Learning from differences and collaborating in diversity according to Lev Vygotsky

Scaffolding Cooperative Learning

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Human interactions don’t lack technical but rather cooperative communication skills. The good news is that pro-social behavior can be learned. Collective argumentation is one means to scaffold learners’ engagement in group work. Also, the negotiation of values is vital for achieving a shared sense of agency and accountability between teachers and students. In computer-enabled learning, consequential engagement in the form of enabling equitability and showing the benefits beyond single contributions, as well as using game formats are promising pathways to progress cooperation in learning environments.

Continue reading Scaffolding Cooperative Learning

Individual and Collective Products and Producers of Society

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Content 1. Development of agentic power, 2. Forethought, intentionality, reactiveness, and self-reflection, 3. Collective efficacy: shared belief in agency, 4. Applied collective agency

Continue reading Individual and Collective Products and Producers of Society

Platform Cooperativism: Democratically Run Digital Organizations

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Cooperatives in Japan (Article Series): Part 4/4 – Overview of the Japanese Cooperative sector

Overview and Conclusion article for Part 1 – Part 4, please see here.

In this article, several Japanese co-operatives of different types and from various sectors are briefly introduced. The goal is not to create a directory in the sense of a comprehensive list, but rather to distill essential characteristics of the co-operative sector and the solidarity economy in Japan. The facts presented in this article need to be understood in the context of the specific Japanese conditions and challenges as documented in Part 1, cooperative advantages as shown in Part 2, and the laws and customs applicable to the social economy in Japan as depicted in Part 3 of this article series.

Overview of Cooperatives in Japan 

japan coops infograph 1.pngInfographic 1. Overview of Cooperatives in Japan (1/2) [1]

japan coops infograph 2.pngInfographic 1. Overview of Cooperatives in Japan (2/2) [1]

Examples of Japanese Cooperatives

The examples chosen for the second part of this article do not represent a complete picture of the cooperatives in Japan. The selection, however, provides the opportunity to illustrate important characteristics of the cooperative economy in Japan across different types and various industry sectors in which co-operatives are operating. A focus is put on worker cooperatives as particularly relevant for digital businesses in the sharing economy (for further details, please see LINK Platform Cooperativism)

Table 1. Co-op examples by type

GeneralJapan International Cooperation Agency (JICA)
ConsumerJapan Consumer’s Cooperatives Union (Nisseikyo)
Seikatsu Club Consumers’ Co-operative Union
WorkerWomen’s Worker Cooperative (WWC)
Japan Worker’s Cooperative Union (JWCU)
Japanese Institute of Co-operative Research (JICR)
Seikatsu Club Consumers’ Co-operative Union’s Depot’s run by workers’ collective
Fukushi Club
Independent worker cooperatives
NPOs managed by workers’ collectivesAtsugi Human Support Network

Table 2. Co-op examples by industry sector

AgricultureNational Federation of Agricultural Cooperative Associations (ZEN-NOH)
Central Union of Agricultural Cooperatives (Nokyo)
Japan Agricultural Cooperatives (JAC, JAs)
FinanceAgricultural Cooperatives Credit Division (incl. the Central Agriculture Bank)
Mutual aid co-ops
The women and citizens’ community bank
Eitai Credit Union
Green Coop Fukuoka
Health, CareJWCU Home Helper Training Centers
Cooperative hospitals
Senior Co-operative (Koreikyo)
Ayumi Care Service
Fukuoka Elderly Person’s Co-op (EPC)
Enjoy Sports Club Uonuma
FoodChisan-Shisho movement
EcologyEcoTech
TransportWorkers cooperative taxi cab business in Fukuoka
Electronics R&DAssociation of Super-advanced Electronic Technology (ASET)
HousingCondominiums

In general, the Japan International Cooperation Agency (JICA) is an overarching organization that is collaborating with the Ministry of Education, Culture, Sports, Science and Technology in Japan, for example for research related to cooperation and co-operatives [2].

Co-op Examples by Type

Consumer Co-operatives

Japan Consumer’s Cooperatives Union (Nisseikyo)

The figures of the largest consumer cooperative in Japan are impressive with its 60 million members (of which the majority are women), it’s JPY 1 trillion (USD 10 billion) capital and annual sales of JPY 3 trillion (USD 30 billion) in 2,668 shops across all prefectures in the country. Because of lower prices, the organization is even importing vegetables and processed food. Because Nisseikyo’s members do not have a voice in the leadership of the company, it can’t be counted as being part of the real solidarity economy organization [3]. One of the exceptions among Japanese co-ops that can be seen to genuinely belonging to the solidarity economy is the Seikatsu Club Consumer’s Co-operative Union as presented next [3].

Seikatsu Club Consumers’ Co-operative Union 

The Seikatsu Club Consumers’ Co-operative Union is only a small part of Nisseikyo but has still 310,000 members in 29 co-ops across 19 prefectures. The Seikatsu Co-op won the Right Livelihood Award in 1989 [3].

Worker Co-operatives

Although worker-owned businesses have increased in number and size, only 30,000 workers are working cooperatively in whole Japan, with a concentration in the urban centers Kanto and Kansai. The growth since the 1970s is prolonged and small, compared to the overall working population [4] that is today around 76 million people. One problem that needs to be addressed is that there is no proper legislation for worker co-operatives in Japan [5] as detailed in Part 3 of this article series. Furthermore, the social movement may be not very well unified and orchestrated as some worker-owned organizations prefer the term ‘collective’ over ‘cooperative’ to emphasize the sovereignty of the individual [5]. It is though not only Japan struggling to grow the worker co-op movement. It is estimated that in the US around 350 worker cooperatives employ just 5,000 people [6].

If the cooperative worker movement doesn’t gain traction soon, it will, despite its proven potential, always stay marginal and irrelevant. Respectively it will be too late to solve the economic, social, and environmental issues resulting from cheap labor, inequality, and undemocratic practices by shareholder profit maximization that are aggravating from a global perspective.

Women’s Worker Cooperative (WWC)

The Women’s Worker Cooperatives with its 12,000 worker members accounts for the largest single group of organizations in the Japanese worker cooperative landscape. These WWC cooperatives allow the housewives to work part-time and therefore solve existing labor market constraints, tax issues, and equal employment opportunities, although they mostly don’t need the additional salary for a sufficient overall household income, albeit they are contributing significantly to the new middle-class lifestyle. The success of the WWC and the target women it helps to find suitable work indicates a huge potential of hundreds of thousands of Japanese women who might welcome such opportunities as well [4].

Japan Worker’s Cooperative Union (JWCU) 

After the WWC, the Japan Worker’s Cooperative Union (JWCU) represents with 9,000 members in 2005 the second largest account of worker cooperatives. The union innovatively remodeled itself into a business owned and democratically run by its workers who are provided with work contracts with an array of other organizations. “What had once been a labor union of the unemployed had been gradually transformed into a business owned and managed by its members as a worker’s cooperative [4, p. 7]”. The JWCU provides work crews into consumer co-op distribution centers, hospitals, and park cleaning and maintenance businesses. It has also expanded into more capital and knowledge-intensive industries such as home helper training centers and construction cooperatives [4]. Further examples are a high-school cooperative, a shoemaking collective, a bakery, and a theatrical company, etc. [5].

The JWCU publishes a newspaper ‘Rokyo Shimbun’ (Workers’ Co-op Newspaper) that is issued three times a month, and a bi-monthly magazine ‘Shigoto no Hakken’ (Discovery of Work), both of wich are promoting the worker co-ops activities in Japan and abroad [4]. The JWCU is pushing since years the agenda for adding a distinct worker-owned legal form to the currently available forms of personal ownership, partnership, and limited liability joint stock corporation. Hopefully, joint effort together with the WWC will make a new law possible. What would still be missing then is the mobilization of the young people who are currently underrepresented in the JWCU’s membership [4].

Japanese Institute of Co-operative Research (JICR) 

The Japanese Institute of Co-operative Research (JICR) was founded in 1991 by the JWCU. It serves as the central national and international research organization for its member activists and worker cooperatives. The Institute’s monthly journal ‘Kyodo no Hakken’ (The Discovery of Cooperation’ promotes worker cooperatives and their benefits for workers’ rights and communities’ thriving, including news from around the globe, with a traditional focus also on the European worker cooperative movement [4].

Seikatsu Club Consumers’ Co-operative Union’s Depot’s run by workers’ collective

The Seikatsu Club Consumers’ Cooperative contains various smaller groups like the ‘depots,’ which are run by members who organize as workers’ collectives built on democratic decision-making processes. The depots, therefore, constitute worker cooperatives within the broader Seikatsu consumer co-op. Such workers’ collectives’ membership basis is increasing fast [3].

Fukushi Club

The Fukushi Club is another group of workers under the umbrella of the Seikatsu Club Consumers’ Cooperative. In the Fukushi Club’s case, women who provide care organize as cooperative organizations to institutionalize the ‘shadow work’ and empower both the care receivers and providers [7].

Independent worker cooperatives

There are also some independently established Japanese worker cooperatives, such as the Paramount Shoe Company that was rebuilt through its union after a business failure. EcoTech that span off from the Toshiba conglomerate is another example of employee union initiated democratic worker cooperative [4].

NPOs managed by workers’ collectives

Atsugi Human Support Network

Only after 1998 citizens’ organizations could become legal entities through the NPO Promotion Law that started to encourage volunteering work for vulnerable people without tangible support though. Member housewives of the Seikatsu Club Consumer’s Cooperative in Atsugi city (Kanagawa prefecture) wanted to initiate a ‘local party’ to organize for local elections. The Atsugi Human Support Network became an alliance of 22 NPOs that are managed by workers’ collectives [3].

Co-op Examples by Industry Sector

Agricultural Co-operatives

National Federation of Agricultural Cooperative Associations (JAC Zennoh) 

The National Federation of Agricultural Cooperative Associations (JAC ZEN-NOH) with its 3 million national farm household members and the 12,500 employees is the world’s largest co-op organization [8]. It represents the top of the pyramid of the agricultural cooperatives organized on local, prefectural, and national level [9]. The JAC Zennoh is in charge of sales activities on the national level for its farmer’s co-operatives (JAC) members [10].

Central Union of Agricultural Cooperatives (JAC Zenchu, Nokyo) 

The farmer’s co-operatives (JAC) are organized under the Central Union of Agricultural Cooperatives (JAC Zenchu, Nokyo). The central union, as well as the farming co-operatives, don’t give voting rights to their individual members to participate in the leadership of the organization, which is organized like a corporation [3]. The JAC Zenchu is in charge of planning on national level for its JAC members [10].

Japan Agricultural Cooperatives (JAC, in short, the JAs)

It has to be differentiated between traditional village farming cooperatives, farmers’ groups organized as “cooperative farming groups,” and the members of the national entities JAC Zennoh and JAC Zenchu, which are the Japan Agricultural Cooperatives (JAs).

Financial Co-operatives

Agricultural Cooperatives Credit Division (incl. the Central Agriculture Bank)

The Agricultural Cooperatives Credit Division including the Central Agriculture Bank with the related prefectural credit unions providing mutual credit and insurance services are one of the most profitable operations of the Japanese agricultural cooperatives. Their members are farming-related organizations and non-farming individuals residing in cooperative communities [11].

Mutual aid cooperatives

The mutual aid cooperatives are organized into the national ‘Zenrosai’ federation and count 46,340 units. Although they use the terms mutual aid and cooperatives, they are not adhering to member voting rights and therefore instead have to be affiliated with commercial banks than with the solidarity economy [3].

The women and citizens’ community bank

These organizations are operated by women providing services exclusively for women, i.e., providing loans to according NPOs. In Japan, there is no legal status for non-profit citizen banks as this was so far not supported by governments, why the women and citizens’ community bank operates under a normal moneylender license [3]. However, problems in the commercial banking sector have increased the interest in the possibility to establish non-profit banks. There are now Shinkin (small and big loans) and Shinkumi (small loans) banks who provide services to citizens and SMEs [12], able to revitalize deprived communities [14], and which are of considerable importance in the Japanese financial market [13].

Eitai Credit Union

It is necessary to facilitate inter-cooperative mutual financial aid for developing the social economy. The Etai Credit Union in Tokyo is such an institution providing loans to cooperatives and collectives in consultation with NPOs [5].

Green Coop Fukuoka

Green Coop Fukuoka lends money to both member and non-member indigent people by using assets from members. The government of the prefecture Fukuoka is considering the initiative as crucial to develop financing of an inclusive society [15].

Health, Care

The government has encouraged co-operatives to provide welfare services as a business because they saw the rural and urban potential that could be unlocked from female care workers in the co-op memberships. Today, co-operatives make for about 1% of elderly care services provided under the Act for Long-term Care Insurance LTCI [16].

JWCU Home Helper Training Centers

Care for the elderly involves help at home. For the training of home helpers, the JWCU offers licensing programs that allow the certified home helpers afterward to reimburse their services through the national homecare insurance program [4].

Co-operative hospitals

In association with the Japan Communist Party, there exist member physician-run hospitals. These are the hospitals that were mentioned before as where JWCU worker co-operatives provide their hospital services such as cleaning, shop management, and office staffing [4].

Senior Co-operative (Koreikyo)

As of 2006 each of the Japanese prefectures had opened a Senior Co-operative (Koreikyo) chapter totaling in over 100,000 members nationwide with high growth expectations. The co-operative is, as the name is telling, by and for the elderly, supporting them to stay at home as long as possible and wished through education and home care [4].

Ayumi Care Service

In response to a shrinking and aging population, a 40-year-old woman set up a care business in her town in 2000. Ayumi Care Service today has 35 full-time workers, most of them member-owners who invested the equivalent of USD 500 as share capital and earn a monthly salary of around USD 1,700. Ayumi Care Services accepts any service requests, therefore being often caring about lonely elderly with no relatives and even taking care of difficult death situations [16].

Fukuoka Elderly Person’s Co-op (EPC)

Grown out of the JWCU workers’ co-operative movement, the Elderly Person’s Co-op (EPC), today there is a national federation of 22 EPCs with 45,000 members, of which 32,000 are workers. All the care workers are members, albeit the legal status of the co-op is a consumer cooperative. The services rendered include in-home and community-based care and vocational education for elderly and handicapped. The EPCs entered the LTCI scheme in 2000, and its members are rapidly increasing. Also, as many members did not have co-operative experience, the organization is investing a lot in cooperative education.

Enjoy Sports Club Uonuma

Although the Enjoy Sports Club Uonuma is instead a loosely defined interest group than a real co-operative, it is an excellent example of how citizens can organize to address social issues. In this case, the club achieved significant health prevention effects such as reduction of depression with children and elderly, addressing inactivity (especially in winter) with sports programs [17].

BioBank Japan (BBJ) Project

The BioBank Japan (BBJ) Project represents a cooperative research project implementing a patient-based biobank, having collected the medical data over a 5-year period from over 200,000 patients. The registry allowed the analysis of diseases for improved personalized medicine [18]. Although not a co-operative owned by the patients, it shows the potential of user cross-institutional collaboration and user registration for sharing health data for research purposes, as Midata.ch in Switzerland is a parade example of letting the data providers own and decide on the use of their data as co-op members.

Food

Chisan-Shisho movement

The chisan-chisho movement promotes local food consumption since the 1990s as a response to the concern of disappearing local farms and scandals in the food sector. The initial grass-roots movement is today organized by government and farmers’ cooperatives. Despite its success, the chisan-chisho still needs to find additional ways on how to better capitalize on the local appeal of agrifood to become a more powerful political force [10].

Ecology

EcoTech 

EcoTech is an interdisciplinary co-operative that unites scientists, engineers, technicians, business people, and advocates for co-operatives and community activists. They create energy-efficient products that help clean the environment. An example of EcoTech’s international products is the bio-active home composter that decomposes organic waste into water and CO2. EcoTech has the aspiration to become the center of a social business movement including all industry sectors and types of players, including worker, consumer, and producer cooperatives [4].

Transport

Workers cooperative taxi cab business in Fukuoka

Similar to counterparts in different cities around the world, a taxi cab business emerged as a worker cooperative in Fukuoka, as also the Research Institute’s journal was reporting already in 2005 [4].

Electronics R&D

Association of Super-advanced Electronic Technology (ASET)

The Association of Super-advanced Electronic Technology (ASET), a Japanese electronics R&D co-op headquartered in Tokyo, got USD 300 million in Japanese government funding for research on semiconductors, magnetic storage, and display devices.

Housing

After the economy bubble from the late 1980s when it became difficult to purchase land, housing “rental-type” co-operatives in the form of condominiums became popular. The system is favorable for letting elderly living in their apartments although they do not own it [19].

Conclusion

After the study of cooperative examples in Japan in the context of identifying success factors for promoting the co-operative organizational form for a fairer future of work, the following points seem important to keep in mind for future efforts to advance the cooperative and social economy overall:

  • Worker co-operatives need to get a clear and supportive legal basis in Japan, and themselves need to develop strategies to gain influence on the social agenda [5].
  • I think it should be more clearly distinguished when using the term co-operative, as in cases of so-called big Japanese co-ops that do not grant member’s a voice in the leadership of the organization. One member one vote is, however, the most vital element of cooperative governance as only ownership and decision rights are effectively empowering the contributing citizen members.
  • Although the young people are primarily affected by the challenging labor market, they don’t seem to be connected to the worker cooperative movement. Some few examples constitute JWCU worker groups consisting of primarily young people [4]. For co-operatives to be successful, they need to be able to speak to the youth not only as volunteering organization but as a competitive better alternative to the neo-liberal capitalist economy.
  • Increasing the awareness about co-operatives should be a priority as often the young people just don’t know about its possibilities [4].
  • Millennials may appreciate opportunities for work-life balance. Co-operatives might be able to provide such a balance in addition to purpose and identification. Furthermore, co-operative governance can be designed to reward performance, therefore supporting personal growth in any ways.
  • Solidarity between older and younger generation should also enable financing of co-operative start-ups of young people by the member funding of older more affluent people. Social impact investment should account for such opportunities.
  • While grass-roots efforts are essential, the co-operative way should also be supported top-down as a political priority. A co-operative economy can not only be profitable but by not passing excess profits to just a few it is also able to provide for welfare benefits and community development where often tax paid government efforts failed in demonstrating sufficiently sustainable effects.
  • All the co-operative seeds should be honored, but it has to be stated that the co-operative economy is negligible and toothless compared to the overall economy. There is no reason for the co-operative movement to rest on its laurels.
  • Implementing democracy in organizations by giving the member-owners (and employees) a voice and a share are just natural. Therefore, the co-operative way, rather than being an extreme alternative movement, has the potential to be common sense across many political directions.
  • Inter-cooperative cooperation is crucial to bundle the efforts for maximum effect on the growth of the movement. While modest scale for NPOs in welfare services and the solidarity economy is a positive feature, big-scale commercial markets have to be given back from shareholder exploitation to the citizens. Any business can be organized co-operatively.

 

References

[1] International Cooperative Year Commemorative Cooperative National Council (n.d.). Welcome to the Cooperatives Japan Website. Retrieved from http://www.iyc2012japan.coop/whatsnew/101217_01.html

[2] Mizuta, D. D., & Vlachopoulou, E. I. (2017). Satoumi concept illustrated by sustainable bottom-up initiatives of Japanese Fisheries Cooperative Associations. Marine Policy, 78143-149. doi:10.1016/j.marpol.2017.01.020

[3] Kitazawa, Y. (2010). Japan’s lost decades and a women-led socio-solidarity economy. Development, 53(3), 416-420. doi:10.1057/dev.2010.46

[4] Marshall, B. (2006). Japan’s worker co-operative movement into the 21st century. Asia-Pacific Journal: Japan Focus, (23),

[5] Ishizuka, H. (2002). The Social Economy Sector in Japan. Annals Of Public & Cooperative Economics, 73(2), 241.

[6] Abello, O.P. (2016, January). NYC Set to Triple Number of Worker Cooperatives. Retrieved from https://nextcity.org/daily/entry/nyc-worker-cooperatives-jobs-increase

[7] Lord, A., & Mellor, M. (1996). Women and the cooperative provision of care: the example of the ‘Fukushi Club’ in Japan. Economic And Industrial Democracy, 17(2), 199-220.

[8] Chesnick, D. S., & Liebrand, C. B. (2007). Global 300 list reveals world’s largest cooperatives. Rural Cooperatives, 74(1), 28-31.

[9] Gherman, R., Dincu, A., Milin, A., & Brad, I. (2016). Agriculture and Agricultural Cooperatives in Japan – A Model for Cooperativization of Agriculture from Romania. Scientific Papers: Animal Science & Biotechnologies / Lucrari Stiintifice: Zootehnie Si Biotehnologii, 49(2), 212-216.

[10] Kimura, A. H., & Nishiyama, M. (2008). The Chisan-Chisho Movement: Japanese Local Food Movement and Its Challenges. Agriculture And Human Values, 25(1), 49-64. doi:http://dx.doi.org.liverpool.idm.oclc.org/10.1007/s10460-007-9077-x

[11] Klinedinst, M., & Sato, H. (1994). The Japanese Cooperative Sector. Journal Of Economic Issues (Association For Evolutionary Economics), 28(2), 509.

[12] Glass, J. C., McKillop, D. G., Quinn, B., & Wilson, J. S. (2014). Cooperative Bank Efficiency in Japan: A Parametric Distance Function Analysis. European Journal Of Finance, 20(1-3), 291-317.

[13] Yamori, N., Harimaya, K., & Tomimura, K. (2011). The Roles of Outside Directors in Cooperative Financial Institutions: The Case of Japan. Banks And Bank Systems, 6(4), 11-14.

[14] Chris, M., & Sachiko, N. (2010). How can co-operative banks spread the spirit of co-operation in deprived communities?. Social Enterprise Journal, (2), 162. doi:10.1108/17508611011069284

[15] Sachiko, N. (2015). A ROLE OF SOCIAL FINANCE BY A COOPERATIVE: A CASE STUDY OF GREEN COOP FUKUOKA, JAPAN. ACRN Oxford Journal Of Finance & Risk Perspectives, 4(3), 1-18.

[16] Kurimoto, A. )., & Kumakura, Y. ). (2016). Emergence and evolution of co-operatives for elderly care in Japan. International Review Of Sociology, 26(1), 48-68. doi:10.1080/03906701.2016.1148341

[17] Iguchi, S., Niwayama, M., & Takahashi, H. E. (2015). A conference report of the interprofessional satellite symposium in Uonuma, Japan: an international exchange on the future of community care. Journal Of Interprofessional Care, 29(3), 284-287. doi:10.3109/13561820.2014.966541

[18] Nagai, A., Hirata, M., Kamatani, Y., Muto, K., Matsuda, K., Kiyohara, Y., & … Kubo, M. (2017). Overview of the BioBank Japan Project: Study design and profile. Journal Of Epidemiology, 27(3S), S2-S8. doi:10.1016/j.je.2016.12.005

[19] Ekuni, T., & Jung, J. (2015). 日本初の賃貸型コーポラティブハウスの居住者主体による賃貸システム 改変の変遷に関する研究. 都市住宅学, 2015(91), 124-129. doi:10.11531/uhs.2015.91_124

Cooperatives in Japan (Article Series): Part 3/4 – The Japanese Social Economy, Policymaking, and Co-operative Governance

The “Third Sector” (Social Economy)

Overview and Conclusion article for Part 1 – Part 4, please see here.

The “third sector,” or social economy, is the space of social issues that are left by government and private sector (corporate) failures. It is the arena in which the two actors after-negotiate how to share the burden to resolve the problems they feel could fire back if not addressed.

 mathias-sager-social-economu.jpg

Japanese governmental statistics (SNA, System of National Account) defined ‘industry’ as for-profit businesses only until 1998, why there was no clear concept for a non-profit organization (NPO) [1]. Since then the NPO Law allows civil society organizations to easily acquire nonprofit corporation status [10]. The social sector represented by non-governmental organizations (NGOs), NPOs, and cooperatives is thought to cover social problems like community development, environmental protection, and social movements. Unlike informal associations, NGOs, and NPOs, cooperatives are the only organizational form that represents the ‘Institutionalized’ Social Economy. Therefore, the cooperatives should be assigned a leadership role in the social economy sector. In Japan, the caption NPO is more prominent than social economy [1].

Cooperatives are by definition only a resource for their members; they cannot take the place of the state as a universal provider, without having the responsibilities and resources of the state [14].

In East Asian countries state influence on social enterprises including cooperatives has been stronger than in other regions. This bears the risk for social organizations to lose independence from public agencies. Another threat is that businesses focusing on financial independence and market performance can lose sight of their social responsibility [2]. This might be less the case for cooperatives that are consequently governed of, by, and for their active members.

Positioning of social enterprise for three regions

Figure 1: Positioning of social enterprise for three regions [2]

The “ideal-type” social enterprise underlines a participatory dynamic in the governance structure [2].

As the social enterprise concept is starting to further develop in Eastern Asia, it is essential to answer the question about the most suitable governance model. It was found that in Eastern Asia, even more than in the US, a participatory governance model, and cooperative principles inspired organizational forms could represent the ideal-type of autonomous social organizations. More innovative and flexible types such as, for example, multi-stakeholder cooperative models require more research and experience [2].

Cooperatives are always “collectives” as they involve member participation in the governance structure. But “collectives” don’t necessarily provide for member ownership structures as inherent in the co-operative. The same is true for so-called buying (or other) clubs whose members carry out an activity together, whether organized as an NPO social club or as a cooperative.

There is simply no easy, legal way to organize worker co-operation in Japan yet, and this must surely be a barrier to their spread [3, p. 16].

Co-ops in Japan are traditionally regulated by sectors, e.g., the Consumer Co-operative Act (1948), The Agricultural Co-operative Act (1947), and the Fishery Co-operative Act (1948). Worker cooperatives are particularly promising to address inequality of income and opportunity, as well as for employee motivation, performance, and in-house innovation. However, in Japan, they lack legal recognition, why worker members often organize in organizations incorporated under the Small and Medium-sized Enterprise (SME) Co-operative Act (1949) or the NPO Act [4]. In other words, it is not forbidden anymore for workers to cooperate for consumption, credit and marketing purposes, but there is also no law positively supporting such aspirations. That’s the reason why the Japan Institute for Cooperative Research (JICR) does promote a new worker law [3].

As discussed in the article “Japanese Cooperatives: Part 1 – Challenges” too, Stock Ownership Plans are not available in Japan to restructure ownership, and the requirements for establishing a joint stock corporation are difficult in Japan as elsewhere. An unusual but clever way went the Senior Cooperative “Koreikyo” that is a consumer co-operative assuming features of a worker co-operative. A currency-like ticketing system achieves the hybrid type of cooperative operation. Members buy books of tickets and use the tickets for paying for co-op services. The services providers redeem later the collected tickets to cover their compensation [3].

Policy Making in Japan

The labor market in Japan has become more challenging. Besides vocational education, career coaching, and traditional start-ups, a new system to incorporate NPOs and worker cooperatives should be prioritized by policy makers [5]. Other countries are also starting to invest more than ever into the development of worker cooperatives that foster dignity and wealth for all as the example of New York initiative for tripling the number of worker cooperatives shows [6]. Also, the conflict between fiscal policy constraints and social policy development can be best resolved by developing the social economy sector and mobilizing its resources and communities [1].

Contracted employees today in Japan don’t enjoy a legal basis that is protecting them as employees; the Civic Code needs still to be adjusted for protective provisions going beyond a service contract and including social welfare for contractors who in fact are engaged in work as employees [5].

The “iron triangle” of Liberal Democratic Party (LDP) politicians, bureaucratic ministries, and vested interest groups—still represents a formidable and functioning element of Japan’s central governing process [7].

Regarding policy making it was found to be challenging to get access to locked circles of party-bureaucracy-interest-group policymaking in economic and social sectors. This situation stemmed mainly from the example of closed-door decision making in the agricultural policy triangle. The Japan Agricultural Cooperatives (JA) reform intended to no longer view the JA as the sole voice of the farming sector and to reduce JA’s most dominant position as a pressure group. The reform is considered to be radical, but ultimately also quite limited in its effect [8]. The differing interests of large international corporations and the local small-scale businesses (farmers) have slowed down (agricultural) policy reforms. Therefore, the JA-Zenchu will likely remain the most powerful and influential interest group in Japanese politics [9]. However, the autonomy of JA is limited too because of its traditional receipt of state donations [1].

Co-operative Governance

Cooperatives are guided by their identity, values, and principles.

Co-operative Identity: A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly owned and democratically-controlled enterprise [10].

Co-operative Values: Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, co-operative members believe in the ethical values of honesty, openness, social responsibility and caring for others.

Co-operative principles: 1. Voluntary and Open Membership, 2. Democratic Member Control, 3. Member Economic Participation, 4. Autonomy and Independence, 5. Education, Training and Information, 6. Co-operation among Co-operatives, 7. Concern for Community

In general, cooperative governance can be clarified with a model of four pillars.

TeamingSuccessfully working together to achieve common purpose
Accountable EmpowermentSuccessfully empowering people while at the same time holding them accountable for the power granted.
Strategic LeadershipSuccessfully articulating the cooperative’s direction/purpose and setting the organization up for movement in this direction.
DemocracySuccessfully sustaining a culture in which people choose meaningful ways to participate for both individual and common good.

Table 1. The four pillars of cooperative governance [11]

When a co-operative bank acts as “community organizer”, undertaking tasks which are outside its usual sphere of activities as financier, and its board includes members of the social enterprise sector, its positive impact on community development is more effective [13, p. 162].

Capable management is important. Some literature from Japan reports on the need in different sectors for cooperatives to upgrade their management methods [1]. According to research in 2006, 63% of past co-operative bankruptcies were due to management problems. It was also found that the presence of outside director on the board of directors had a positive influence on management performance. However, there is usually no pressure from the membership to require outside directors. Therefore, some suggest that authorities such as the Financial Services Agency (FSA) shall stress this need [12].

To make raising equity for cooperatives easier, it appears to be important to understand the nature of the transferable membership capital method [15].

In general, it is known that cooperatives have it harder to get funding as compared to traditional capitalist businesses [15], although there are signs that social impact capital, or purpose capital, is on the rise. Indeed, co-op member’s favorite survey response to work at a co-operative was the one of seeking “ikigai”, i.e., “a purpose in life” [3]. It might be, as a general pattern, that where the money can come from, capitalist monetary values predominate social considerations. Therefore, due to limited profit maximization for single individuals, limited financing is a significant growth limitation for the cooperative economy, although a membership market could provide for the same economic potential. To solve this problem, some cooperatives have resorted to the method of issuing transferable membership capital, e.g., a housing cooperative raising equity capital by issuing shares and investing it in the construction projects, and after that trading the shares on the open market [15]. It is also necessary to create financial mutual aid systems in the social economy such as initiatives started by the Eitai Credit Union in Tokio [1].

How independent are SME’s in Japan?

Japanese SME’s for their survival need to form alliances with major firms that are dominating the markets. Subcontracting is so extensive in Japan that SME’s independence needs to be questioned. Such domestic loyalty networks often served as de facto trade barriers [16] and also need to be taken into account by any new co-operative businesses.

What is needed for the solidarity economy in Japan is to form loose networks, like the Atsugi Human Support Network, at the regional, national and global levels, and to engage in political action to fight against neo-liberalism [17].

Often genuinely collaborative loose networks do, tragically, not evolve without exceptional circumstances. For example, The Emergency Job Creation (EJC) program as a response to the 2011 Great East Japan Earthquake disaster achieved the collaboration among stakeholders as diverse as NPOs, NGOs, social welfare corporations, and other companies [18]. It is to hope that the solidarity economy can be more successfully promoted in the future on local, regional, and global level [17]. Ways must be found how to convince also private corporations who currently value monetary profit instead of social orientation to contribute to solidarity more consequently [1].

As per the co-operative governance principle of cooperation among cooperatives, it is critical to act on this aspect more intensively. Shared interests and synergies can be used better to intensify inter-cooperative cooperation. For example, all forestry, agriculture, consumer, and fisheries have been concerned about improved water environments. Similarly, any cooperative as connected to the member-community can facilitate access to and provision of in-home services such as healthcare together with other cooperatives [1].

the extension of the coop movement.png

The Japanese Cooperative Council (JCC) links to the International Co-operative Alliance (ICA), a similar systematic national connector is missing [1]. For the cooperatives and related organizations in the broader digital economy, the Platform Cooperativism Japan (PCJ) Consortium has started to assume such a role. There is the risk that cooperatives appear old-fashioned in the eyes of the younger generations. Increased openness, exciting and influential networks of co-operatives might be a means to rejuvenate and strengthen the movement. Academia and national innovation networks that dare to learn from and promote to an also international dimension [19] may play a vital role in that journey too.

 

References

[1] Ishizuka, H. (2002). The Social Economy Sector in Japan. Annals Of Public & Cooperative Economics, 73(2), 241.

[2] Defourny, J., & Kim, S. (2011). Emerging models of social enterprise in Eastern Asia: a cross-country analysis. Social Enterprise Journal, 7(1), 86. doi:10.1108/17508611111130176

[3] Marshall, B. (2006). Japan’s worker co-operative movement into the 21st century. Asia-Pacific Journal: Japan Focus, (23),

[4] Kurimoto, A. )., & Kumakura, Y. ). (2016). Emergence and evolution of co-operatives for elderly care in Japan. International Review Of Sociology, 26(1), 48-68. doi:10.1080/03906701.2016.1148341

[5] Nogawa, S. (2012). The Great East Japan Earthquake and a Future Vision for Labor Law in Japan. Japan Labor Review, 9(4), 105-123.

[6] Abello, O.P. (2016, January). NYC Set to Triple Number of Worker Cooperatives. Retrieved from https://nextcity.org/daily/entry/nyc-worker-cooperatives-jobs-increase

[7] Mulgan, A. G. (2016). Loosening the ties that bind: Japan’s agricultural policy triangle and reform of cooperatives (JA). Journal Of Japanese Studies, 42(2), 221-246.

[8] Mulgan, A. G. (2016). Much ado about something? The Abe government’s reform of Japan’s agricultural cooperatives (JA). Japanese Studies, 36(1), 83-103.

[9] Jamitzky, U. (2015). The TPP Debate in Japan: Reasons for a Failed Protest Campaign. Asia Pacific Perspectives, 13(1), 79.

[10] International Co-operative Alliance (n.d.). Co-operative identity, values & principles. Retrieved from https://ica.coop/en/whats-co-op/co-operative-identity-values-principles

[11] CDS Consulting Co-op (n.d.). Four Pillars of Cooperative Governance. Retrieved from http://www.cdsconsulting.coop/cooperative_governance/4pcg/

[12] Yamori, N., Harimaya, K., & Tomimura, K. (2011). The Roles of Outside Directors in Cooperative Financial Institutions: The Case of Japan. Banks And Bank Systems, 6(4), 11-14.

[13] Chris, M., & Sachiko, N. (2010). How can co-operative banks spread the spirit of co-operation in deprived communities?. Social Enterprise Journal, (2), 162. doi:10.1108/17508611011069284

[14] Lord, A., & Mellor, M. (1996). Women and the cooperative provision of care: the example of the ‘Fukushi Club’ in Japan. Economic And Industrial Democracy, 17(2), 199-220.

[15] Mikami, K. (2015). Raising Capital by Issuing Transferable Membership in a Consumer Cooperative. International Journal Of Social Economics, 42(2), 132-142.

[16] Dana, L. P. (1998). Small but Not Independent: SMEs in Japan. Journal Of Small Business Management, 36(4), 73-76.

[17] Kitazawa, Y. (2010). Japan’s lost decades and a women-led socio-solidarity economy. Development, 53(3), 416-420. doi:10.1057/dev.2010.46

[18] Nagamatsu, S., & Ono, A. (2017). Job Creation after Catastrophic Events: Lessons from the Emergency Job Creation Program after the 2011 Great East Japan Earthquake. Japan Labor Review, 14(1), 112-131.

[19] Miotti, L., & Sachwald, F. (2003). Co-operative R&D: Why and with Whom? An Integrated Framework of Analysis. Research Policy, 32(8), 1481-1499. doi:http://dx.doi.org.liverpool.idm.oclc.org/10.1016/S0048-7333(02)00159-2

[20] About NPO Law (n.d.). How the NPO Law came about and why it is important. Retrieved from http://www.jnpoc.ne.jp/en/nonprofits-in-japan/about-npo-law/