Both Worker cooperatives and collectives are worker-owned, democratic, and self- managed businesses. However, there are some key differences between the two. The following is a basic breakdown of some of the primary differences:
Mainstream companies make major decisions top-down. In self-managed businesses, however, these decisions are worked on, proposed, and decided by the workers.
Cooperatives: Most cooperatives require simple-majority to pass a vote. That is, only over 50% of workers have to approve a motion for it to be passed.
Collectives: Collectives, however, use a consensus model: this means that every worker must vote “yes” in order to make a decision.
While both cooperatives and collectives reject the hierarchical structure of typical corporations (top-down, in which owners have authority over workers), the two take different approaches to their structures.
Cooperatives: Every worker in a cooperative is also an owner. However, in some larger cooperatives, there exists a form of hierarchy. This might mean that there is a president (elected by the workers), a board of directors (also elected), and so on. However, all major decisions are still made by votes taken in worker assemblies. Yet, most of the time, the smaller the cooperative is the less formal its hierarchy will be – if it has one at all.
Collectives: Collectives tend to strive to abolish any form of hierarchy. This means that no one worker in the collective has any more authority than another worker.
In a conventional company, managers carry out the will and the decisions of the owners. However, in cooperatives and collectives, the workers are the owners. This means that if there are managers, their role is to manage decisions and guidelines set forth by the workers (although it is important to understand that managers are also considered workers).
Cooperatives: Larger cooperatives are more likely to employ managers than collectives because this is often viewed as a form of hierarchy. In many cooperatives with managers, the workers can hire and fire the managers. Most managers, if possible, are also promoted from within the cooperative so that they have familiarity and trust with the workers.
Collectives: Collectives are much less likely to have managers, but when they do, they will often use a system of “rotating” management. This means that one worker serves as the manager for a designated period of time (for example, 3 months) and then another worker takes their place. Some cooperatives also use this practice.
There are many different types of cooperatives and collectives, and the two types can often overlap in similarities. Remember – a collective is always a cooperative, but a cooperative is not always a collective. The descriptions above are not the law, and co-ops can vary greatly in what practices they adopt.