Catherine W. Ng and Evelyn Ng (2009) “Balancing the Democracy Dilemmas: Experiences of Three Women Workers’ Cooperatives in Hong Kong.” Economic and Industrial Democracy 30(2), 182–206.

This paper is a study of three new, radically horizontal worker-coop start-ups in Hong Kong. Worker-ownership is not common in Hong Kong and at the time of the initial research (2004) there were only three worker-owned cooperatives registered in the territory, all of them women’s cooperatives. These three form the basis of this study.

The three new worker cooperatives were founded with the assistance of non-governmental organizations (NGOs), and the authors report that the NGO staff were hands-on in the development of these organizations to the extent that the cooperatives almost certainly would not have been founded without their assistance. Many of the women workers involved were displaced from the workforce and struggled with social exclusion and illiteracy. These coops were founded by the NGOs as opportunities for these women to re-enter the workforce, to develop confidence and new skills, and to provide extra income for their families.

The purpose of this study was to examine two possible ‘contradictions’ in the organization of worker cooperatives: the contradiction between democracy and efficiency, and the related contradiction between democracy and leadership. All three cooperatives were small service/retail businesses (a university tuck-shop, a cleaning coop, and a university canteen) of about ten members each, and all three were radically horizontal, governed by direct democracy with no vertical management structure. Nonetheless, informal leadership did develop and the authors document some of the tensions this created.

Specifically, some of the women came to the coops with more confidence in formal meetings and more experience in running a business, and these women were naturally deferred to when it came to decision-making. The cooperatives used job rotation and other techniques to democratize information and expertise, but these informal leadership structures were still a problem. Informal leaders suffered burn-out, but at the same time, felt trapped in their jobs both because of their commitment to the cooperative ideal and because of their friendship and loyalty to the other women. One woman commented:

“If I leave, I’m afraid the co-op will disintegrate. I worry that many of my colleagues will not be able to find employment then.”

These informal leaders probably would have been able to find work elsewhere, perhaps in management positions, so in effect, they had taken a pay-cut to work at the cooperative. This is obviously not a sustainable or fair situation, but what do you do when some workers are more skilled and confident, but also possibly, more invested in the cooperative, and take on more responsibility and work as a result?

The authors don’t offer any answers, but they do conclude that this tension must be addressed as cooperatives grow or they risk degeneration. Some cooperatives find a balance by carefully adopting some management structures, mixing elements of direct and representative democracy together as they grow. Other cooperatives may decide to radically commit to direct democracy and management by consensus, and may therefore decide to limit the growth of their cooperatives or perhaps to divide their businesses from time to time to avoid having to adopt formal management structures.

However, as Jo Freeman argued in her influential essay, ‘The Tyranny of Structurelessness’, these tensions always lurk in horizontal organizations, and the authors of this study argue that finding a workable and just balance between democracy on the one hand and efficiency and leadership on the other is an on-going and critical problem for all worker-owned businesses.