Cooperative Advantage: Rethinking the Company’s Purpose

Pursuing a people-centered cooperative advantage can garner meaningful benefits for employees, customers, and community.

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As companies reopen and recalibrate during these turbulent times, it’s worth asking whether they should resume business as usual or whether their true purpose should instead be reconceptualized. Indeed, capitalism itself is being challenged due to inequities in employment, health care, and education that the pandemic has only emphasized as the model’s limitations have been exposed. COVID-19 has ravaged the well-being of employees and communities and brought renewed attention to the racial injustice experienced by African Americans, much of which is structural and systemic.1 Loyal employees who have been committed to their employers for many years are being unceremoniously let go. The leisure and hospitality sector, for example, has experienced massive layoffs at an unprecedented pace.2

Management theory is mostly based on the writings of early 20th-century scholars whose research orientations were heavily grounded in economics and classical sociology.3 These works portray human beings as an individualistic, utility-maximizing, transaction-oriented species.4 In contrast, a recent op-ed by Al Gore and David Blood argued passionately for a more sustainable form of capitalism, asserting that CEOs must put the welfare of their employees first — as was practiced in the Black business community in the early 20th century.5

During a period from 1900 to 1930 called “the golden age of Black business,” African American businesses experienced tremendous goodwill, support, and financial performance based on their pursuit of a cooperative advantage.6 We define cooperative advantage as the benefits that an organization possesses and accrues due to its people-centered approach to engendering a spirit of care and community, meaningful dialogue, and consensus building, for the benefit of employees, customers, and community.7

Why Pursue a Cooperative Advantage?

We propose that a business should strive not only to be profitable but also to ensure the well-being of all its stakeholders and of members of its extended professional “family.” Pursuing a more compassionate and communitarian form of the often maligned economic system known as capitalism would stimulate increased favor and backing from stakeholders and community members and help organizations gain a cooperative advantage.

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References

1. D.R. Avery and E.N. Ruggs, “Confronting the Uncomfortable Reality of Workplace Discrimination,” MIT Sloan Management Review 62, no. 1 (fall 2020): 16-18.

2. M. Boesler and S.D. Singh, “Collateral Damage,” Bloomberg Businessweek, March 30, 2020, 30-32.

3. M.P. Mangaliso, “Building Competitive Advantage From Ubuntu: Management Lessons From South Africa,” Academy of Management Perspectives 15, no. 3 (August 2001): 23-33.

4. Mangaliso, “Building Competitive Advantage,” 23-33.

5. A. Gore and D. Blood, “Capitalism After the Coronavirus,” The Wall Street Journal, June 29, 2020, www.wsj.com.

6. J.E.K. Walker, “The History of Black Business in America: Capitalism, Race, Entrepreneurship” (New York: Twayne Publishers, 1998).

7. L.C. Prieto and S.T.A. Phipps, “African American Management History: Insights on Gaining a Cooperative Advantage” (Bingley, United Kingdom: Emerald Publishing, 2019).

8. L. MacLellan, “The History of Black Management Reveals an Overlooked Form of Capitalism,” Quartz, June 18, 2020, https://qz.com.

9. A.K. Bangura, “Ubuntugogy: An African Educational Paradigm That Transcends Pedagogy, Andrafogy, Ergonagy, and Heutagogy,” Journal of Third World Studies 22, no. 2 (September 2005): 13-54.

10. J.C. Tronto, “Moral Boundaries: A Political Argument for an Ethic of Care” (New York: Routledge, 1993).

11. T. Jan, J. McGregor, R. Merle, et al., “As Big Corporations Say ‘Black Lives Matter,’ Their Track Records Raise Skepticism,” The Washington Post, www.washingtonpost.com.

12. M. Hassan, A. Bin Nadeem, and A. Akhter, “Impact of Workplace Spirituality on Job Satisfaction: Mediating Effect of Trust,” Cogent Business & Management 3, no. 1 (2016): 1-15.

13. B. Groysberg and M. Slind, “Leadership Is a Conversation,” Harvard Business Review 90, no. 6 (June 2012): 76-84.

14. J.E. Innes and D.E. Booher, “Consensus Building and Complex Adaptive Systems: A Framework for Evaluating Collaborative Planning,” Journal of the American Planning Association 65, no. 4 (autumn 1999): 412-423.

15. Innes and Booher, “Consensus Building,” 412-423.

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