A collective ownership enterprise is defined as a business organization in which a group of people combine their land, money, labour, and other resources to form a shared enterprise, usually a farm or a factory.
The collective ownership enterprise originated in the Soviet Union in the early 1920s and was adopted by many other countries in the communist block. It is a particular type of state ownership in which the means of production are owned in common by the working members of a cooperative or collective. These collective ownership enterprises became widespread in Europe during the 1960s and later spread across the developing world.
The benefits of collective ownership are widely recognized, primarily because it allows the contributors of capital and labour to share in the profits and decisions of the enterprise. This form of ownership also limits individual income potential, as the collective share of the profits is shared throughout the entire group, regardless of the individual participants level of contribution.
In addition to sharing profits, collective ownership also encourages a sense of unity among its participants by eliminating the competition between members and allowing them to benefit from their collective efforts. This unity can also result in a greater commitment to the mission and objectives of the enterprise, as members work together to develop the most efficient ways to produce goods and services.
Collective ownership also has some drawbacks. The most obvious one is that participants must agree unanimously on the goals and objectives of the enterprise. This can sometimes be difficult to achieve because it often involves compromising on certain financial and operational matters. Additionally, collective ownership can be a source of conflict between employees, who often have varying levels of commitment to the enterprise and who may view the enterprise in different ways.
Collective ownership is generally less costly to operate than other forms of ownership and is more efficient in terms of the use of resources. Additionally, the collective nature of the enterprise allows the members to have more control and input over the direction of the organization.
In summary, collective ownership offers significant advantages to its participants, from sharing the profits to developing a sense of unity and common purpose. However, there are some potential downsides to this form of ownership, including difficulty in achieving consensus, potential conflict between employees, and a lesser degree of control over the direction of the enterprise. Nevertheless, for many collective ownership enterprises, the advantages outweigh the potential drawbacks, leading to a successful and profitable enterprise.
