The Corporation as a Syndicate

The model for the syndicate is the nineteenth-century farmers’ cooperative.

The approaches at GM and Toyota, however different, still take the traditional corporation as their point of departure. But there are also some new ideas that do away with the corporate model altogether.

One example is a “syndicate” being tested by several noncompeting manufacturers in the European Union. Each of the constituent companies is medium-sized, family-owned, and owner-managed. Each is a leader in a narrow, highly engineered product line. Each is heavily export-dependent. The individual companies intend to remain independent, and to continue to design their products separately. They will also continue to make them in their own plants for their main markets, and to sell them in these markets. But for other markets, and especially for emerging or less-developed countries, the syndicate will arrange for the making of the products, either in syndicate-owned plants producing for several of the members or by local contract manufacturers. The syndicate will handle the delivery of all members’ products, and service them in all markets. Each member will own a share of the syndicate, and the syndicate, in turn, will own a small share of each member’s capital. If this sounds familiar, it is because the model is the nineteenth-century farmers’ cooperative.

ACTION POINT: Decide whether your organization would benefit from being part of an existing or a new syndicate.

Managing in the Next Society

* Source: The Daily Drucker by Peter F. Drucker