Defining your organisational structure

In this section you will start to define the structure of your co-operatively-run business or organisation, and the roles required for it to operate successfully, including:

  • Governance and management structures
  • Organisational design
  • A template on organisational design and structures for you to complete

As this is still part of the feasibility stage, we do not go into the complexities of HR, or the various considerations of hierarchy here. There is more information on HR under growing your co-operative.

This short video gives you an overview of the HR basics you need to consider when starting a co-operative:

Governance and management

You will need to understand the difference between governance and management:

  • Governance is about setting policy and strategy 
  • Management is about making sure that the business is run according to policy

You will need to understand how both work and interact, specifically:

  • How will the work be organised?
  • How will day-to-day management decisions be taken?
  • How does that relate to the way big strategic decisions are made by your Members or Board?

A structure to fit your business

As a co-op is made up of at least three people, you will need some kind of organisational structure. 

There are certain functions that all businesses need to have, such as:

  • Governance and strategic planning
  • Financial management
  • Marketing
  • Human resource management
  • Operations

These will need to be carried out by individuals, teams or departments, depending on the size of your organisation. And you need to know how these individuals, teams or departments are dependent on each other, and will interact.

Organisational design

This short video gives an overview of recruiting people when starting a co-operative:

VIDEO: RECRUITING PEOPLE - COMING SOON

At this stage you don't need to draw up a detailed organisational chart for your business, but if you can, do. There are numerous templates available online to help you draw-up a structure.

Depending on your size and the nature of your business, you may have a hierarchical structure or not (see some examples of organisatonal structures) – either way, you need to ensure that the key tasks above are being managed effectively.

What is your organisational structure?

Using the Organisational structure template:

Work through the following key questions. The template includes other key considerations for your business at this point in the feasibility study.

  • Describe how these and other functions that are particular to your business model will be managed? E.g. Governance and strategic planning; Financial management; Marketing; Human resource management; Operations.
  • Can you describe the relationships between the main groups that make up the business? E.g. Members (including membership criteria); Associate members (with fewer rights and responsibilities than full members); Probationary members (on a pathway to full membership) or other categories of membership; Board; Managers; Workers.

Employee Buyouts

If you are considering a model that involves Employee Buyouts, read more information under Employee Buyouts

Examples of organisational structure

There are some broad descriptions of how co-operatives might organise themselves on a day-to-day basis:

Examples of organisational structure

Traditional “hierarchy”

Some co-operatives organise like traditional businesses with a manager or managers overseeing employees or – for larger co-operatives – departments with department heads. The fundamental difference from a traditional business is that the Board to whom the manager or department heads report is elected by and from the members. In some co-operatives the management or department head roles are filled by members who are elected to the role.
Self-managed teams Some larger co-operatives organise the business into different departments and then manage the work within those departments democratically as a team. There will usually be a co-ordinating body made up of representatives of each team to ensure the different departments all work to a common strategy. This co-ordinating body may be the Board or it may report to the Board.
Collective or “flat” structure Some co-operatives organise the whole business as a flat structure.  All the members of the co-op are involved in decisions, often holding short meetings to deal with operational issues that individuals haven't been given the authority to make decisions on.

The information and tools in this section have been developed by our colleagues at the Co-operative Assistance Network.

Updated: 26/03/2019