What is a GICBC? Some Frequently-Asked Questions - Answered
This document is dated 05.16.2010, and is Copyright ©2010 by Douglas Castle, with all rights reserved. It was first published in The National Networker Weekly Newsletter.
The prototypical example and test case of the validity and viability of the GICBC organizational concept is The TNNWC Group LLC (formerly The National Networker Companies), which is the world’s first organization to follow the GICBC blueprint. The TNNWC Group LLC is the world’s first GICBC. You may become a Member of The TNNWC Group, LLC without cost, by clicking on http://bit.ly/JoinTNNWC .
The Acronym
GICBC is an acronym for Global Interworked Cooperative Business Community™.
The Reasons for the Creation and Proliferation of the GICBC
The GICBC is a new form of socio-economic entity designed and proposed by Douglas Castle to serve as a preferred alternative to the traditional, inflexible and often counterproductive forms of organizational structure and entity types which have many inherent and potentially fatal flaws, especially given such pre-existing factors as governmental involvement, subsidies, conflicts of interest, organizational and political dynamics, and a rich historical tradition of rich versus poor, owners versus workers, and shareholders versus consumers. This is especially true in a mature economy where power is centered in a few critical institutions, and where the propensity for the insufficiencies or failure of any of these critical institutions can lead to economic or social catastrophe.
The traditional and extreme organizational structures (such as large, publicly-traded corporations or, on the opposite end of the spectrum, unincorporated sole proprietorships) tend to become either: 1) uncontrollable, colossal, non-entrepreneurial monopolies or 2) struggling, slow-motion failures, given time and Human Nature. In either case, there are hard-wired limitations and conflicts.
In the case of the monopoly or conglomerate, there are no incentives for innovation or initiative because 1) customers are a captive audience with a dependency on the services or products provided by these entities, and 2) the shareholders and senior management are at a systematic conflict of interest with the customers whom they are privileged to serve – lamentably, the customers are ultimately exploited for the benefit of the shareholders and well-compensated senior management – there are no competitive incentives to provide either better service or innovation. Service deteriorates, prices to customers continuously increase, and inefficiencies tend to be subsidized by rate hikes granted by government regulatory agencies.
Big subsidies, regulatory favor, and a captive consumer base are a certain recipe for exploitation, inefficiency and indolence… wastefulness and non-productivity are actually rewarded. Change and innovation yield to the protection of the status quo and to the sheltering and fattening of entrenched senior management. Inertia reigns over innovation and the entire economy and its citizenry stagnate. Recessions and depressions ensue.
Witness the sorry examples of: cable and telecommunications companies; big oil and power companies; large pharmaceutical concerns; financial institutions (such as banks which are deemed simply “too big to fail,” and who are propped up by their chartering governments at the ultimate expense of the taxpayers) investment banking houses with limitless credit facilities who tend to win while the marginal stock market investors and pension fund managers tend to be the greater fools, buying overpriced stock which is being dumped by the big Wall Street Houses and incurring catastrophic losses all the while; insurance companies which charge ever-increasing premiums for decreasing coverage and an ever-decreasing willingness to pay legitimate claims presented to them, and many governmental agencies and entities which tend to hire based upon politically-motivated quotas, and promote based upon seniority instead of upon creativity, industriousness, management skills, efficiency, innovation and measurable performance.
These companies become intertwined through lobbying strength, wealth and bargaining power with those very same government agencies which are counted upon by those consumers or taxpayers to protect and defend their interests. Indeed, these agencies were created to protect the dependent public from being bullied and victimized by these behemoths.
Simply stated, these large companies and entities either indirectly make the law or act in disregard of it, and they eventually profit at the expense of the customers and taxpayers. The scenario is one of slaves and their masters.
Left to itself, this type of economy, controlled by these types of entities (with their philosophies) plants and cultivates the seeds of unemployment, poverty, violent crime, indebtedness, currency devaluation, a lower standard of living, a poorer quality of life, defeatism and even rebellion – a smaller percentage of the population controls an ever-increasing percentage of the world’s wealth, while the major percentage of the population becomes poorer and increasingly despondent.
Now, let’s observe the small, entrepreneurial or emerging enterprise, going at it all alone…
Q: How can a fledgling entrepreneurial enterprise hope to flourish when it is faced with such barriers to entry as incredibly high start-up costs, ongoing and increasing compliance requirements, tremendous fixed operating costs, lack of access to adequate capital, managerial talent, contracts, quality services, resources, negotiating and lobbying strength and assistance from powerful friends-in-court?
A: Not very easily, and seldom successfully. The failure rate is daunting, and the experience can be very disillusioning. The likelihood of an entrepreneurial enterprise to emerge from the incubator or cocoon and to become a self-sustaining butterfly is very small.
And yet, the greatest sources of innovation, technology, productivity, jobs creation and prosperity have always come from this competitively disadvantaged but highly-motivated, ambitious, and inherently nonconformist sector of the population.
The Structure of the GICBC
The GICBC is not a particular legal form of entity and it does not require a charter or license authorized or granted by federal, state or provincial government, as in the case of a corporation, a limited liability company, a bank, a securities brokerage firm, insurance company, a political action committee or certain types of trusts.
The GICBC is a structured form of doing business – it is an arrangement which most closely resembles an Employee Stock Option Plan (sometimes referred to alternatively as an Employee Stock Ownership Plan) combined with a purchasing cooperative, and further combined
It provides an incentive-based, cooperatively and collaboratively integrated organization comprised of smaller emerging enterprises, each of which contributes its non-cash resources (services, products, expertise, contacts, and the like) and management and marketing efforts to the community in
exchange for an ownership stake in the community itself.
It is a synergistic pooling and sharing of resources in order to amass the power of a much, much larger enterprise. The members, to the greatest extent possible, utilize the services offered by the GICBC for the benefit of their own individual businesses (which produces revenue for the GICBC and its constituents)
The GICBC is like a multi-cellular organism, but wherein each of the “cells” (members, by analogy) remains an independent for-profit entity – in the essential capitalist tradition – but contributes to the well-being (the prosperity, by analogy) of the organism through its resource sharing. Each cell has access to each other cell’s unique capabilities, and to the capabilities of the entire multi-cellular organism.
The leverage potential is exponential. The greater the number of cells, the utility of each of the cells, and the interactive, mutually-enhancing “fit” between and among the cells, the more powerful the organism, and the greater the benefits to each constituent cell. The organism, assessed separately and apart from each of the emerging enterprises which participates as part of its body and operations, would rapidly become profitable and self-sustaining of its own accord – a viable, large business with diverse revenue sources and profits… a substantial portion of which would be passed through to each of the constituent cells as an ancillary, passive, annuitized income to supplement the income generated by each of the individualized cells through its own respective operations.
Target Objective
If the GICBC were to be incorporated, each shareholder would be a consumer (of the GICBC’s services), a contributing member of the aggregate workforce, a direct participant in voting and policy making (in true, unfettered democratic fashion) and derive a share of operating profits. The level or percentage of ownership of each stakeholder would vest with the significance of its contribution to the benefit of the GICBC and derivatively, to its owners. It is a meritocracy as well as a democracy.
The GICBC, in an incorporated form, is a self-contained, sovereign economy which can freely interact with other such economies or entities. It is self-governing, and provides not only current financial benefits, but future financial security to each emerging enterprise with the vision and wisdom to participate.
The most elegant aspect of this design is that the interests of the consumers, the workforce and the shareholders are aligned without conflict. Capitalism without conflict is indeed possible. There can be enormous prosperity during a long period of uninterrupted peace.
The GICBC can truly be the Next Entity. It can foster and nurture entrepreneurship while conducting its affairs amongst the entrenched corporate giants and governmental culture with the posture and power of a multi-national conglomerate.
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DOUGLAS CASTLE RANTS: What is a GICBC? Some Frequently-Asked Questions - Answered
