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What is Justice Based Management?
Justice-Based ManagementSM
(JBMSM) is a leadership
philosophy and management system that applies universal principles
of economic and social justice within business organizations.
It is an important operational aspect of the Just Third Way.
The ultimate purpose of JBMSM
is to create and sustain ownership cultures that enhance the
dignity and development of every member of the company, and
to economically empower each person as an owner and worker.
JBMSM promotes a company’s
long-term profitability within the global marketplace by enabling
all worker-owners to serve and provide higher value to the
customer. JBMSM connects
every worker’s self-interest to the bottom-line and long-term
success of the company.
The JBMSM process builds
upon a written articulation of the philosophy and principles
of the company’s leader (typically the CEO or chairman
of the board) and leadership core group, in terms of universal
principles and core values of the company. JBMSM
proceeds in stages to build a consensus upon these fundamental
shared values and vision of the company within each work area
of the company.
These articulated values provide the foundation for enhancing
the productiveness of workers and company profitability, and
include such structures as employee-monitored economic incentive
programs, participation and governance structures, two-way
communications and accountability systems, conflict management
systems and future planning and renewal programs.
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The ESOP and Justice-Based
ManagementSM
One of the main components of JBMSM
is the "empowerment ESOP ." While the employee stock
ownership plan (ESOP) was originally invented as a means for
providing working people with access to capital credit to
become owners of corporate equity, most ESOPs are set up as
just another employee benefit plan or tax gimmick, or as an
employee share accumulation plan (“ESAP”). Most
ESOPs today are not designed to treat worker-owners as first-class
shareholders. The “empowerment ESOP,” on the other
hand, is designed to encourage workers to assume the responsibilities
and risks, as well as the full rights, rewards and powers,
of co-ownership.
Furthermore, all academic and government studies to date
have concluded that ESOPs alone are not enough to affect individual
and corporate performance. Within a JBMSM
system, in combination with a regular gainsharing program
tied to bottom-line profits, and structured systems of participatory
management, the empowerment ESOP stimulates everyone in the
company to think and act like entrepreneurs and owners.
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Balancing
Moral Values and Material Value
Justice-Based ManagementSM offers
an ethical framework for succeeding in business. JBMSM
balances moral values (treating people with fairness and dignity)
with material value (increasing a company's productiveness
and profits while enriching all members of a productive enterprise).
JBM's three basic operating principles are:
1. Build the organization on shared ethical values—starting
with respect for the dignity and worth of each person (employee,
customer and supplier)—that promote the development and
empowerment of every member of the group.
2. Succeed in the marketplace by delivering maximum value
(higher quality at lower prices) to the customer.
3. Reward people commensurate with the value they contribute
to the company—as individuals and as a team.
Justice-Based ManagementSM is guided
by the concept of social justice, as articulated by the late
social philosopher William Ferree. Social justice involves
the structuring of social organizations or institutions (including
business corporations) to promote and develop the full potential
of every member.
JBM also embeds within an ownership culture the three principles
of economic justice defined by the late lawyer-economist Louis
Kelso and philosopher Mortimer Adler:
(1)
“participative justice,” or the right
to the means and opportunity to participate in the economic
process as an owner as well as a worker;
(2) “distributive
justice,” or the right to the full, market-determined
stream of income from one’s labor and capital contributions;
and
(3) “harmony”
(or social justice), or the right and responsibility of each
person to work in an organized way with others to correct
the “social order” or institution when the principles
of participative or distributive justice are being violated
or blocked.
Within JBMSM the principles of social
and economic justice provide a logical framework for defining
“fairness” and structuring the diffusion of power
within the corporation.
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Structuring
Ownership Participation
JBMSM is designed to systematize
and institutionalize shared rights, responsibilities, risks
and rewards within all company operational and governance
structures involving:
- Corporate values and vision
- Leadership development and succession
- Corporate governance and future planning
- Operations (policies and procedures) and hardship sharing
policies
- Communications and information sharing
- Training and education
- Pay and rewards
- Grievances and adjudication
A well-designed Justice-Based ManagementSM
system sharpens and crystallizes the leader's philosophy around
“universal” principles, providing a solid foundation
for a corporate culture that enables people to internalize
these guiding principles. JBMSM generates
organizational synergy by connecting each worker-owner to
the financial tools of ownership (i.e. ESOP and profit sharing),
participative management systems, and a defined share of power
in the governance of the organization. This in turn enables
people to make better decisions, discipline their own behavior,
and work together more effectively and cooperatively—because
it is truly in their self-interest to do so.
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ADDITIONAL SOURCES ON JUSTICE-BASED
MANAGEMENT(SM)
For more information on Justice-Based Management(SM)
and building an ownership culture, contact Equity Expansion
International, Inc. at P.O. Box 40711, Washington, D.C. 20016,
(Tel) 703-243-5155, (Fax) 703-243-5935, (Eml) info@eei-consultants.com,
(Web) http://www.eei-consultants.com.
Also see:
"Justice-Based Management: A Framework for Equity and
Efficiency in the Workplace" [pp. 189-210 in Curing World
Poverty: The New Role of Property. [Originally titled, "Justice-Based
Management: A Framework for Equity and Efficiency in the Workplace."]
Available for $15 plus $3.00 shipping and handling (in U.S.)
from the Center for Economic and Social Justice, P.O. Box
40711, Washington, D.C., (Tel) 703-243-5155, (Fax) 703-243-5935,
(Eml) thirdway@cesj.org,
(Web) http://www.cesj.org.
"Beyond Privatization: An Egyptian Model for Democratizing
Capital Credit for Workers" [pp. 247-258 in Curing World
Poverty: The New Role of Property ] See above.
Journey to an Ownership Culture: Insights from the ESOP Community,
ed. Dawn Kurland Brohawn, published by Scarecrow Press and
The ESOP Association, 1997. Available from CESJ, $35.00 plus
$3.00 shipping and handling (in U.S.).
"Theory O." Available from National Center for Employee
Ownership (NCEO), 1201 Martin Luther King Jr. Way, 2nd Fl.,
Oakland, California 94612-1217, (Tel) 510-272-9461, (Fax)
510-272-9510, (Eml) nceo@nceo.org;
(Web) http: //www.nceo.org).
Various publications of the Ohio Employee Ownership Center,
Dept. of Political Science, Kent State University, Kent, Ohio
44242, (Tel) 330-672-3028, (Fax) 330-672-4063, (Eml) oeoc@phoenix.kent.edu.
Various publications of the Beyster Institute (formerly the
Foundation for Enterprise Development), 2020 K Street, NW,
Suite 400, Washington, D.C. 20036, (Tel) 202-530-8920, (Fax)
202-530-5702, (Eml) dbinns@fed.org,
(Web) http://www.fed.org.
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