Models of enterprise
An enterprise model provides an outline of a form of enterprise, including its foundations, along with other essential systems and practices required to sustain them. A model of enterprise ought to set out the essential practices that support the implementation of the foundations of the organization, as well as identifying the most important systems required to implement the model. An enterprise model should explain the overall system and supply guidance to decision-makers throughout the enterprise. It’s essential to differentiate between a ‘business model’ and a ‘model of enterprise’. A business model may be defined as ‘the plan implemented by a business to generate revenue and make a profit from its operations’; On the other hand, a model of enterprise outlines a specific form of enterprise, laying down its foundation practices along with the full raft of other practices critical to the overall system.
The significance of the self-help enterprise model
Leaders of SHEs need to have a handle on the true character of their organizations and what it takes to make them work effectively. People need frameworks to help them better understand their organizations, an enterprise model offers such a framework. The model explains the underlying logic for both the design and operation of SHEs. It’s designed to ensure that SHEs achieve their purpose and continuously serve their members.
The model is particularly valuable when starting up a new self-help enterprise, but it’s equally essential during their day-to-day operation and invaluable when an enterprise is undergoing any significant change. Leaders of SHEs need to acquire a thorough appreciation of the model because it will help them to release the latent power of their membership, to get their people to work together cooperatively, and to reap the benefits of following the self-help economic system. It offers enterprises a set of practices that will generate the necessary pressure to perform and supplies a spur to both innovation and renewal.
People not conversant with the model often struggle to grasp the essentials, because many of their most critical practices may seem to fly-in-the-face of everything that they have previously learned about enterprises; even more so where their training and experience has been limited to commercial business. People may well become even more confused if they have previously only had experience of working in mutant SHEs.
An overview of the self-help enterprise model
The following are the main components of the model:
- Motivated by the desire to meet a shared need using self-help and mutual action
- The purpose of the enterprise is to secure a better deal – a better organization – a better future for members, forming a holistic purpose
- Function-focused – concentrated upon market intervention in the best interest of its members, which involves the formulation and the implementation of a workable market intervention strategy
- A set of dynamic and complete systems are necessary to secure the achievement of the enterprise’s purpose. These will include the systems of organization, association, economics, and management
- All systems are subject to regular review and revised to make them fully relevant to the current needs of members
To view or download a diagram showing the self-help enterprise model ‘Click here’