institute for co-operative studies prof. dr. markus mändle david hummel, msc. housing co-operatives...

INSTITUTE FOR CO-OPERATIVE STUDIESProf. Dr. Markus MändleDavid Hummel, MSc.

Housing Co-operatives and Digital Democracy

Housing Co-operatives and Digital Democracy –

Basic Aspects and Empirical Evidence

Professor Markus Mändle and David Hummel, MSc.Nuertingen-Geislingen University (HfWU)

European Real Estate Society 22nd Annual Conference 24-27 June 2015 - Istanbul, Turkey

1


Housing Co-operatives and Digital Democracy 2

Agenda

1. Introduction

2. Basic Principles

3. Empirical Study

4. Summary and Conclusions



What is a Housing Co-operative?

• A private housing company owned by its members• The co-op creates economic benefits for its

members (good housing quality, well priced, security, democratic participation, dividend)

• Scale: small or medium sized firms• About 1,900 housing co-ops with 2.8 m members

and 2.16 m dwelling units in Germany (2012)



Democratic Participation

• Democratic control by members (ICA co-op principle)• Co-op members have equal voting rights

(one member – one vote)• Forms of democratic member control

- Direct democracy (prevailing in former times) - Representative democracy (prevailing today)

• Danger: Erosion of “co-operative identity”



Digital Democracy

• An amendment and extension of traditional democratic structures that rises efficiency, plurality, participation and transparency (Meißelbach 2009)

• Social media offer various forms of participationprimarily via access-restricted portals (Heise 2014)

E-Information E-Consultation E-Petition E-Discourse E-Voting



There are chances, but also risks…

• Loss of legitimization and authority

• Technical security

• Incalculable cost increases

• Bias caused by minorities

• Wrong decisions due to time pressure (Eisel 2011)



Agenda

1. Introduction

2. Basic Principles

3. Empirical Study




Empirical Study

Research issue: Collection of information on the status quo of digital democracy in housing co-operatives and theco-op manager‘s attitude and evaluation

Methodology: Online questionnaire; Email distributedin summer 2014 via vbw (Association of Housing Corporations in Baden-Württemberg, Germany); handling time 5-10 minutes; anonymous evaluation Almost a comprehensive survey



Empirical Study

Structure of the questionnaire:1. General information about the co-op2. Status quo3. Perspectives and chances4. Conflicts and risks5. General assessment / open question

Response: 65 co-ops from a population of 176 co-opsresponded (37 % rate of return)



Findings regarding … the status quoIs your co-op already involved in social media?

Yes 15 23.8 % No 47 74.6 %

Not specified 1 1.6 %

Basis 63 100 %

If yes, what are the objectives of your activities?(Multiple answers possible)

Property marketing 12 Public relations 11 Member communication 11 Human resources marketing 2 Digital participation 3 Not specified 3 Basis 15

Note: Percentages rounded



Findings regarding … perspectives and chances

Future relevance ofinformation and transparency?

High importance 29 47.5 % 21 34.4 % 5 8.2 % 2 3.3 % Low importance 4 6.6 % Not specified 0 0.0 % Basis 61 100 %

Future relevance ofE-Consultation?






Future relevance ofE-Petition?


Future relevance ofE-Discourse?






Future relevance ofE-Voting?





Findings regarding … conflicts and risks

Decision-making competency of the membersregarding business processes in general?

High competence 1 1.6 % 0 0.0 % 10 16.4 % 15 24.6 % Low competence 34 55.8 % Not specified 1 1.6 % Basis 61 100 %

A strengthening of member participationdelegitimizes existing governance structures

I agree completely 5 8.1 % 17 27.4 % 8 12.9 % 8 12.9 % I disagree 16 25.8 % Not specified 8 12.9 % Basis 62 100 %




Findings regarding … conflicts and risksDanger of manipulation

Highly problematic 25 41.0 % 10 16.4 % 11 18.0 % 6 9.8 % Rarely problematic 5 8.2 % Not specified 4 6.6 % Basis 61 100 %

Anonymity Highly problematic 28 45.2 % 14 22.6 % 7 11.3 % 4 6.4 % Rarely problematic 4 6.4 % Not specified 5 8.1 % Basis 62 100 %

Time requirement Highly problematic 21 34.4 % 18 29.5 % 10 16.4 % 2 3.3 % Rarely problematic 7 11.5 % Not specified 3 4.9 % Basis 61 100 %

Fast reaction time Highly problematic 14 22.9 % 17 27.9 % 12 19.7 % 4 6.6 % Rarely problematic 8 13.1 % Not specified 6 9.8 % Basis 61 100 %




Findings regarding … the general assessment

All in all, do chances exceed risks?

Yes

15 25 %

No

30 50 %

Not specified

15 25 %

Basis

60 100 %



Agenda

1. Introduction

2. Basic Principles

3. Empirical Study




Summary and Conclusions

• Today, due to the needs of the market, representative democracy dominates member control.Consequently, an erosion of “co-operative identity” canbe found in many cases.

• An approach to solve this problem could be the strengthening of direct democracy via social media.Digital democracy creates new forms and possibilitiesof member participation.




• However, only few housing co-operatives are involved in social media so far. And co-ops engaging in social media usually pursue other objectives than digital participation(e.g. marketing, public relations).

• Regarding the forms of digital participation, co-opmanagers favor information and transparencyas a basis for non-digital decision-making. Obviously the manager’s skepticism rises as the forms of participation become more binding and authoritative (e.g. E-Vote).




• Most of the co-op managers doubt the member’s decision making competence regarding business processes. Consequently, they probably are skeptical regarding direct democracy per se.

• But the manager’s main problems with digital participation do not seem to be co-op specific. Main problems are rather seen in technological or data processing areas (e.g. therisk of manipulation, anonymity or organizational cost increases).




• All in all, without doubt, a skeptical perception of the co-op managers is prevailing today.

• But according to the eminent importance the managers see for information and transparency (and considering the large number of undecided votes in the general assessment) it can be suggested that the significance of social media and digital participation will rise considerably in the future. Most likely this will happen in a non binding form of participation.




• Latest this will be the case when a new generation of members with younger people’s needs and requirements appears.

• The result of this study is probably summarized best in the following answer of an interviewee given in the final open question regarding the general assessment:

“Social media will be important for us only in several years, when all members use the Internet or are able to use it.It’s simply a question of time.”



References

Eisel, Stephan: Internet und Demokratie, Freiburg im Breisgau 2011.

Heise, Christian: Elektronische Beteiligungsformen, E-Demokratie.org, Beiträge zu elektronischer Demokratie und elektronischer Partizipation, http://www.e-demokratie.org/elektronische-beteiligungsformen/ (18.06.2015).

Hummel, David: Social Media und Genossenschaftsdemokratie – Eine empirische Betrachtung aus Unternehmenssicht, Nürtingen-Geislingen 2014.

Meißelbach, Christoph: Web 2.0 – Demokratie 3.0? Demokratische Potenziale des Internets, Baden-Baden 2009.



Contact

Nuertingen-Geislingen University (HfWU)Institute for Co-operative Studies (IfK)Parkstr. 4D-73312 Geislingen/SteigeGERMANY

Prof. Dr. Markus Mä[email protected]

David Hummel, [email protected]

mailto:[email protected]

mailto:[email protected]

institute for co-operative studies prof. dr. markus mändle david hummel, msc. housing co-operatives...

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