Participatory legal forms for public enterprises. How a group of affiliated public service organisations can help to overcome legal and institutional obstacles

PurposeIn some political and economic situations, it may be desirable to have a company that operates with a legal structure that is midway between the two extreme poles of the private sector (i.e. privatisation) and the public sector (i.e. nationalisation). In such situations none of the existing legal forms for private or public enterprises creates the institutional conditions necessary for a profitable, collectively owned enterprise. A possible solution to this problem is the participatory legal form of a group of affiliated public service organisations.Design/methodology/approachTaking a case study on the crisis-beset Berlin Brandenburg Airport Company (BER) as an example, the author examines how the proposed alternative legal form for collective enterprises could have improved the legal and institutional framework of the airport company.FindingsThe problems that arose with Berlin Brandenburg airport had multiple causes. Had the airport company adopted the legal form of a group of affiliated public service enterprises, it might have been better able to deal with many of its problems because the organisational structure would have been more suitable. The case study demonstrates that the improved governance framework offered by a group of affiliated public service enterprises could have reduced the likelihood of the large scale, spectacular failure of the project that occurred.Originality/valueA company that operates as collectively owned property is midway between the two extreme poles of private property and state property. In political and economic situations where such a solution is sought the question arises as to which legal or corporate form will provide the best conditions for successful management. The current lack of suitable available legal forms may be a factor in preventing the number of companies in collective ownership from increasing. The article points towards this gap and introduces the legal form of a group of affiliated public service enterprises, i.e. a collectively owned state consortium of social community interest enterprises.