There's any number of ways to organize. Just as a rough, off the top of my head framework, you'd probably work the first few years as a contractor until every worker-shareholder voted to approve your application to join. Contractors won't be abused, because they'll go somewhere else they can join, or start their own co-op.
You would also have performance reviews and management just as in any other enterprise. You can get fired even as a worker-owner. Everything would be democratic and transparent, if you're not doing your job it'll show and you may get voted out. Yes there would be better job security than the dominant capitalist business model, which is a good thing. I'm assuming that would mean you'd be repaid for the value of your share upon your exit.
What this would do is attract the best employees to begin with. Between Accenture and a co-op where I get an ownership share and vote, and equal share of profits, I know which I'd prefer.
The great trick that is played by the current capitalist model is that there's a few great enterprises like Apple, Google, Microsoft and Facebook that pay well and treat people as good as if they had a union bargaining team. That doesn't exist for anyone else. These few dominant standouts build the reputation for other businesses that are a shadow of them.
It would certainly cut the fat out of inefficient models that include more middle management trying to justify their jobs and directors doing doing the same.
As far as growth, my view on that has always been that the size of companies that exist today are monstrosities. Many are propped up with government subsidies, defense contracts and such. Core government functions should be nationalized anyway, due to conflict of interest. The obvious one being folks who build bombs doing whatever it takes to encourage more wars and arms sales. That one is the most serious because it's not just waste, it's peoples lives being lost. Government has no such profit incentive conflict. There should be no such thing as perpetual contracts with the government. If it's a one-off and no co-op can meet the demand, there's options to scale quickly with contractors, and even in that case the co-op cares more about ensuring quality results than the capitalist enterprise. But you raise an important point, I'm suspicious of these mega-corps and their ties to government. I can't imagine a 10-person co-op bumbling healthcare.gov as Accenture did. In fact, I'm pretty sure with 10 hand-picked technologists, my cooperative could have outperformed Accenture's healthcare.gov job by a wide margin.
That is really a prime example of capitalism's inherent inefficiencies. Get the contract, possibly through favorable previous Accenture/gov't deals, and who cares about the result. For the people that work there, it's not their business, it's Wall Streets.
Accenture doesn't have to worry about their reputation after all, they're too big to fail. Where have we heard that before? We shouldn't encourage and participate in a system that enforces such mediocrity out of humanity. I'm one who expects excellence out of myself and those around me, and I can't see our current mode of production as encouraging that out of the majority.
I'm not sure in a capitalist enterprise's efforts to dominate that they'd be able to bring in the best people when candidates can be essentially on the board of directors somewhere else either.
Basically I believe that your point about competitors attempting to dominate an industry will be very difficult with widespread co-ops. Not without gov't collusion (or similar tactics). Employees at capitalist enterprises will be even more demotivated than they are today, knowing they're stuck as non-owners and without an equal payout of quarterly profits as their cooperative competitors enjoy. I can't see capitalism as a mode of production holding up very well once the idea spreads and is demonstrated more.
In sum, all organizations are only as good as the people within them, no matter the ownership model used. Capitalist business fails today just as cooperatives will in the future. Most people, myself included really only want a fair shake for our hard work, and stability for the community we live in. That's what it provides. It's still work, and hard work at that. It's not utopia, it's just fair. It's probably more work than just working for someone else as an employee, but it's less work than starting your own company if you join an existing co-op, and you don't have to spend your time trying to trick people into working hard (or unpaid overtime) and not receiving 100% payment for that 100% effort.