PurposeThe purpose of this paper is to give an updated overview over the development of employee-ownership in Italy, France, Spain including Mondragon, the UK and the US with relatively many ...employee-owned firms. How have the barriers for employee-ownership been overcome in these countries?Design/methodology/approachThe overview is based on updated descriptions of the development of employee-ownership included in this special issue. The analysis follows the structure of overcoming five barriers: the organization problem; the problem of entry and exit of employee-owners; the startup and takeover problem; the capital- and the risk problem.FindingsItaly, France and Spain have overcome the barriers by specific legislation for worker cooperatives, this includes rules for entry and exit of employee members. Cooperative support organizations play an important role for monitoring and managing the startup problem and for access to capital. The Mondragon model includes individual ownership elements and a group structure of cooperatives. The EOT and ESOP models are well suited for employee takeovers, financing are eased by tax advantages and they are all-employee schemes. While the EOT has no individual risks, the ESOP model has the possibility for capital gains for employees but also the risk of losing these gains.Originality/valueComprehensive and updated overview of the development in employee-ownership in the five countries to identify successful formats of employee-ownership for implementation in countries with few employee-owned firms.
Is there a link between how a firm manages its internal and external stakeholders? More specifically, are firms that give employees stock ownership and more say in running the enterprise more likely ...to engage with external stakeholders? This study seeks to answer these questions by elaborating on mechanisms that link employees to external stakeholders, such as the community, suppliers, and the environment. It tests these relationships using a sample of 347 private, mostly small-to-medium size firms, which completed a stakeholder impact assessment organized by the non-profit B Lab. The results support the hypotheses that both employee ownership and employee involvement are positively associated with external stakeholder engagement. Further, we found that certification plays a role, as employee ownership contributes to external stakeholder engagement only in certified B Corporations, and not in firms that merely completed the B Lab Impact assessment. Our findings have import for stakeholder engagement frameworks, as we show that there is interplay between internal employee stakeholders and external stakeholders that may be important to overall firm-stakeholder management.
This title is part of UC Press's Voices Revived program, which commemorates University of California Press's mission to seek out and cultivate the brightest minds and give them voice, reach, and ...impact. Drawing on a backlist dating to 1893, Voices Revived makes high-quality, peer-reviewed scholarship accessible once again using print-on-demand technology. This title was originally published in 1984.
Worker cooperatives as an entrepreneurial activity that values collective benefits have raised increasing interest in recent years. This prioritisation clearly distinguishes this business model from ...other entrepreneurial forms. Nevertheless, entrepreneurship research to date has rarely focused on worker cooperatives. This study draws on this gap by examining the main factors decisive for people preferring this business model. The results suggest five factors that can act as drivers for improving entrepreneurial creation through worker cooperatives and conforming to an entrepreneurship path aimed at improving social cohesion. These factors are related to several key points: cooperative principles and the governance model of these organisations; the perception of this model as especially suited for favouring equality; the individual’s social orientation; and the influence of external aids provided to the constitution of worker cooperatives. The findings also suggest the need for effective public policies that favour the cooperative model since it promotes a more responsive and sustainable economic growth.
The Citizen's Share Blasi, Joseph R; Freeman, Richard B; Kruse, Douglas L
11/2013
eBook
The idea of workers owning the businesses where they work is not new. In America's early years, Washington, Adams, Jefferson, and Madison believed that the best economic plan for the Republic was for ...citizens to have some ownership stake in the land, which was the main form of productive capital. This book traces the development of that share idea in American history and brings its message to today's economy, where business capital has replaced land as the source of wealth creation.
Based on a ten-year study of profit sharing and employee ownership at small and large corporations, this important and insightful work makes the case that the Founders' original vision of sharing ownership and profits offers a viable path toward restoring the middle class. Blasi, Freeman, and Kruse show that an ownership stake in a corporation inspires and increases worker loyalty, productivity, and innovation. Their book offers history-, economics-, and evidence-based policy ideas at their best.
PurposeThis study investigates whether broad-based employee ownership (BBEO), in isolation and in conjunction with cash profit sharing (CPS), can enhance labor productivity in family firms over ...nonfamily firms.Design/methodology/approachHypothesis testing was conducted using cross-sectional time-series regression with a matched sample of 393 family and nonfamily firms listed on the US S&P 500 over a five-year timeframe.FindingsOverall, the findings indicate that BBEO does not increase labor productivity more in family firms compared to nonfamily firms in the short term; however, BBEO does enable family firms to experience greater labor productivity relative to nonfamily firms beyond the short term. Moreover, when BBEO is combined with CPS, labor productivity improves more for family firms than nonfamily firms both in the short term and beyond.Originality/valueWhile prior studies have relied largely on agency theory, this study contributes to the literature on family firms and employee incentives by being amongst the first to draw upon temporal motivation theory to distinguish between family and nonfamily firms regarding the incentive effect of BBEO on labor productivity.
This study examines the impact of non-executive employee stock ownership plans (ESOP) on corporate environmental engagement. We show that granting ESOPs to non-executive employees promotes greater ...corporate ecological engagement from the perspectives of environmental protection expenditures, environmental information disclosure quality, and environmental, social, and governance (ESG) ratings. ESOPs unite members in a common interest, empowering them to put pressure on management to reduce carbon emissions, which benefits their physical wellbeing and increases their residual interest in long-term corporate wealth. Further, our analysis reveals that companies investing in environmental protection forgo short-term profit as a consequence of high initial costs, while increasing long-term firm value. These positive effects are attributable to ESOP schemes with higher employee subscription rates, those granted to a larger number of non-executive employees, and those with longer validity periods of ownership, whose incentive effect is sufficiently powerful to offset the free-rider problem. In addition, the impact of ESOPs is more pronounced in companies with greater media exposure, those confronting intense labor market competition, and those in heavily polluting industries. Fundamentally, our study provides novel evidence of the incentive effect of ESOPs on corporate environmental engagement and of stakeholder dynamics driving the implementation of carbon reduction strategies.
Psychological ownership has emerged as an important predictor of workplace motivations, attitudes, and behaviors. While components of psychological ownership theory have been recently adapted to ...marketing contexts as well, much remains to be done. With a more comprehensive application and use of psychological ownership theory in marketing, additional understanding and explanation could be provided for many of the key phenomena, such as customer satisfaction, loyalty, word-of-mouth, and willingness to pay. In this article, we focus on individual psychological ownership-associated concepts and evidence with implications for research in marketing. Our work offers multiple avenues for future research focused on, but not limited to, marketing contexts.
PurposeThe purpose of this paper is to compare three models of employee ownership and to identify pros and cons in relation to how the models can overcome the barriers. Which choices are important ...when defining the overall rules around the models and the specific possibilities for variations and combinations and what are the pros and cons for these choices?Design/methodology/approachThe comparison is based on the three main models of employee ownership identified from the country descriptions in this special issue.FindingsThe models do not exclude each other. The models can all be promoted in a specific country, leaving the choice of specific model to the stakeholders involved in the establishment of the employee-owned company. The article also shows the possibility of combining different models and in this way to adjust to specific preferences and conditions – e.g. whether employees and other stakeholders want collective or individual ownership and whether it concerns a start-up or a succession company.Originality/valueThis paper identified the key differences and similarities of different models for employee ownership including pros and cons of worker cooperative vs the Employee Ownership Trust (EOT) and the Employee Stock Ownership Plan (ESOP) models.
•Non-executive employee ownership positively impacts firm's labour investment efficiency in Europe.•Reduced information asymmetry is a potential channel for this impact.•Improved monitoring of ...management is another potential channel for this impact.•The paper contributes to the debate on the determinants of labour investment efficiency and to the literature on the effects of employee ownership on corporate outcomes.
This paper studies the impact of non-executive employee ownership on labour investment efficiency for a sample of European firms. It empirically documents a negative association between employee ownership and labour investment inefficiency, which serves an inverse measure of labour investment efficiency. This negative association is notably more pronounced for firms reporting higher discretionary accruals in their financial statements (i.e. firms with higher information asymmetry) and for those with a lower percentage of independent directors (i.e. firms with greater agency problems). As such, this paper offers evidence that employee shareholding enhances employment decisions through two channels: reduced information asymmetry and improved management monitoring.
