Shared Capitalism and Employee Ownership: The Scholarly Agenda
42 Pages Posted: 9 Apr 2010
Date Written: March 19, 2010
The ideas of employee ownership and various forms of profit sharing in corporations have been around for a long time. The shorthand proposition is: if employees feel valued, they create value. More precisely, if they are owners and if they are satisfied by their connection to and stake in a greater whole, then they may, in turn, boost productivity.
Employee ownership is gaining new attention in academia with the emergence of many new and young scholars in the field, partly as a result of fellowship programs to support them. Several current issues make now a good time to have a fresh scholarly discussion about employee ownership, to see what ideas it might hold for rethinking the governance structures of business. This discussion is neither a review of the research literature nor a verbatim summary of the symposium, but rather an overview of the main issues discussed there. Some broad implications for both future research and future policy are noted.
-The current state of pensions and investments in the financial markets is causing a wide range of people to reconsider how to accrue and hold onto assets that reflect their years of hard work.
While employee-owners also lost on the value of their investments during the recent economic collapse, how can employee ownership play a responsible role in retirement savings?
-Innovations in clean technology, biopharmaceuticals, and other emerging technologies represent a new paradigm of economic growth. New ventures in these areas will rely on talented employees contributing their effort in risky start-up enterprises.
To what extent can broad-based employee ownership create incentives for groups of innovators and supplement venture capital for new enterprises while supporting a more sustainable pipeline of innovations?
-The widening compensation gap between top executives and other workers is causing politicians, shareholders, and employees to reconsider who builds the assets of an organization and who should share in them.
How can employee ownership provide new models for corporate governance and wealth sharing?
These are just some of the forces and questions that made this symposium on employee ownership timely. Interestingly, three months after the symposium, in October of 2009, Elinor Ostrom won the Nobel Prize for Economics, for her work on the role of the commons in economic governance. She showed how collective ownership can be viable, despite skepticism from mainstream economic theorists that free-rider hazards will hamper it.
Altogether, this is a propitious time to take a critical look at the research issues and realities of employee ownership. A group of researchers from a range of disciplines, many having recently incorporated aspects of ownership into their research, has a series of studies on employee ownership well underway. Their work examines the varieties and extent of employee ownership; the conditions under which it will succeed or fail; the mechanisms by which it can generate value for individuals, teams, firms, communities, and society; and the implications for policy.
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