Employee versus conventionally-owned and controlled firms: an experimental analysis

Norman Frohlich, John Godard, Joe A. Oppenheimer and Frederick A. Starke
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Norman Frohlich: The Faculty of Management, The University of Manitoba, Winnipeg, Canada, Postal: The Faculty of Management, The University of Manitoba, Winnipeg, Canada
John Godard: The Faculty of Management, The University of Manitoba, Winnipeg, Canada, Postal: The Faculty of Management, The University of Manitoba, Winnipeg, Canada
Joe A. Oppenheimer: Department of Government and Politics and Center for Collective Choice, University of Maryland, College Park, MD 20742, USA, Postal: Department of Government and Politics and Center for Collective Choice, University of Maryland, College Park, MD 20742, USA
Frederick A. Starke: The Faculty of Management, The University of Manitoba, Winnipeg, Canada, Postal: The Faculty of Management, The University of Manitoba, Winnipeg, Canada

Managerial and Decision Economics, 1998, vol. 19, issue 4-5, 311-326

Abstract: Full employee ownership, under which employees enjoy dominant ownership and control rights, is an innovation which alters the relationship between employees and the organization in which they work. Although it has been hypothesized to have a number of positive implications, it has suffered from poor diffusion and survival rates overall, and selection biases have limited the generalizability of field research. We have therefore attempted to develop experimental methods to test hypotheses about the effects of employee ownership on selected economic, social, and psychological outcomes. In our experiments, subjects in employee-owned firms exhibited higher productivity, perceived greater fairness in the pay they received and the method used to pay them, reported higher levels of involvement in their tasks, had more positive evaluations of their supervisors, and showed a greater propensity to interact with and provide assistance to their co-workers than did those in employee-owned firms. Four areas where further research is needed are identified; these will refine our understanding of employee ownership and the conditions under which it will operate as hypothesized. © 1998 John Wiley & Sons, Ltd.

Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:19:y:1998:i:4-5:p:311-326

DOI: 10.1002/(SICI)1099-1468(199806/08)19:4/5<311::AID-MDE893>3.0.CO;2-I

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