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Do employee-owned firms produce more positive employee behavioural outcomes? If not why not?

Research

Do employee-owned firms produce more positive employee behavioural outcomes? If not why not?

Abstract

One of the many rationales advanced as justifying employee-owned enterprises is the idea that workers in such enterprises will be more engaged and more productive. We examine new evidence that reveals a mixed picture.
Do employee-owned firms produce more positive employee behavioural
outcomes? If not why not?
Those are the questions that a recent paper published in the British Journal of
Industrial Relations (BJIR), tries to answer. We draw upon the results of a detailed
comparative study of behaviours in the two largest co-owned retailers in Europe
(Eroski in Spain and John Lewis in the UK). We were able to assess developments
over time and across economic cycles.
One of the many rationales advanced as justifying employee-owned enterprises is the
idea that workers in such enterprises will be more engaged and more productive. The
suggestion is that workers in these enterprises will think and behave differently: the
essential nature of that difference being that they can be expected to act more like
‘owners’: be more customer (and market) focused and willing to make sacrifices in
hard times in order to sustain the enterprise. They would be expected to expend
‘discretionary effort’. In managerial language, they might be expected to be more
willing than an employee in a conventional firm, to ‘go the extra mile’.
What did we find? We found the so-called ‘three-pronged hypothesis’ to be valid. This
refers to the need for employee ownership to be complemented with increased
employee participation in decision making and with supportive human resource
policies. But we also found a need for a fourth prong – that is, a form of leadership
which recognizes the potential inherent in co-ownership and which animates that
potential by continual supportive steps to make it real.
This finding sat alongside a mixed set of
outcomes with regard to measures of
productivity, absenteeism, employee
attitudes and employee turnover. Workers
in both firms demonstrated levels of
commitment which exceeded those in
other forms of employment. But, at the
same time, there were indicators of
complacency with some examples of
higher levels of sickness absence and
responses to satisfaction surveys which
revealed lower scores than expected.
Managers in both firms explained these results as stemming from higher expectations
held by co-owners.
So, to what extent do these firms offer encouragement that co-ownership might
provide a viable alternative to conventional firms? Co-ownership does not provide a
simple, direct read-across to high commitment and high reward. But, they do offer the
potential for shared knowledge, shared power and shared reward. To realize that
potential seems to require constant skillful effort.
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The full article is titled: “Do employee-owned firms produce more positive
employee behavioural outcomes? If not why not? A British-Spanish comparative
analysisby Imanol Basterretxea (Universidad del País Vasco UPV/EHU, Spain) and
John Storey (The Open University, UK). Published in the British Journal of Industrial
Relations, June 2017. Link: http://rdcu.be/tjf1
Article
Our goal is to participate in the debate on regional well‐being. To this end, we explore the relationship between prosperity and the cooperative movement at the regional level in Italy between 2010 and 2019. We summarize prosperity through an index originally proposed by Amartya Sen and we apply it to classify Italian regions. We then perform panel analyses showing that there is a positive and significant association between such an index and the cooperative presence. We detect that, and explain why, the cooperative movement contributes to the regional prosperity more through its employment than in terms of the added value it generates.
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