Measuring performance: differences between capitalist and labour‐owned enterprises

Abstract

Purpose

The purpose of this paper is to test whether performance differences between labour‐managed (LOFs) and mercantile (PCFs) firms are due to the measures used in the comparison, rather than to their distinct capital‐ownership configurations.

Design/methodology/approach

Tests for the equality of two means and two variances of a variety of performance measures were used to ascertain whether differences between LOFs and PCFs firms are due to the measures used in the comparison, rather than to their distinct capital‐ownership configurations

Findings

The indicators analyzed do not provide either type of organizational structure a definite superiority in either short‐economic performance or in short‐term profitability and the profitability indicators assign as good a chance of survival to LOFs as to PCFs of similar size, even if the analysis of their respective debt structures indicates some clear limitations on their growth prospects.

Practical implications

The paper stresses the importance of using proper measures of the performance of LOFs, to avoid a common practice of being short‐changed in their evaluation of their economic performance, profitability, return of labour and financial structure.

Originality/value

The study will be useful to the worker‐owners of the LOFs and to those evaluating their performance, such as lenders, regulators, other public officials and the like.

Citation

Melgarejo, Z., Arcelus, F.J. and Simon, K. (2007), "Measuring performance: differences between capitalist and labour‐owned enterprises", International Journal of Social Economics, Vol. 34 No. 7, pp. 485-501. https://doi.org/10.1108/03068290710760254