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In this paper, my claim is that employee ownership of industrial companies enables economic survival, democracy, and joint responsibility. My main focus is a case study of Ljuders Nickelsilfverfabrik and its change to employee ownership. In 1980, 36 of the 42 employees became owners. My research question is how have the economy and democracy in an employee-owned industrial company changed over the years? My main research method includes a 35-year in-depth longitudinal case study of Ljuders Nickelsilfverfabrik since its employee takeover. The empirical material includes documents, interviews, participant observations, and informal talks over the entire study period. My theory is based on the study by Connell Fanning and McCarthy (1983, 1986), who have compiled the critical literature on employee-owned companies and have asked why so few employee-owned companies exist in Western economies. They formulate six non-viability hypotheses for employee ownership, against which I present my empirical study and conclude that employee ownership is possible. From my case study in combination with the literature about organizational changes, I formulate a recipe for a successful employee takeover and collective entrepreneurship. The experience of Ljuders Nickelsilfverfabrik shows that a more complete business idea can subsequently unfold with the help of different people’s knowledge and experiences. Degeneration from democratic to more traditional ownership and control can be avoided by placing new people in leadership positions. The management must create legitimacy for a different organizational form for internal and external stakeholders.

One of the surprising developments in the privatization processes of post-socialist economies was the high incidence of employee ownership. However, the available evidence suggests that the number of employee-owned firms is declining quite rapidly. This paper approaches the decline by using data on individuals in Estonian employee-owned firms. The key idea is that employee ownership can be sustainable only if it is extended also to new, incoming employees.We analyze the determinants of ownership in employee-owned firms and find out that new employees are excluded from ownership. While this finding is consistent with the literature on “degeneration” of employee-owned firms, it is not consistent with earlier empirical research. We argue that in developed economies, there are many countervailing forces that prevent the decline, but these are not in operation in Estonia. The peculiarity of Estonian findings is explained by different motives of entry of employee ownership vs. advanced market economies. However, the findings from this study may carry over to other transition economies as well.

Following critiques of shareholder capitalism and calls for reform of the corporation, employee-owned firms have attracted public and government attention in the UK and elsewhere, based on the view that these alternative organizations serve a broader public purpose. However, despite attempts to broaden the measures for evaluating organizations and take seriously the social effects of business decisions, we lack a holistic framework for evaluating this public purpose that addresses aspirations like participation, democracy, equality, solidarity, and strong community relations alongside financial resilience and profitability. This study proposes that a solution can be found in Selznick’s concept of “moral community.” Selznick argued that community, conceived as a response to the perceived unravelling of the social fabric, plays a vital role in countering the excesses of capitalism. Using this as a yardstick to evaluate employee ownership (EO) in the UK, the author argues that the EO organizational field is indeed an embodiment of a moral community. It successfully infuses a broad range of social values into economic pursuits, nurtures an inclusive sense of the “common good,” and mitigates the alienation resulting from an increasingly marketized society. At the same time, the EO moral community does not reject capitalism as such, aspiring to connect with and reform existing political, financial, and legal structures as opposed to positioning its own institutions as an alternative to them. There are, therefore, limits to the challenge that the EO community levels against the current socioeconomic order.

This case explores the context in which decisions related to the composition of the board of directors are made at a company with a strong, participatory culture and strong values of accountability, responsibility, and community.

This case study seeks an in-depth understanding of a 100% ESOP company’s (Carris Reels, Inc.) values, culture, and processes related to broad-based employee participation in decision-making and governance of the company. Data were collected from formal and informal interviews and discussions with Carris Reels’ employees, observation, and company archival data, including newsletters, meeting minutes, and announcements.

Goals may be sufficiently different at highly participatory, majority employee-owned ESOP companies such that regulatory guidelines for board structure for public or privately held companies that are not employee-owned should be evaluated in the context of that company’s stakeholders.

A trend toward external members for boards of directors should be given careful consideration in the case of majority ESOP companies whose employee-owned and governed status is central to the company’s vision.

This case study provides an in-depth look at a company’s board of directors’ composition-related decision-making in the context of broad-based participatory processes and the desire to maintain a profitable and fully employee-owned and governed enterprise.

The purpose of this research was to investigate how Mid South Building Supply, a 100% employee-owned company, survived the Great Recession. Research has found that employee-owned companies are more likely to survive recessions than other companies. Why this happens was unclear. Thus, this research was conducted to learn why this might happen.

The case study approach was chosen to uncover the causes because this approach has played a significant role in uncovering organizational phenomena. Moreover, the industry was chosen because of the vulnerability of firms in it to recessionary forces.

Mid South uses practices that enhance both financial and psychological ownership. Prior research has suggested that both are important.

Case study research is limited because only a single frim is investigated. Thus, additional studies need to be performed to confirm the results.

Although this is a single case study, the practical implication is that enterprises that want to improve their probability of surviving should apply the findings of this study.

Firms that provide employment stability to employees are more likely to survive. In turn, research would suggest that this is associated with greater family and community stability.

Whereas prior studies have used across-industry data to find that employee-owned firms are more likely to survive recessions than others, what such firms do differently was unclear. A literature review failed to reveal a prior study that looked at the internal practices that may cause this to happen.

Research on employee ownership has focused on questions of productivity, profitability, and employee attitudes and behavior, while there has been little attention to the most basic measure of performance: survival of the company. This study uses data on all U.S. public companies as of 1988, following them through 2001 to examine how employee ownership is related to survival. Estimation using Weibull survival models shows that companies with employee ownership stakes of 5% or more were only 76% as likely as firms without employee ownership to disappear in this period, compared both to all other public companies and to a closely matched sample without employee ownership. While employee ownership is associated with higher productivity, the greater survival rate of these companies is not explained by higher productivity, financial strength, or compensation flexibility. Rather, the higher survival is linked to their greater employment stability, suggesting that employee ownership companies may provide greater employment security as part of an effort to build a more cooperative culture, which can increase employee commitment, training, and willingness to make adjustments when economic difficulties occur. These results indicate that employee ownership may have an important role to play in increasing job and income security, and decreasing levels of unemployment. Given the fundamental importance of these issues for economic well being, further research on the role of employee ownership would be especially valuable.

From a perspective of ‘critical performativity’, John Lewis is of special interest since it is celebrated as a successful organization and heralded as an alternative to more typical forms of capitalist enterprise.

Our analysis uses secondary empirical material (e.g. JLP documents in the public domain, histories of John Lewis and recent empirical research). Our assumption is that engagement and interrogation of existing empirical work can be at least as illuminating and challenging as undertaking new studies. In addition to generating fresh insights, stimulating reflection and fostering debate, our analysis is intended to contribute to an appreciation of how structures of ownership and governance are significant in enabling and constraining practices of organizing and managing.

The structures of ownership and governance at John Lewis, a major UK employee-owned retailer, have been commended by those who wish to recuperate capitalism and by those who seek to transform it.

JLP can be read as a ‘subversive intervention’ insofar as it denies absentee investors access to, and control of, its assets. Currently, however, even the critical performative potential of the Partnership model is impeded by its paternalist structures. Exclusion of Partners’ participation in the market for corporate control is reflected in, and compounded by, a weak form of ‘democratic’ governance, where managers are accountable to Partners but not controlled by them.

Our contention is that JLP’s ownership and governance structures offer a practical demonstration, albeit flawed, of how an alternative form of organization is sufficiently ‘efficient’ and durable to be able to ‘compete’ against joint-stock companies.

By examining the cooperative elements of the John Lewis structures of ownership and governance, we illuminate a number of issues faced in realizing the principles ascribed to employee-owned cooperatives – notably, with regard to ‘democratic member control’, ‘member economic participation’ and ‘autonomy and independence’.

This study uses data from a 90% employee owned ESOP and six comparable private firms in the same region to investigate the effects of employee ownership and participation on effort, shirking and horizontal monitoring. Participation turns out to be a strong determinant of effort and horizontal monitoring. It was found that, on average, employees who perceive their participation level to be higher will, on average, exert greater effort, have an incentive to horizontally monitor and engage in horizontal monitoring. It is also found that participation does not have to be coupled with employee ownership to elicit motivational effects. Firms without employee ownership may achieve efficiency gains from increasing workers' perception of their level of participation in the firm.

This chapter and case study examine how and which structured elements of an employee-owned business contribute to building the economic security and asset wealth of the lowest-wage and skilled employees of the firm. It paves the way for greater understanding about how intentionally structured workplaces can address wealth inequality and economic security through income and non-income opportunity systems.

The study draws upon qualitative interviews with four members of management, two plant managers, and 12 low-income employee-owners. Company documents and confidential employee data were provided for direct research analysis. Interviews took place at company locations, and covered employees from all shifts.

Employee ownership structures provide an important tool for advancing policy support and management practices to rebuild the wealth building benefits of work for low-income workers.

To ensure confidentiality, the study is anonymized and does not directly draw on the worker-owner interviews. This limits the opportunity to demonstrate the effect of structure on workforce; nonetheless, the empirical data tell an important story.

Expanding wealth inequality and economic precarity among low- and moderate-income workers has raised broad debates about how shifts in the structure of work, through new business, capital, and ownership structures, may be contributing to these social problems.

The employee benefits of employee ownership are not fully studied. This case contributes to understanding how employee ownership may reduce gender and racial wealth gaps, build family well-being, and become a model for structuring opportunity for those traditionally left out of the economic mainstream.

To examine how different types of ownership, including investor-owned, employee-owned, and mixed models, affect the dynamics of participatory practices in the workplace, and the broader social effects of these differences.

Brings together literature from democratic theory and empirical research in workplace participation and employee ownership. The first step is to articulate the range of democratic practices from nondemocratic to strongly democratic. The essay then discusses the different forms that participation can take and the threshold for what can be considered democratic participation. It then considers different models of ownership and the impact of ownership type on participatory practices.

It is found that investor-owned firms cannot be considered strongly democratic and that worker cooperatives are more likely to be strongly democratic and cannot fall below the threshold of weak democracy. However, strong democracy is not necessarily a feature of worker cooperatives.

Little work has been done to consider the way the type of ownership affects the kind or degree of democratic practices that may be present in an enterprise.