Employee ownership and organizational slack-some thoughts toward a model

Abstract

Employee ownership of the firm may take a number of forms which can be classified as corporate models and cooperative models. Each of these major classifications has a number of subclassifications with unique features. The specific features of the different models of employee ownership permit varying degrees of employee control and, in turn, result from and elicit different degrees of employee commitment and diligence in performance. There are a number of reasons for employee assumption of ownership of the firm. These reasons are practical or ideological in nature and involve saving jobs, saving taxes and raising capital, improving individual and organizational performance, garnering public and government support, democratizing work and reforming capitalism. Each of these objectives of ownership can probably be achieved best under a specific form of ownership. Of course, there are usually several objectives involved simultaneously and they may be in conflict. Employee ownership can provide the superordinate goal for conflict resolution. The number of successful employee ownership ventures offers evidence that the people involved can reconcile their different objectives and design an organization that can garner the commitment and performance diligence needed for slack reduction and goal achievement. Some generalizations concerning characteristics of successful employee-owned firms have been noted but it is difficult to weigh them or to assign causal relationships for specific situations. A general model of employee ownership, commitment and slack has been developed from knowledge of successful models and from research in organizational behavior. It is hoped that the model will provide some useful insights and suggest future research directions. © 1987.