Theory O-Is the Case Closed?
Abstract
Using survey data from employee ownership firms, the author examines employees' perceptions of being employee-owners. It appears that the employees do not really consider themselves to be employee-owners, and they do not see their status in the hierarchy change. These findings are implicitly distinct from recent research on employee stock ownership plans (ESOPs). ESOP researchers have debated whether employee ownership combined with participatory decision-making is an important explanatory variable for the comparative performance variance. Moreover, a new theory 0, beyond McGregor's and Ouchi's theory Y and Z has recently been introduced by Corey Rosen and Karen Young, stressing this complementary effect. The author elaborates further on the theory and defines the 0-type firm as an organization characterized by non-discriminatory inclusion in ownership and decision-making. Operationalizing this by distributional analysis may enhance the precision of empirical research on particular performance effects due to an 0-type management philosophy.
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This article was presented at the international conference 'Theoretical Approaches Towards Democracy in Organizations' organized by the International Sociological Association's Research Council 10 in Magleas, Denmark, June 1996, and the ninth international conference 'Economics of Participation' organized by the International Association for the Economics of Participation in Bristol, June 1998. A thank you to colleagues at the conferences for their comments on an earlier draft. The empirical results reported on employee-owners' perceptions are a result of a preliminary project, carried out in the spring of 1994 in cooperation with the Washington State Department of Community, Trade and Development. I am indebted to Peter Kardas and Jim Keogh for inviting me as a visiting researcher to the department for three months. The Danish Social Scientific Research Council and the Fulbright Commission are gratefully acknowledged for financial support to the project. Parts of the questionnaire used to analyse employee-owners' perceptions of their ESOP were the same as used by Corey Rosen, Katherine Klein and Karen Young in their 1986 study Employee Ownership in America. The Equity Solution.
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Article first published: May 1999
Issue published: May 1999
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