Overcoming Barriers to Employee Ownership
The literature on employee ownership documents many advantages of employee ownership. This is related to the strong identification of the employee with the company, which promotes motivation and cooperation, limits conflicts etc. and leads to higher productivity and competitiveness. However, employee owned firms make up only a small proportion in most countries. Why are employee owned firms not widespread if they have productivity advantages?
At least five main barriers are identified in the literature:
- Organization problem – if a special model is missing for organizing the employee ownership
- Start-up problem – it is difficult to organize a group of employees in the start-up stage
- Entry/exit problem of employee owners – it is difficult to ensure that the retiring employees give up and the new coming employees obtain ownership
- Capital problem – it is difficult to raise enough capital for upstart and further development
- Risk problem – employees are at risk of both losing their jobs and their owner-capital
In some countries, employee ownership is relatively more frequent, but there is variation in the prevalence of different types in terms of size, capital intensity and industry, and there are differences concerning how the barriers have been removed in different countries. How have the barriers been reduced in countries where employee ownership is most frequent?
We have already received preliminary drafts of articles answering this question for France, Italy, Spain, the UK and USA. In France, Italy and Spain, employee ownership has mainly been spread through different types of worker cooperatives. In the UK, employee ownership has, in recent years especially, been promoted through the Employee Ownership Trust model, and in the US through the ESOP model.
The country analyses include the most recent data of prevalence – the number of employee owned firms with focus on the types that especially have been widespread in each country. This analysis shows the link between specific legislation and institutional settings, and the development of certain types of employee ownership in certain periods. In most countries, support organizations like cooperative association have also played a key role.
The country analyses show how different institutional settings have reduced the five mentioned barriers.
Other countries with successful ways of reducing the barriers can also be included in the special issue. This includes recent initiatives to spread successful models like a recent legislative initiative in Canada on a variant of the British EOT.
List of topic areas
The special issue will include overviews over the prevalence and development of employee owned enterprises in the form of worker cooperatives in France, Italy and Spain and of the Employee Ownership Trust (EOT) in the UK and the Employee Stock Ownership Plan (ESOP) in the US.
Other countries with high prevalence of employee ownership may also be included.
It will include analyses of how the institutional settings and support organization have reduced the main five barriers for employee ownership:
The special issue will include comparisons of the different models of employee ownership used in different countries.
It may include recent developments in countries introducing new models, possibly inspired by successful models practiced in other countries.
Submissions can be made at the JPEO ScholarOne submissions portal and should follow the author guidelines detailed on the JPEO website. Authors should select (from the drop-down menu) the special issue title at the appropriate step in the submission process, i.e. in response to “Please select the issue you are submitting to”.
Submitted articles must not have been previously published, nor should they be under consideration for publication anywhere else, while under review for this journal.
The closing date for abstract submissions is 26th September 2022. Please send abstract submissions to Niels Mygind ([email protected]).
The deadline for full paper submissions via ScholarOne is 31st October 2022.
Copenhagen Business School
School of Management and Labor Relations, Rutgers University