Employee Owned Businesses

Questions continually arise with respect to employeeowned businesses concerning the effects employeeownership on the operational and financial performance of such enterprises. Assumptions are often made in the affirmative with respect to such questions because it is thought that employees work harder when they are owners. These assumptions create a problem because definitive assessments concerning the assumptions are not available. This problem will be investigated in a proposed research study, the purpose of which will be to assess the effects of employee ownership on profitability and performance.

Employee ownership through stock option programs and through employee trusts is not a new phenomenon in the American economy. Similarly, employee participation in the fruits of superior business performance has been provided through a variety of profitsharing schemes over the past several decades.

During the economic recession of the early1980s, however, employees in hundreds of American companies were asked to relinquish benefits, wage levels, and working conditions gained through past years of collective bargaining. In many instances where employees refused to grant such concessions, plants and operations were closed. In some of those cases, as a means of preserving their jobs, the employees formed groups to purchase the plants and operations to b