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Open Systems: Applying Diverse Employee Ownership Theories to Address Today’s Complex Challenges 

by: Foundation for Enterprise Development
Source: The Foundation for Enterprise Development 

The ideas of employee ownership and various forms of profit sharing in corporations have been around for a long time. The shorthand proposition under study is this: If employees observe that they have a meaningful stake in the fortunes of the enterprise, they create value. More specifically, if they have a financial and emotional stake in the performance of the venture, then as individuals and as a workplace community they will raise the level of their performance and productivity.

Employee ownership is gaining new attention in academia with the emergence of many new scholars in the field. This attention may be timely, as the world grapples with economic difficulties that may represent more than just another trip around the usual business cycle. The challenges that currently face the American economy—and all developed economies in today's global economic environment—make this an important time to explore the full potential of employee ownership throughout the business sector (including broad-based ownership by employees in publicly traded companies) and especially to see what possibilities it might hold as a means of forging societies that are at once efficient, productive, and just.

Our economy is struggling to find not merely the path that will lead it up from the bottom of the latest business cycle, but a new way forward to restore widespread prosperity that is broadly shared in an economic environment that features an unprecedented level of global competition. Improving conditions requires an understanding of complex systems and a thoughtful analysis of the influence of the interactions of many factors. Ownership is one of the key factors. And, as the work presented at the symposium makes clear, needed innovation is not limited merely to innovation in products or production—not constrained only to better information technology or bio-technology—but expanded to innovation in ownership, organizational design, governance, and capital formation. The search for solutions raises complex, interrelated questions concerning the role of employees both in their companies (issues of motivation, participation, innovation, and productivity) and in the economy (issues of personal access to capital, opportunities for wealth and income generation, and a shared stake in prosperity).

What, then, will emerge as the new means for accumulating and supplying capital, for organizing and managing people in business enterprises, and for sharing the resulting wealth and income in ways that meet societal needs?