Document Type
Thesis
Date of Award
5-31-1987
Degree Name
Master of Science in Management - (M.S.)
Department
Organizational and Social Sciences
First Advisor
Anthony Kahng
Abstract
Employees Ownership in the United States has been in existence for many years and it seemed to be a utopian idea of no real consequence to the general public. Now employee ownership has gone a drastic change and it has become a major focus of media attention, and we are observing an extra ordinarily rapid increase in interest and involvement among practitioners in law, banking, and organizational consulting, along with growing government interest.
As the name indicates employees ownership or worker cooperative firms have a long but spotty history in the United States. Some researchers traced over eight hundred firms with some sort of worker ownership. These decades employee owned firms fared as well as privately owned firms, but they note that very few of them survived beyond two decades. In the early part of this century, 1920 through 1960, two types of employee ownership have attracted some interest at least among academicians. Plywood cooperatives of the Northwest Coast is one type of the workers cooperatives. Sometime there were as many as twenty-six of these worker cooperatives and eleven survive to this day. Some of these cooperatives have outperformed the average private firm in their field.
Another type of employees-ownership that came into existence was the situation when the plant owners through a favorable terms sell their stock to their employees, a typical example of plant closure which is sold under very favorable terms is American Cast Iron Pipe Company and it has continued to be highly profitable. The maintenance of employee ownership depended not on financial performance of the firm but on its ability to include new employees in ownership.
The sudden emergence of employee buyouts as means of saving jobs in case of impending plant shutdowns was another force of employee ownership. Some of these employee buyouts were assisted by Office of Industrial Training. Since 1979, over forty companies have been assisted, but some of them were however unsuccessful. The reasons for the lack of success was that most of the failing companies were entirely dependent on the auto industry, which was in a deep decline at the time, resulting in a loss of market.
Michigan and ten other states have specific legislation designed to encourage the concept of employee ownership, some of these states are New Jersey, California, Delaware, Ohio, Pennsylvania and West Virginia. Employee Ownership should not, however, be perceived as a panacea for a failing business. It should be pursued only when there is a reasonable outlook for business success as indicated by a positive feasibility analysis and other assurances, and with the solid support of both management and labor.
The objective of this thesis is to show various examples of employee ownership in United States and also to show the results, then compare the result with that of Britain.
The first chapter of this thesis will introduce the origin of Employee Ownership in the whole world and in the United States in particular. It will also name most of the employee owned companies or corporations in the U.S.A. e.g., Pittisburgh Coal Company, The United States Steel Corporation and many automobile and Airline Companies.
The second chapter will show the general policy involved in Employee Stock Ownership. It will reveal the problem the workers encounter on investment, the protection of workers, the profit of the company and above all general problems and dangers of employee stock ownership.
The third chapter will deal basically with the Employee Stock Ownership Plans (ESOP); the concept of Employee Stock Ownership Plan, it is like pension or profit sharing plans; the function of ESOP; the advantages and disadvantages of ESOP; Securities Loans of ESOP, the Fiduciary Rules of ESOP and the Techniques of Financing ESOP.
The fourth chapter will reveal the Bankruptcy Company taken over by the employee like the Continental Airlines. It will also show and attempt to limit plant closings and the problems they encountered.
The fifth chapter will bring out the Employee buyouts, the Employee Ownership in other U.S. states like Michigan, New Jersey. Then the employee ownership in the 1970's and the solution of employee ownership.
The sixth chapter deals with the methods of transition of Employee Ownership. The successful transition of Employee Ownership and finally it will deal with the comparision of United States and Britain.
The seventh chapter will summarize and criticize the Employee Stock Ownership in U.S.
Recommended Citation
Ibida, Anthony Chuks, "Empirical study on employee's ownership" (1987). Theses. 3116.
https://digitalcommons.njit.edu/theses/3116
