1. Introduction: 1.1 Economic systems 1.2 The control dimension 1.3 Looking for clues 1.4 A projected synthesis 1.5 The plan of the book 2. Normative perspectives: 2.1 Why care about workers' control? 2.2 Equality 2.3 Democracy 2.4 Property 2.5 Dignity 2.6 Community 2.7 The author shows his cards 3. Workers' control in action (I): 3.1 Surveying the terrain 3.2 The Plywood cooperatives 3.3 The Mondragon cooperatives 4. Workers' control in action (II): 4.1 The Lega cooperatives 4.2 Employee stock ownership plans 4.3 Codetermination 5. Conceptual foundations: 5.1 The theory of the firm 5.2 The nature of authority 5.3 The locus of control 5.4 Why firms cannot be owned 5.5 Asset ownership 5.6 Residual claims 6. Explanatory strategies: 6.1 The symmetry principle 6.2 The replication principle 6.3 Transaction costs 6.4 Optimal contracting 6.5 Adverse selection 6.6 Repeated games 6.7 Path dependence 6.8 Cultural explanations 6.9 The strategy to be pursued 7. A question of objectives: 7.1 What do labor-managed firms maximize? 7.2 The Illyrian firm 7.3 Membership markets and labor markets 7.4 Membership markets and stock markets 7.5 Imperfect membership markets 7.6 What does the evidence say? 7.7 Some lessons 8. Views from economic theory I: 8.1 Explaining the rarity of workers' control 8.2 Asset ownership: incentives and information 8.3 Asset ownership: bargaining and information 8.4 Can asset specificity explain the rarity of workers' control? 8.5 Work incentives without risk aversion 8.6 Work incentives with risk aversion 8.7 Can work incentives explain the rarity of workers' control? 9. Views from economic theory (II): 9.1 Capital constraints 9.2 Debt financing 9.3 Equity financing 9.4 Can capital constraints explain the rarity of workers' control? 9.5 Portfolio diversification 9.6 Can portfolio diversification explain the rarity of workers' control? 9.7 Collective choice 9.8 Can collective choice explain the rarity of workers' control? 10. Transitions and clusters: 10.1 Organizational demography 10.2 Formation rates 10.3 Worker takeovers 10.4 Degeneration 10.5 Investor takeovers 10.6 Survival rates 10.7 Business cycles 10.8 Clusters 11. Toward a synthesis: 11.1 The causal tapestry 11.2 Credible commitment toward labor 11.3 Credible commitment toward capital 11.4 The composition of control groups 11.5 The commodification of control rights 11.6 Intellectual history and current debates 11.7 Is workers' control a unitary phenomenon? 12. Getting there from here: 12.1 Practical considerations 12.2 A modest proposal 12.3 Reassuring shareholders 12.4 Governing firms 12.5 Trading jobs 12.6 Sample calculations 12.7 The long and winding road.

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Governing the Firm: Workers' Control in Theory and Practice

Predominantly in the USA, the business case for organizational democracy has recently emerged out of new wave management and is characterized by a communitarian challenge to the economic efficiency of hierarchical modes of organizational governance. It presents democratization as a pragmatic remedial device to counter the symptoms of employee alienation and ameliorate the organizational problems associated with destabilized capitalism. This paper outlines the origins and nature of the business case for organizational democracy through a comparison with new wave management; uncovers its underlying rationale in terms of an array of constitutive assumptions that justify and differentiate its prescriptions for the workplace; and considers the implications of using a business case to legitimate the democratization of work organizations. It concludes by outlining the paradoxes inherent in the business case and suggests that, rather than appropriating the business case’s functionalist teleology, it is at the int...

Whence Democracy? A Review and Critique of the Conceptual Dimensions and Implications of the Business Case for Organizational Democracy

According to Palazzo and Scherer, the changing role of business corporations in society requires that we take new measures to integrate these organizations into society-wide processes of democratic governance. We argue that their model of integration has a fundamental problem. Instead of treating business corporations as agents that must be held accountable to the democratic reasoning of affected parties, it treats corporations as agents who can hold others accountable. In our terminology, it treats business corporations as “supervising authorities” rather than “functionaries.” The result is that Palazzo and Scherer’s model does not actually address the democratic deficit that it is meant to solve. In order to fix the problem, we advocate removing business corporations from any policymaking role in political CSR and limiting participation to political NGOs and other groups that meet the standards we set out for a politically representative organization (PRO).

Accountable to Whom? Rethinking the Role of Corporations in Political CSR

In early writings, stakeholder theorists supported giving all stakeholders formal, binding control over the corporation, in particular, over its board of directors. In recent writings, however, they claim that stakeholder theory does not require changing the current structure of corporate governance and further claim to be “agnostic” about the value of doing so. This article’s purpose is to highlight this shift and to argue that it is a mistake. It argues that, for instrumental reasons, stakeholder theorists should support giving all stakeholders control over the corporation, in the form of control over its board. That is, stakeholder theorists should support stakeholder democracy over the status quo. A larger goal of this article is to steer the conversation about stakeholder theory toward questions of governance and control. Stakeholder theorists tend to sidestep these questions, but it is vital that they be addressed.

https://journals.sagepub.com/doi/pdf/10.1177/0007650312439296

The Connection Between Stakeholder Theory and Stakeholder Democracy: An Excavation and Defense

I consider two influential arguments for employee participation in firm decision making: what I call the “interest protection argument” and the “autonomy argument.” I argue that the case for granting participation rights to some other stakeholders, such as suppliers and community members, is at least as strong, according to the reasons given in these arguments, as the case for granting them to certain employees. I then consider how proponents of these arguments might modify their arguments, or views, in response to this conclusion.

Participation in the Workplace: Are Employees Special?

One of the most important and widely-held moral beliefs in the modern world is a
belief in the principle of equal liberty. According to this principle individuals should
have the maximum freedom that is compatible with an equal freedom for all other
individuals. Ever since the Enlightenment the principle of equal liberty has provided
a basic moral reference point against which the legitimacy of social and political
institutions has been judged. And it is, I think, indisputable that this continues to
be true today.

Robin Archer

Papers

The philosophical case for economic democracy