Employee Ownership and Shared Capitalism: New Directions in Research

[Excerpt] This book showcases the diverse state of cutting-edge academic work on shared capitalism. More specifically, this book attempts to illuminate a representative cross section of current research about shared capitalism, enliven academic debates about it, and embolden new research initiatives. The works in this volume do not provide a complete picture of the current state of employee ownership or research about it, but by showcasing a representative sample of work, they illuminate shared capitalism\u27s complexity as an organizational, psychological, sociological, and economic phenomenon that requires deep interdisciplinary understanding. Another goal of this volume is to demonstrate to broader groups of policy makers, shareholder activists, journalists, business intellectuals, economic and social justice activists, and citizens the ongoing relevance of shared capitalism and its potential for improving broader social and economic outcomes beyond employee well-being and firm productivity, such as promoting economic growth, innovation, and employment stability, as well as addressing the alarming growth in wealth inequality that has occurred in the last two decades. Although this book and its introduction focus primarily on employee ownership in the United States and, to a lesser extent, western Europe, it is important to note that shared capitalism can be found in all parts of the globe, from broad-based employee stock options in Korea, to the privatization of formerly state-owned industries in eastern Europe, to worker cooperatives in Argentina that were created in response to the financial crisis of the early 2000s. This diversity provides a rich set of experiences on which we can draw to assess the potential offered by shared capitalism and to inform policies to encourage it. This volume represents a modest step in that direction

THE EMERGENCE AND CONSEQUENCES OF STOCK-BASED COMPENSATION IN THE CONTEMPORARY FIRM: AN INSTITUTIONAL APPROACH TO THE ORGANIZATIONAL FOUNDATIONS OF INEQUALITY

This dissertation explores the ways in which institutional organizational theory can enhance our understanding of how organizational structures that shape social inequality emerge, diffuse, and persist over time. More specifically, in three distinct papers, I examine the institutionalization of stock-based compensation practices in the contemporary global economy and the implications of these practices for broader patterns of income and wealth inequality. The first paper connects recent theories of managerial power to neoinstitutional theory in order to examine changes to executive stock option practices in the wake of the recent corporate scandals. In the second paper, I analyze how broad-based stock option practices are transferring from the US to India as technology production becomes more global. Finally, the third paper focuses directly on the consequences of employee ownership by analyzing variation in patterns of access to, and wealth generated by, different types of broad-based stock compensation for different demographic groups. Taken together, the three papers constitute a general inquiry into the emergence of stock-based compensation in the global economy and the consequences for inequality, and reveal how institutional organizational theory can provide important and novel insights into the structuration of new forms of wealth accumulation and stratification within contemporary capitalism.Mario Einaudi Center for International Studies (Cornell University), Center for the Study of Economy and Society (Cornell University

Institutional Fields and Green IS: Understanding the Influence

Although institutional theory has demonstrated that social, political, and cultural pressures within organizational environments shape the diffusion of new practices, few studies have examined whether managers actually perceive different types of field-level pressures to be important and, if so, whether their perceptions are associated with practice adoption. This is particularly true in the context of institutional fields. In this paper, we use survey data from 425 managers to analyze their perceptions of broader field-level pressures relating to climate change, and the relationship between these perceptions and the adoption of green information systems (IS). Our preliminary results reveal that managerial perceptions of pressure from environmental activists are not significantly related to managerial commitment to adoption or to actual adoption, but that managerial perceptions of broader field-level pressures to address climate change are positively related to both. In addition, we find that activist pressures are positively related to field-level pressures, suggesting that activism is more influential as an indirect rather than a direct pressure on corporations in shaping the adoption of green IS

Employee resource groups in the workplace: their prevalence, composition, and concerns

Employee resource groups (ERGs) in the U.S. are voluntary employee-led groups that are created to act as a resource for both employees and the organization and to foster a more inclusive and diverse work environment. These originated with the Black Caucus group at Xerox and have since spread to encompass a wide range of groups representing diverse social identities (Scully, 2009). ERGs can serve as a form of intrafirm employee voice (Freeman & Rogers, 1999) for employees belonging to different demographics and life stages. Our 3 purposes in this paper are to investigate the prevalence, composition, and nature of ERGs, because they are a phenomenon of broad interest for research on inclusion and voice. Further study – and debate about ERG efficacy as a representation form – can proceed meaningfully once this empirical baseline is established. Future exploration of ERGs beyond the U.S., in both multinational and domestic organizations, will also widen the lens of collective voice mechanisms

Defending Organizational Legitimacy after Enron: The Symbolic Use of Stock Option Accounting

David Strang, Richard Swedberg, Michael LounsburyThis paper examines the forces driving the adoption of an accounting practice, stock option expensing (SOE), among the Fortune 500 in the wake of the recent corporate scandals. I argue that in the ensuing debates and challenges to the legitimacy of existing institutional frameworks governing corporate behavior, SOE became a symbol of normative legitimacy and a way for organizations to defend against threats to their own legitimacy. In analyzing the effects of different types of legitimacy threats, the results indicate that organizations in industries that were under intensive levels of investigation were more likely to adopt SOE, but that negative media scrutiny and shareholder activism did not influence SOE adoption. The results also suggest that as the Financial Accounting Standards Board threatened to require SOE, the significance of the practice as a symbol of normative legitimacy began to diminish. The findings broaden and deepen our understanding of how organizations engage in symbolic practice adoption to defend their legitimacy as well as the processes shaping the social construction of accounting practices. This paper also provides empirical support for recent theoretical claims regarding legitimacy defense and expands upon recent work that has made links between the impression management literature and neoinstitutional theory