Evidence on Attitudes Toward Alternative Sharing Arrangements DANIEL EGAN, DOUGLAS J. HERRMANN, and DEREK C. JONES* Attitudes of undergraduates toward a range of alternative organizational forms are sumeyed. Results show that students prefer firms where employees have significant ownership and control. Our findings strongly support the hypothesis of a strong gender effect influencing undergraduates’ preferences for different types of firms. Results also indicate the importance of political orientation in influencing respondents’ preferences. INTEREST IN ALTERNATIVE WORKPLACE ARRANGEMENTS, long the province of industrial relations scholars (e.g., see Strauss, 1982; Tannenbaum, 1974; Whyte et al., 1983), is now more widespread. Weitzman’s (1984) controversial theories regarding profit sharing and stagflation have prompted policymakers as well as other economists to turn their attention to “sharing” arrangements (see Mitchell, 1987; Nuti, 1987), including forms that Weitzman’s work omits (see Vanek, 1975; Meade, 1986). In addition, internationally, there has been substantial growth in (forms of) the share economy. In the U.K., about 4 per cent of the adult population now own shares in the company in which they work (The Observer, January 18, 1987), compared to almost no such ownership a decade ago (Oakeshott, 1985). In the U.S. between 1981 and 1986, Employee Stock Ownership plans grew from about 5,300 plans (covering about 4,250,000 workers) to about 7,500 plans (covering over 7,000,000 workers) (GAO, 1986). Lastly, particularly in the U.S. and U.K., new legislation addressing sharing arrangements continues to be introduced. Eighteen states and the City of New York have * The authors’ affiliations are, respectively, Department of Sociology, Boston College; Department of Psychology, Hamilton College; and Department of Economics, Hamilton College. Many people assisted in the fieldwork on which this study is based. In particular, we wish to thank: Frank Anechiarico, James Bradfield, Michael Conte, Arnie Katz, and Ken Wagner. In addition, the paper has benefited from the comments of two anonymous referees. INDUSTRIAL RELATIONS, Vol. 28, No. 3 (Fall 1989). 0 1989 Regents of the University of California OO19/8676/89/10 1/4 1 I/$ 10.00 41 1
Transcript
Evidence on Attitudes Toward Alternative Sharing Arrangements
DANIEL EGAN, DOUGLAS J. HERRMANN, and DEREK C. JONES*
Attitudes of undergraduates toward a range of alternative organizational forms are sumeyed. Results show that students prefer firms where employees have significant ownership and control. Our findings strongly support the hypothesis of a strong gender effect influencing undergraduates’ preferences for different types of firms. Results also indicate the importance of political orientation in influencing respondents’ preferences.
INTEREST IN ALTERNATIVE WORKPLACE ARRANGEMENTS, long the province of industrial relations scholars (e.g., see Strauss, 1982; Tannenbaum, 1974; Whyte et al . , 1983), is now more widespread. Weitzman’s (1984) controversial theories regarding profit sharing and stagflation have prompted policymakers as well as other economists to turn their attention to “sharing” arrangements (see Mitchell, 1987; Nuti, 1987), including forms that Weitzman’s work omits (see Vanek, 1975; Meade, 1986). In addition, internationally, there has been substantial growth in (forms of) the share economy. In the U.K., about 4 per cent of the adult population now own shares in the company in which they work (The Observer, January 18, 1987), compared to almost no such ownership a decade ago (Oakeshott, 1985). In the U.S. between 1981 and 1986, Employee Stock Ownership plans grew from about 5,300 plans (covering about 4,250,000 workers) to about 7,500 plans (covering over 7,000,000 workers) (GAO, 1986). Lastly, particularly in the U.S. and U.K., new legislation addressing sharing arrangements continues to be introduced. Eighteen states and the City of New York have
* The authors’ affiliations are, respectively, Department of Sociology, Boston College; Department of Psychology, Hamilton College; and Department of Economics, Hamilton College. Many people assisted in the fieldwork on which this study is based. In particular, we wish to thank: Frank Anechiarico, James Bradfield, Michael Conte, Arnie Katz, and Ken Wagner. In addition, the paper has benefited from the comments of two anonymous referees.
INDUSTRIAL RELATIONS, Vol. 28, No. 3 (Fall 1989). 0 1989 Regents of the University of California OO19/8676/89/10 1/4 1 I/$ 10.00
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passed laws encouraging worker ownership. In Britain, an amendment to the Finance Act in 1979, various “privatization” measures, and the strong government backing for profit-related pay (in the April 1987 budget) and tax relief for employee-owned firms all have stimulated growth in the area.
A basic question raised by these developments is whether this level of interest on the part of academics, activists, and policymakers in alternative forms of work organization is shared by the general public. Past efforts to survey attitudes concerning sharing arrangements have been limited in important ways. Most surveys have concentrated on workers who were currently working in participatory firms, and questions typically have been restricted to a narrow range of alternative organizational forms (for the U.S., see Long, 1978; Kochan, Katz, and Mower, 1984; and Sockell, 1985; for the U.K., see Ursell, 1983).’ In this pilot study, we progress beyond earlier studies in two respects. We survey attitudes over a broad range of alternative organizational forms; and we formulate and test hypotheses that may explain the preferences expressed by the undergraduate college students to whom we administered the questionnaire. Our results show that students prefer firms where employees have significant ownership and control. Moreover, our findings indicate that political orientation and, especially, gender are important influences on the respondents’ preferences for different types of firms.
Research Design
During the fall of 1987, students at one Northeast college, one Middle Atlantic university, and one Southern university were invited to complete a questionnaire designed to gauge their preferences for working in seven types of firms characterized by different levels of worker ownership or participation (see Table l).’ We chose to survey undergraduate students partly because of resource constraints, but also because at this preliminary stage, they are a reasonable proxy for the general public. In addition, information on students’ attitudes is arguably of interest in and of itself, since the workplace of tomorrow conceivably will be much affected by the attitudes and expectations of today’s students.
I The widely cited poll by Peter Hart Research Associates (see Rifkin, 1977) is an exception. It did include questions covering alternative arrangements and the respondents were drawn from the general public. However, the definitions of various sharing arrangements were sometimes imprecise and there was no attempt at hypothesis testing.
We used two instruments; in the other, the ordering of alternative organizational firms is the reverse of that shown in Table 1.
Research Note I 413
TABLE 1 DEFINITIONS OF ALTERNATIVE SHARING ARRANGEMENTS~
Firm A. Entirely owned by workers (both M and NM).
Firm B. Entirely owned by NM workers.
Firm C. Entirely owned by M workers.
All decisions made by workers (both M and NM) or their elected representatives.
All decisions made by NM workers or their elected representatives.
All decisions made by M workers or their elected representatives.
Decision making shared equally by workers (both M and NM) or their elected representatives and other people (stockholders) or their elected representatives.
Firm D. Owned equally by workers (both M and NM) and other people (stockholders).
Firm E. Majority ownership by other people (stockholders) with minority ownership by workers (both M and NM).
Decision making lies with stockholders or their representatives but workers (both M and NM) are allowed some say in the running of the enterprise.
Firm F. Entirely owned by other people (stockholders). Decision making lies with stockholders or their representatives, but workers (both M and NM) are allowed some say in the running of the enterprise.
Decision making lies with stockholders or their representatives and no workers have any say in the running of the enterprise.
Firm G. Entirely owned by other people (stockholders).
A M = managerial position; N M = nonmanagerial position. Source: The job Contingency Questionnaire, Herrmann and Jones (1987)
The respondents were all undergraduates, were all enrolled at either a liberal arts college, a major private university, or a major state university, and were all enrolled in social science courses. Most of these courses were entry level classes with high enrollments (e.g., Introductory Economics, Introductory Psychology). Instructors invited students to complete the instrument at the end of a class. Response rates averaged more than 95 per cent (for those in class that day); the sample totaled 277 respondents. On average, the respondents had completed about two years of college and thus were generally better educated than the average person in the 18-24 year old age bracket. In other respects, the sample is fairly broadly distributed- geographically, socio-economically , and by age within the 18-24 years interval.
Evaluation of alternative sharing arrangements was based on a seven-point scale, ranging from “dislike greatly” (1) to “like greatly” (7). Before they were asked to express their preferences, the respondents were told that all other firm characteristics, such as salary, working conditions, and size of the firm, were identical. Also, respondents were asked to make the following assumptions in evaluating the firms: (a) workers’ positions are limited to
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two broad types, managerial (M) or nonmanagerial (NM); (b) respondents have managerial positions; and (c) neither type of worker is represented by a labor union. Additionally, subjects indicated whether their political orientation was either liberal, moderate, or conservative.
Hypotheses
We use this sample to ascertain attitudes toward alternative sharing arrangements and to test two hypotheses. The first is that respondents who identify their political orientation as “liberal” will express stronger preferences for firms at the upper end of the worker ownership/participation continuum compared to “conservative” respondents. This hypothesis is based on the presumed greater willingness of liberals to accept more democratic ideas and institutions. The second hypothesis is that women will express stronger preferences for firms at the upper end of the continuum than will men. This hypothesis is derived from recognition of the historically subordinate role of women within most organizations (see Colwill, 1987). This, in turn, leads us to conjecture that women will be more receptive to alternative organizational forms than will men. We also examine hypotheses about the interaction between political orientation and gender with attitudes toward workplace arrangements. We do so in order to insure that the relationship between each independent variable (political orientation or gender) and preferences for workplace arrangements does not reflect the hidden influence of the other independent variable.
Results
As the data in Table 2 demonstrate, the most preferred forms of alternative sharing arrangements are those in which there is substantial ownership and control by both managerial and nonmanagerial workers (types A and D), followed by that form in which ownership and decision-making power are vested only in managerial workers (type C). The table also shows that forms in which ownership and control rests largely with individuals who are not employees in the firm (types F and G) are always the least preferred form of organization. Interestingly, not all respondents are favorably inclined toward working in a firm which is entirely owned and controlled by nonmanagerial workers (type B).
As is conventional in most investigations of attitudes (e.g., see Wrightsman and Deaux, 198l), we evaluate the data using analysis of variance. When the full sample is analyzed, both of our hypotheses are strongly supported. The two-way interaction between political orientation and type of firm is
Research Note I 415
TABLE 2 POLITICAL ORIENTATION AND PREFERRED ORGANIZATIONAL FORM
Political Orientation Preferred form" N Likeh
Liberal Liberal Liberal Liberal Liberal Liberal Liberal Moderate Moderate Moderate Moderate Moderate Moderate Moderate Conservative Conservative Conservative Conservative Conservative Conservative Conservative
A See Table 1 for definitions of organizational forms Like = mean preferences.
statistically significant at the .001 level (F=5.86). Tables 2 and 3 reveal that the differences in mean preferences (Like) are in the hypothesized directions; that is, liberals and women express stronger preferences for firms with greater degrees of worker ownership/participation than do conservatives and men. The fact that the three-way interaction among political orientation, gender, and type of firm is not statistically significant (F=.50, p=.92) indicates that the effects of gender and political orientation on preferences for particular firms are not i n t e r t ~ i n e d . ~
These results, however, may not be reliable. Since they are derived from the full sample, they may be unbalanced in terms of the political orientation and gender variables. In fact, 20 per cent of the respondents are liberal; 55 per cent are moderate; and 25 per cent are conservative. Thirty-nine per cent of the respondents are female and 61 per cent are male. To reduce the
The lack of statistical significance in the political orientation-gender interaction term indicates that the data do not support a general "gender gap" hypothesis.
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TABLE 3 GENDER AND PREFERRED ORGANIZATIONAL FORM"
Preferred Form Gender N Likeh
A F 107 5.5 A M 171 4.7 B F 107 2.9 B M 170 2.8 C F 107 4.7 C M 170 4.7 D F 107 5.4 D M 170 5.2 E F 107 4.0 E M 169 4.5 F F 107 3.3 F M 170 3.7 G F 107 1.7 G M 169 2.2
* See Table 1 for definitions of preferred organizational forms. Like = mean preferences.
possibility of bias in our results, we performed two additional analyses of two nonskewed subsamples. The first (N= 120) was randomly selected with the restriction that the three political orientation categories are equally represented (gender was not included here as an independent variable). Using this balanced (i.e. , nonskewed) subsample, the hypothesized political orientation effect remains strongly statistically significant (F= 1.93; p= .03). Also, the differences between means of preferences are in the expected direction.' This suggests that our full sample was substantively balanced in terms of the political orientation variable and therefore strengthens the full-sample results.
The second subsample (N=96) was randomly selected so that both the three categories of political orientation and the two categories of gender are equally represented. Analysis of this balanced subsample shows a statistically significant interaction between gender and type of firm (F=4.4; p= .0002); and with the exception of firm B, the differences in mean preferences are in the expected direction. Thus, the second subsample results reinforce the full-sample findings regarding the gender-effect hypothesis. Although the political orientation type of firm interaction term is not statistically significant (F=1.37; p=.18), the pattern of the means is similar to that in the full sample and in the subsample balanced for political orientation. Our full
.I These and other unreported tables are available from the authors upon request.
Research Note I 417
sample thus is balanced for a model in which political orientation is the only independent variable, but it is skewed for a model in which both political orientation and gender are included as independent variables.
Discussion
The preliminary findings presented here indicate very favorable attitudes toward organizational forms in which employees have significant decision- making power and ownership in the firm. Such alternative sharing arrangements differ markedly from conventional organizations-firms in which ownership and decision-making power lie mainly with people other than employees. Our findings also strongly support the hypothesis of a strong gender effect influencing undergraduates’ preferences for different types of firms. This effect is found in both the full sample and in the balanced subsample. The data offer less convincing, though still strong support for a political orientation effect.
To check the general validity of our results, in future work we would need a sample of individuals other than students. Extending the survey to include a still-greater range of alternative organizational forms-perhaps adding profit sharing-might be useful. Even at this stage, however, our results suggest that there is potentially broad support among the population for legislative measures designed to foster the growth of alternative sharing arrangements in which employees have significant decision-making power and ownership in their firms. Also, our results reflect the need to examine factors such as gender in studies focusing on alternative organizational forms.6 A broad study of the general population which discovers a gender effect, a political orientation effect, and other salient personal characteristics (such as race) would have major implications for the allocation of resources for supporting worker ownership or worker participation arrangements.
REFERENCES Colwill, Nina L. “Men and Women in Organizations: Roles and Status, Stereotypes and
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General Accounting Office (GAO). Benefits and Costs of ESOP T a x Incentives for Broadening Stock Ownership. Washington, DC: December, 1986, PEMD-87-8.
To test for an order effect (e.g., that firm A would elicit stronger preferences when presented first than when presented last), a variable indicating forward or reverse ordering is included in the model. Our conclusions are unaffected by the order of presentation.
With the exception of Granrose and Hochner’s (1985) study, which finds no difference in interest in worker ownership among male and female workers affected by a shutdown in the Philadelphia area, very little research has been done to determine the impact of gender.
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Granrose, Cherlyn S. and Arthur Hochner. “Are Women Interested in Saving Their Jobs Through Employee-Ownership?”, Economic and Industrial Democracy, VI (August, 1985), 299-324.
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