Description on EOB

1. Worker Owned Companies

3. Introduction
Organisation Features
Pros and Cons
Where it works
AGENDA

4.  Employee ownership is where most or all
employees at a business, including those who are
not managers or executives, have an ownership
stake in the company.
 At employee-owned companies, employees have
an additional benefit, equity or profit sharing,
which allows them to share in the wealth and
assets that their work is helping to create.
Definition

5. EOB
Democratic
Participatory
OWNERSHIP
Direct Share
Ownership
Indirect Trust
Ownership
Hybrid
Ownership

6. Individual Share Ownership
• Capital growth important
• Low staff turnover
• Smaller employee numbers
• Employees likely to consider
personal share ownership more real
than trust ownership
• Low attrition rate
• Make it more attractive and
affordable
Ownership Types
Indirect (trust) ownership
•Larger employee numbers
•Long term investment/ownership is
important
•Desire to prevent (or make difficult) a
takeover
•Employees may have difficulty funding
share acquisition
•Limited funds to buy back employees’
shares
•If bonuses/performance based rewards
are important, the company is happy
for these to be cash-based rather than
involving shares. Where the terms and
level of the trust’s ownership allow it,
the ability to pay bonuses free of
income tax may be an added
attraction.

7. Hybrid ownership
• Trust ownership is preferred but you want
some individual share ownership to
provide:
• a modest degree of capital growth
• a direct feeling of ownership

8. Information
Sharing
Knowledge
development
and training
Rewards and
recognition
systems
Power
Sharing
Four
Dimensions of
Participation

9. Organization and work design
• teams, enriched jobs, flat lean structure, product/service/
customer-based activities; task forces, diagonal slice policy groups
Physical layout and design
• egalitarian space, layout that accommodates a changing team
structure, meeting areas, co-location of business units
Information systems
• two-way communication, local ownership, performance
orientation, human system orientation
Managerial role, style, and processes
• leadership, vision, empowerment, enabling, participation
Reward System
• individualized rewards, performance based rewards, growth-
oriented rewards, open and participative administration
Organizational Features

10. Training and development
• lifetime learning, economic literacy, teamwork, personal growth,
understanding of the business
Staffing
• careful selection, mutual commitment, support of the culture,
personal growth
Personnel policies
Culture and values
• participative design and administration, individual choices,
encouragement of social interaction, development of orientation,
support of the family
• empowerment, personal accountability, open access to
information, focus on the customer, commitment to continuous
improvement, teamwork

13. Advantages
 High employee morale
Ownership towards the organisation
oHigh commitment and feeling of belongingness to work and company.
Lean organisation – reduced overheads
oReduction in staff and supervision
Better communication between management and workers
oMore effective resolution of conflict and reduced number of grievances
due to better communication

14. Increased levels of agility and innovativeness
oBunch of entrepreneurs working
oMulti skilled employees
Varied inputs and decision-making processes improve the
quality of decisions
Transparency in policy and action
Increased job satisfaction
oInvolvement in decision making and profit sharing
Advantages

15. Difficult to apply in functions where specialisation is required
*Complex technology and specific skills
Extreme levels of financial and technological transparency can hurt
*Trade secrets might be compromised
Profit sharing limits the capability for further investment or expansion
*Earned profits diluted due to sharing
Additional expenditure on cross training of employees
*Extra time and money required
Disadvantages

16. Slow decision making
*Too many parties involved
Resistance of middle management
*Power sharing not acceptable
Disadvantages

17. Service: Indian Coffee House, Arizmendi Bakery, San
Francisco.
Manufacturing: Semco, (Brazil), Irizer, Mondragon
corporation, (Spain), W L Gore ,USA.
Information Tech. : HCL, Google
*video
Is the Structure applicable ??

19. Keep Learning!
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