Employee-owned corporation
From Biocrawler, the free encyclopedia.
Employee-owned corporations are generally a model of ownership of a corporation where the corporation is owned by the employees who work for it. Employees are usually given a share of the corporation after a certain length of employment or they can buy shares at any time. A 100% employee owned corporation is entirely owned by its employees and thus shares are not sold on public stock markets. Employee owned corporations often adopt profit sharing where the profits of the corporation is shared with the employees. These types of corporations also often have boards of directors elected directly by the employees
Benefits
There are several rationales for employee owned corporations. It gives the employees a sense of ownership in the corporation and allows them to benefit from the corporations success. It also places control of the corporation in the hands of people who actually work for it and have some interest in how it is run rather than simply profits. Publicly traded corporations are believed by many to encourage profit making over all other considerations, including the welfare of the workers, the products and the environment.
Disadvantages
A chief complaint lodged against employee-owned corporations is that, like unions, the employees elect the leaders, but the leaders are not necessarily responsible to the employees. Also, employee-owned corporations often have troubles with slow decision making.
