diet coke for breakfast

Tuesday, June 15, 2004

Posted by Tanstaafl
Labor-Controlled Corporations and the Larger Problem of Employee Participation in Corporate Governance

I find this fairly interesting. I wonder if it can be extended to employee owned firms? In that case, maximizing labor's utility might offset the loss to traditional share holder value, and create a synergistic benefit to the labor/owners... but I doubt it. If they truly "invest less, take fewer risks, grow more slowly, create fewer new jobs, have worse free cash flow problems, and exhibit lower labor and total factor productivity" then the business won't be succesful, and employees and shareholders will all be worse off.


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