Advances in the Economic Analysis of Participatory and Labor-Managed Firms, Volume 12

This 12th edition of Advances in the Economic Analysis of Participatory and Labor-Managed Firms contains a stimulating collection of original papers spanning a wide variety of topics. Part 1 of the volume contains three papers on the subject of job design and organizational performance, covering the determinants of multiskilling from a theoretical perspective and also the empirical effect of multiskilling and teams on financial performance. Part 2 of the volume concerns compensation, worker attitudes, and productivity. Papers in this section cover the effect of rules and costs on employer-provided health insurance, majority ownership and executive compensation, worker attitudes towards different forms of employee ownership and variable pay, and an analysis of performance-related pay, unions, and productivity in Italy. Part 3 contains three studies of worker cooperatives and nonprofit organizations in Italy, Spain, and Uruguay. The volume concludes with a debate on free trade and the ecological effects of alternative socio-economic systems. FRONT COVER......Page 1 ADVANCES IN THE ECONOMIC ANALYSIS OF PARTICIPATORY AND LABOR-MANAGED FIRMS......Page 4 COPYRIGHT PAGE......Page 5 CONTENTS......Page 6 LIST OF CONTRIBUTORS......Page 10 FOREWORD......Page 12 INTRODUCTION......Page 14 PART I: JOB DESIGN AND ORGANIZATIONAL PERFORMANCE......Page 21 SPECIALIZATION, MULTISKILLING, AND ALLOCATION OF DECISION RIGHTS......Page 23 INTRODUCTION......Page 24 BASIC MODEL......Page 29 BASIC RESULTS......Page 34 ALLOCATION OF DECISION RIGHTS......Page 36 COLLECTIVE BARGAINING AND COOPERATION......Page 42 DISCUSSION......Page 43 NOTES......Page 45 REFERENCES......Page 47 THE EFFECT OF MULTISKILLING ON LABOR PRODUCTIVITY, PRODUCT QUALITY, AND FINANCIAL PERFORMANCE......Page 55 INTRODUCTION......Page 56 LITERATURE REVIEW......Page 59 DATA......Page 62 EMPIRICAL STRATEGY AND ANALYSIS......Page 66 DISCUSSION......Page 74 ACKNOWLEDGMENTS......Page 78 REFERENCES......Page 79 APPENDIX. VARIABLE DEFINITIONS......Page 81 TEAMS, AUTONOMY, AND THE FINANCIAL PERFORMANCE OF FIRMS: NEW EVIDENCE FROM PANEL DATA......Page 83 INTRODUCTION......Page 84 BACKGROUND AND PREVIOUS LITERATURE......Page 85 DATA AND MEASURES......Page 88 EMPIRICAL TESTS......Page 92 DISCUSSION AND CONCLUSION......Page 101 REFERENCES......Page 103 PART II: COMPENSATION, WORKER ATTITUDES, AND PRODUCTIVITY......Page 107 HOW DO RULES AND COSTS AFFECT A FIRM’S SETTING OF BENEFITS? THE CASE OF HEALTH INSURANCE AND WORKFORCE SKILLS......Page 109 FRAMEWORK......Page 111 RESEARCH DESIGN......Page 114 DATA AND EMPIRICAL ANALYSIS......Page 116 RESULTS......Page 121 SUMMARY AND DISCUSSION......Page 126 NOTES......Page 128 REFERENCES......Page 130 APPENDIX......Page 132 MAJORITY OWNERSHIP AND CHIEF EXECUTIVE COMPENSATION......Page 135 INTRODUCTION......Page 136 CONCEPTUAL FRAMEWORK......Page 137 PRIVATIZATION AND TRANSITION IN ESTONIA......Page 140 DATA......Page 142 THE RELATION BETWEEN EXECUTIVE COMPENSATION AND FIRM PERFORMANCE IN TRANSITION......Page 146 SUMMARY AND IMPLICATIONS......Page 152 APPENDIX. DEFINITIONS OF VARIABLES......Page 155 NOTES......Page 156 REFERENCES......Page 158 WORKER ATTITUDES TOWARD EMPLOYEE OWNERSHIP, PROFIT SHARING AND VARIABLE PAY......Page 163 INTRODUCTION......Page 164 THEORY AND PRIOR LITERATURE......Page 165 DATA AND VARIABLES......Page 167 METHODOLOGY......Page 172 UNCONDITIONAL STATISTICS......Page 173 WHICH WORKERS PREFER FINANCIAL PARTICIPATION?......Page 175 CONCLUSION......Page 181 NOTES......Page 182 REFERENCES......Page 183 APPENDIX......Page 186 PERFORMANCE-RELATED PAY, UNIONS, AND PRODUCTIVITY IN ITALY: EVIDENCE FROM QUANTILE REGRESSIONS......Page 189 INTRODUCTION......Page 190 PRODUCTIVITY, PERFORMANCE PAYMENTS, AND UNIONS: A SHORT REAPPRAISAL......Page 192 DATA AND DESCRIPTIVE STATISTICS......Page 195 ESTIMATION RESULTS......Page 203 MANUFACTURING AND SERVICES SECTORS......Page 206 NOTES......Page 210 ACKNOWLEDGMENTS......Page 211 REFERENCES......Page 212 PART III: WORKER COOPERATIVES AND NONPROFIT ORGANIZATIONS......Page 217 PROFIT REINVESTMENT IN ITALIAN WORKER COOPERATIVES AS A CONTRIBUTION TO A COMMON GOOD: AN EMPIRICAL ANALYSIS ON WORKERS’ PERCEPTION AND MOTIVATION......Page 219 INTRODUCTION......Page 220 ASSET LOCKS IN ITALIAN WORKER COOPERATIVES......Page 222 A THEORETICAL FRAMEWORK ON PROFIT REINVESTMENT AS A COLLECTIVE ACTION: HOW TO ENHANCE COOPERATION......Page 224 INDIVIDUAL CHARACTERISTICS OF MEMBERS AND THEIR OPINION ON ASSET LOCKS: THE EMPIRICAL ANALYSIS......Page 228 CONCLUDING REMARKS......Page 242 NOTES......Page 245 REFERENCES......Page 247 DOES TRAINING POLICY HELP TO ATTRACT, RETAIN, AND DEVELOP VALUABLE HUMAN RESOURCES? ANALYSIS FROM THE MONDRAGON CASE......Page 251 INTRODUCTION......Page 252 THE VALUE OF TALENT......Page 254 THE MONDRAGON CORPORATION AND TRAINING POLICY......Page 256 METHODOLOGY OF THE INVESTIGATION......Page 261 RESULTS......Page 262 DISCUSSION......Page 270 NOTES......Page 274 ACKNOWLEDGMENTS......Page 275 REFERENCES......Page 276 GOVERNANCE AND BEHAVIOR IN NONPROFITS: ANALYSIS OF URUGUAYAN HEALTH CARE ORGANIZATIONS......Page 281 INTRODUCTION......Page 282 URUGUAYAN HEALTH SECTOR IN THE 1980s......Page 284 TYPES OF ORGANIZATION......Page 286 BEHAVIOR OF NONPROFIT ORGANIZATIONS......Page 291 ANALYSIS OF THE URUGUAYAN CASE......Page 295 CONCLUSIONS......Page 302 NOTES......Page 303 REFERENCES......Page 304 APPENDIX. LIST OF INTERVIEWS......Page 306 PART IV: FREE TRADE AND THE ECOLOGICAL EFFECTS OF ALTERNATIVE SOCIO-ECONOMIC SYSTEMS......Page 307 CAPITALISM, ECONOMIC DEMOCRACY, AND ECOLOGICAL DESTRUCTION OF OUR PLANET......Page 309 INTRODUCTION......Page 310 THE THEORETICAL ANALYSIS......Page 311 APPENDIX: REVISION OF THE THEORY OF COMPARATIVE ADVANTAGE AND EXPLANATION OF THE 2008 WORLD CRISIS......Page 316 GENERAL CONCLUSION......Page 318 THE CASE FOR CAPITALISM: A COMMENT ON JAROSLAV VANEK’S ‘‘CAPITALISM, ECONOMIC DEMOCRACY, AND ECOLOGICAL DESTRUCTION OF OUR PLANET’’......Page 319 NOTES......Page 325 REJOINDER......Page 327 FRONT COVER 1 ADVANCES IN THE ECONOMIC ANALYSIS OF PARTICIPATORY AND LABOR-MANAGED FIRMS 4 COPYRIGHT PAGE 5 CONTENTS 6 LIST OF CONTRIBUTORS 10 FOREWORD 12 INTRODUCTION 14 PART I: JOB DESIGN AND ORGANIZATIONAL PERFORMANCE 21 SPECIALIZATION, MULTISKILLING, AND ALLOCATION OF DECISION RIGHTS 23 INTRODUCTION 24 BASIC MODEL 29 BASIC RESULTS 34 ALLOCATION OF DECISION RIGHTS 36 COLLECTIVE BARGAINING AND COOPERATION 42 DISCUSSION 43 CONCLUSION 45 NOTES 45 ACKNOWLEDGMENTS 47 REFERENCES 47 THE EFFECT OF MULTISKILLING ON LABOR PRODUCTIVITY, PRODUCT QUALITY, AND FINANCIAL PERFORMANCE 55 INTRODUCTION 56 LITERATURE REVIEW 59 DATA 62 EMPIRICAL STRATEGY AND ANALYSIS 66 DISCUSSION 74 NOTES 78 ACKNOWLEDGMENTS 78 REFERENCES 79 APPENDIX. VARIABLE DEFINITIONS 81 TEAMS, AUTONOMY, AND THE FINANCIAL PERFORMANCE OF FIRMS: NEW EVIDENCE FROM PANEL DATA 83 INTRODUCTION 84 BACKGROUND AND PREVIOUS LITERATURE 85 DATA AND MEASURES 88 EMPIRICAL TESTS 92 DISCUSSION AND CONCLUSION 101 ACKNOWLEDGMENTS 103 REFERENCES 103 PART II: COMPENSATION, WORKER ATTITUDES, AND PRODUCTIVITY 107 HOW DO RULES AND COSTS AFFECT A FIRM’S SETTING OF BENEFITS? THE CASE OF HEALTH INSURANCE AND WORKFORCE SKILLS 109 FRAMEWORK 111 RESEARCH DESIGN 114 DATA AND EMPIRICAL ANALYSIS 116 RESULTS 121 SUMMARY AND DISCUSSION 126 NOTES 128 ACKNOWLEDGMENTS 130 REFERENCES 130 APPENDIX 132 MAJORITY OWNERSHIP AND CHIEF EXECUTIVE COMPENSATION 135 INTRODUCTION 136 CONCEPTUAL FRAMEWORK 137 PRIVATIZATION AND TRANSITION IN ESTONIA 140 DATA 142 THE RELATION BETWEEN EXECUTIVE COMPENSATION AND FIRM PERFORMANCE IN TRANSITION 146 SUMMARY AND IMPLICATIONS 152 APPENDIX. DEFINITIONS OF VARIABLES 155 NOTES 156 ACKNOWLEDGMENTS 158 REFERENCES 158 WORKER ATTITUDES TOWARD EMPLOYEE OWNERSHIP, PROFIT SHARING AND VARIABLE PAY 163 INTRODUCTION 164 THEORY AND PRIOR LITERATURE 165 DATA AND VARIABLES 167 METHODOLOGY 172 UNCONDITIONAL STATISTICS 173 WHICH WORKERS PREFER FINANCIAL PARTICIPATION? 175 CONCLUSION 181 NOTES 182 REFERENCES 183 APPENDIX 186 PERFORMANCE-RELATED PAY, UNIONS, AND PRODUCTIVITY IN ITALY: EVIDENCE FROM QUANTILE REGRESSIONS 189 INTRODUCTION 190 PRODUCTIVITY, PERFORMANCE PAYMENTS, AND UNIONS: A SHORT REAPPRAISAL 192 DATA AND DESCRIPTIVE STATISTICS 195 ESTIMATION RESULTS 203 MANUFACTURING AND SERVICES SECTORS 206 CONCLUSIONS 210 NOTES 210 ACKNOWLEDGMENTS 211 REFERENCES 212 PART III: WORKER COOPERATIVES AND NONPROFIT ORGANIZATIONS 217 PROFIT REINVESTMENT IN ITALIAN WORKER COOPERATIVES AS A CONTRIBUTION TO A COMMON GOOD: AN EMPIRICAL ANALYSIS ON WORKERS’ PERCEPTION AND MOTIVATION 219 INTRODUCTION 220 ASSET LOCKS IN ITALIAN WORKER COOPERATIVES 222 A THEORETICAL FRAMEWORK ON PROFIT REINVESTMENT AS A COLLECTIVE ACTION: HOW TO ENHANCE COOPERATION 224 INDIVIDUAL CHARACTERISTICS OF MEMBERS AND THEIR OPINION ON ASSET LOCKS: THE EMPIRICAL ANALYSIS 228 CONCLUDING REMARKS 242 NOTES 245 ACKNOWLEDGMENTS 247 REFERENCES 247 DOES TRAINING POLICY HELP TO ATTRACT, RETAIN, AND DEVELOP VALUABLE HUMAN RESOURCES? ANALYSIS FROM THE MONDRAGON CASE 251 INTRODUCTION 252 THE VALUE OF TALENT 254 THE MONDRAGON CORPORATION AND TRAINING POLICY 256 METHODOLOGY OF THE INVESTIGATION 261 RESULTS 262 DISCUSSION 270 LIMITATIONS 274 NOTES 274 ACKNOWLEDGMENTS 275 REFERENCES 276 GOVERNANCE AND BEHAVIOR IN NONPROFITS: ANALYSIS OF URUGUAYAN HEALTH CARE ORGANIZATIONS 281 INTRODUCTION 282 URUGUAYAN HEALTH SECTOR IN THE 1980s 284 TYPES OF ORGANIZATION 286 BEHAVIOR OF NONPROFIT ORGANIZATIONS 291 ANALYSIS OF THE URUGUAYAN CASE 295 CONCLUSIONS 302 NOTES 303 ACKNOWLEDGMENTS 304 REFERENCES 304 APPENDIX. LIST OF INTERVIEWS 306 PART IV: FREE TRADE AND THE ECOLOGICAL EFFECTS OF ALTERNATIVE SOCIO-ECONOMIC SYSTEMS 307 CAPITALISM, ECONOMIC DEMOCRACY, AND ECOLOGICAL DESTRUCTION OF OUR PLANET 309 INTRODUCTION 310 THE THEORETICAL ANALYSIS 311 APPENDIX: REVISION OF THE THEORY OF COMPARATIVE ADVANTAGE AND EXPLANATION OF THE 2008 WORLD CRISIS 316 GENERAL CONCLUSION 318 THE CASE FOR CAPITALISM: A COMMENT ON JAROSLAV VANEK’S ‘‘CAPITALISM, ECONOMIC DEMOCRACY, AND ECOLOGICAL DESTRUCTION OF OUR PLANET’’ 319 NOTES 325 REJOINDER 327 This 12th edition of'Advances in the Economic Analysis of Participatory and Labor-Managed Firms'contains a stimulating collection of original papers spanning a wide variety of topics. Part 1 of the volume contains three papers on the subject of job design and organizational performance, covering the determinants of multiskilling from a theoretical perspective and also the empirical effect of multiskilling and teams on financial performance. Part 2 of the volume concerns compensation, worker attitudes, and productivity. Papers in this section cover the effect of rules and costs on employer-provided health insurance, majority ownership and executive compensation, worker attitudes towards different forms of employee ownership and variable pay, and an analysis of performance-related pay, unions, and productivity in Italy. Part 3 contains three studies of worker cooperatives and nonprofit organizations in Italy, Spain, and Uruguay. This volume concludes with a debate on free trade and the ecological effects of alternative socio-economic systems.