South-Western - Management  
We're All the Boss
Topic Organizational Environments and Cultures
Key Words stocks, employee-ownership
InfoTrac Reference A84354193
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News Story

Employees at W.L. Gore, makers of Gore-Tex waterproof fabric, have a cooperative spirit that arises from a unique structure with no fixed hierarchy, few titles and no formal job descriptions. The 6,000 employees have owned the company and shared in its day-to-day operations for 44 years. Despite the recession last year, sales were up.

Employee-ownership plans have lost some of their popularity in recent years as the allure of stock options has faded. The theory behind employee-ownership programs is that they transform workers from clock punchers to partners who will be better motivated to serve customers and make things run efficiently. On average, employee-owned companies tend to survive longer, lose fewer workers, enjoy bigger profits and are more productive than their non-employee-owned competitors. But not all employee-owned companies excel.

In return for lower wages in 1994, United Airlines pilots and mechanics received stock. The company continued doing business as usual, however, with a traditional hierarchy. By contrast, Southwest Airlines encourages its employees and implements worker suggestions, having town hall-style forums with top management. Southwest is making a profit and United is in deep financial trouble.

The key, experts have found, is to give employees the power to influence how they do their day-to-day job.

Questions
1.

How can employee-ownership of a company help make it more successful?

2.

What is the chain of command in a typical organization? How might the chain of command be different in a privately owned company versus an employee owned company?

Source Laird Harrison, "We're All the Boss," Time April 8, 2002.
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