Equality, Participation, Transition: Essays in Honour of Branko Horvat

6
Employee Participation in
Enterprise Control and Returns:
Patterns, Gaps and Discontinuities*
Mario Domenico Nuti
6.1 Introduction
This paper reviews and attacks the standard classification of enterprise
types by degree of employee participation in enterprise returns and
control rights, an approach exemplified by the work of Ben-Ner and
Jones (1995). This is conceptualized as a continuous spectrum of combinations
of different degrees of the two forms of participation, with
continuous though non monotonic effects on productivity.
An alternative approach is developed in which, unlike that of
Ben-Ner’s and Jones’s:
1 Returns may include not only net profits but also the net increase in
enterprise capital value.
2 Control is divided between industrial democracy and entrepreneurial
control.
3 Employees’ dominant entrepreneurial control is split into two radically
different cases according to whether control is exercised by
employees individually holding a smaller share of equity than of
* This paper originated in a discussion on employee ownership at an ILO seminar
held in Budapest in February 1997. I owe much to the seminar participants
and in particular Felix FitzRoy, Derek Jones, Mark Klinedinst, George Lajtai,
Niels Mygind, Charles Rock, Milica Uvalić, Daniel Vaughan-Whitehead –
though many of them should be credited with views different, sometimes opposite,
to those expressed here. While my views on employee participation, over
time, have diverged from those of Branko Horvat (as exemplified, for instance,
in Horvat, 1982) and other staunch supporters of self-managed and workerowned
enterprises, I still share Branko’s values and I regard him as an important
intellectual stimulus and source of inspiration. I therefore hope that he will
accept this somewhat heretical text as a token of esteem and affection.
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