In his most recent book ‘Beyond the Corporation: Humanity working’, David Erdal, book author and Non-Executive Director at Baxendale Ownership, strongly promotes the superiority of employee ownership. He gives a wide range of best practice examples across industries from various countries, without neglecting the essential theoretical foundation of the concept of democratic employee ownership. The book, which was published in March 2011, builds an argument around the financial collapse 2008 - 2009, when many traditional companies failed, suffered severely, or at the very least were shaken.
Table of Contents
1. Introduction
2. Theoretical foundation of the concept of democratic employee ownership
3. Employee ownership: stories of four pioneers
4. The ownership effect: contributions and participation
Research Objectives and Themes
The primary objective of this critical book review is to evaluate David Erdal's arguments regarding the superiority of employee ownership as a transformative corporate model. The analysis assesses the theoretical underpinnings and empirical claims presented in the text, while contrasting them with alternative corporate structures and economic perspectives.
- The impact of employee ownership on corporate prosperity, health, and employee happiness.
- The structural challenges of business succession and exit processes in employee-owned firms.
- The tension between democratic organizational structures and the need for fast decision-making.
- A comparative analysis between employee ownership models and traditional corporate governance (e.g., the German Mittelstand).
- The role of corporate culture and worker empowerment in enhancing long-term organizational success.
Excerpt from the Book
The Ownership Effect
The third chapter is devoted to ordinary people that work for firms such as John Lewis, an employee-owned department store chain, who Erdal interviewed about their contribution and participation in business. Moreover, he speaks about the ‘ownership effect’ and concludes that ‘working this way appeals to people at a deeply natural level’ (Erdal, 2011: 172). However, he admits, a sustainable employee-ownership concept requires a workable, well-structured takeover (typically business succession) and exit process (funding, repurchase liability of the firm) and ultimately good governance (a culture of involvement of all owner-employees) to ‘let humanity work’ (Erdal, 2011: 223). If Erdal hasn’t won you over by this point, his departure in the final chapter of ‘Beyond the Corporation: Humanity Working’ to times where humans were living in caves is unlikely to persuade you any further to abolish the prevailing shareholder-capitalism.
Summary of Chapters
1. Introduction: This chapter establishes the context of the book, introducing the author’s background and the core thesis that employee ownership offers a superior alternative to traditional corporate models.
2. Theoretical foundation of the concept of democratic employee ownership: This section details the economic and theoretical arguments against the traditional shareholder-capitalism model, focusing on the unequal power balance between owners and employees.
3. Employee ownership: stories of four pioneers: The author presents historical and contemporary case studies to illustrate the practical application of employee ownership principles across different industries and countries.
4. The ownership effect: contributions and participation: This concluding analysis explores the psychological and practical benefits of employee ownership, while also addressing the systemic governance and succession challenges necessary for long-term sustainability.
Keywords
Employee ownership, Corporate governance, Shareholder-capitalism, Democratic partnership, Empowerment, Business succession, Labor-managed firms, Organizational structure, Worker involvement, Economic efficiency, Innovation, Decision-making, Corporate culture, Employee satisfaction, Wealth distribution
Frequently Asked Questions
What is the core focus of this critical review?
The review evaluates David Erdal's book 'Beyond the Corporation: Humanity Working', focusing on his arguments for the superiority of employee ownership over traditional corporate models in the post-financial crisis era.
What are the primary themes discussed in the work?
The work centers on the benefits of employee ownership, the necessity of empowerment, the challenges of decision-making in democratic structures, and the potential for a more uniform distribution of wealth.
What is the author's main research goal?
The goal is to provide a critical assessment of whether employee ownership is a viable and superior alternative to the prevailing shareholder-capitalism, using both historical examples and contemporary case studies.
Which scientific methods are employed in the book?
The book primarily utilizes qualitative research, relying on personal experience, business accounts, interviews with employees in large firms, and historical analysis of employment contracts.
What subjects are covered in the main body of the text?
The main body examines the unfavorable nature of traditional employment relationships, the historical genesis of labor laws, the success stories of employee-owned pioneers, and the practical requirements for sustainable governance in sharing models.
Which keywords best characterize the analysis?
Key terms include employee ownership, organizational structure, democratic partnership, worker empowerment, and corporate governance.
How does the author address the risk of slow decision-making in democratic firms?
Erdal argues that good organizational structures and a culture of involvement offset these weaknesses, though the reviewer challenges this by noting that large, complex, and global firms often require rapid, centralized decision-making.
What critique does the reviewer offer regarding the empirical evidence in the book?
The reviewer notes a lack of sufficient empirical evidence and statistical data, pointing out that the book relies more on arguments and individual accounts rather than hard quantitative research.
How does the reviewer compare Erdal's theory with the German Mittelstand?
The reviewer highlights the German Mittelstand as an example of highly innovative, family-owned firms that maintain traditional owner-employee relationships while achieving economic success, thereby challenging the necessity of a total transformation to employee ownership.
- Quote paper
- Benjamin Renner (Author), 2013, Beyond the Corporation. Humanity Working by David Erdal - Book review, Munich, GRIN Verlag, https://www.grin.com/document/271875
