Theory O-Is the Case Closed?

Abstract

Using survey data from employee ownership firms, the author examines employees' perceptions of being employee-owners. It appears that the employees do not really consider themselves to be employee-owners, and they do not see their status in the hierarchy change. These findings are implicitly distinct from recent research on employee stock ownership plans (ESOPs). ESOP researchers have debated whether employee ownership combined with participatory decision-making is an important explanatory variable for the comparative performance variance. Moreover, a new theory 0, beyond McGregor's and Ouchi's theory Y and Z has recently been introduced by Corey Rosen and Karen Young, stressing this complementary effect. The author elaborates further on the theory and defines the 0-type firm as an organization characterized by non-discriminatory inclusion in ownership and decision-making. Operationalizing this by distributional analysis may enhance the precision of empirical research on particular performance effects due to an 0-type management philosophy.