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Professor Who Expanded the Study of Employee Ownership Will Hold Endowed Chair
A number of years ago, Professor Joseph Blasi noticed that the phenomenon of employee ownership in U.S. companies was growing and evolving, yet attracting little scholarly attention. That would soon change. Blasi and Professor Douglas Kruse –longtime colleagues at the School of Management and Labor Relations (SMLR) – have become the world’s foremost experts in the field of shared capitalism, writing several influential books on the subject, including the widely acclaimed In the Company of Owners. The book examined the 100 companies that run the Internet, and was named one of the 10 Best Books of the Year by Business Week when it appeared in 2003. They have also developed a competitive fellowship program at SMLR that identifies the emerging scholars throughout the country. The Rutgers Board of Governors recently recognized Blasi’s and Kruse’s accomplishments by creating the first endowed chair in employee ownership in the world, and the first endowed chair in SMLR history. In an investiture ceremony February 24, Blasi will become the inaugural holder of the J. Robert Beyster Professorship of Employee Ownership.The new endowed chair is part of Our Rutgers, Our Future, the Rutgers University Foundation's $1 billion fundraising campaign, the largest in the university's history.Blasi recently spoke to Rutgers Today about employee ownership and shared capitalism, pointing out that the phenomenon is at work in some of the largest companies in the nation.
Rutgers Today: In your most recent book you give several examples of shared capitalism that included: profit sharing, stock options, and outright employee ownership. What is the common theme that connects these practices?
Blasi: Shared capitalism means that workers in corporations share in the results of the corporation by receiving stock or profits and don’t just receive a fixed salary. We recently finished a 10-year study sponsored by the National Bureau for Economic Research, Shared Capitalism at Work, published by the University of Chicago Press.
Rutgers Today: You are known worldwide as an authority on the subject. What made you become interested in the first place?
Blasi: I have always been interested in what makes a good society and a good workplace. Early in my career, I studied 19th-century American utopian experiment. I did my doctoral thesis on the economy and society of the Israeli kibbutz. Later on in my career when I was teaching a course on the subject at Harvard, I began studying the phenomenon of employees buying their companies, and I served as a legislative assistant in the House of Representatives dealing with related legislation. Then, employee ownership became the main focus of my research.
Rutgers Today: How prevalent is shared capitalism in the United States?
Blasi: We’ve been working with the General Social Survey at the University of Chicago to measure this. About 20 percent of American workers own stock in the company where they work, about a third have profit sharing, and one-tenth get stock options; however, the amounts for most workers are modest. There are a large number of high- tech companies – Intel, Google, and Cisco – that have meaningful broad-based employee ownership. There are 11,000 medium-sized companies – about 100 to 500 employees – that have adopted the Employee Stock Ownership Plan, (ESOP) where workers own 30 percent to 100 percent of the company. There are many prominent Fortune 500 companies, such as Proctor & Gamble, Microsoft, and UPS, that have significant employee ownership.
Rutgers Today: Is there a conflict between the notion of broad-based employee ownership and the hierarchical culture of the modern corporation?
Blasi: No, today there is a lot of social science evidence that shows the combination of meaningful broad-based employee ownership with a team-oriented corporate culture improves company performance. Understanding how this works was the focus of our new book.
Rutgers Today: What is the future of shared capitalism?
Blasi: In publicly traded companies, we observe many examples where employees hold about 10 to 20 percent of the company through stock and stock options, while the other owners are individual shareholders and mutual funds. Many publicly traded companies are really combinations of significant employee and investor ownership. That appears to be where a good sector on the NYSE and Nasdaq are going.
For more on SMLR’s national fellowship program on shared capitalism, click here.