New Research Explores Resilience of Employee-Owned Companies
February 10, 2010
Research published today finds that companies owned by their employees are more resilient than conventionally structured companies, outperforming the market during the downturn and demonstrating a lower risk of business failure.
The report Model Growth: Do employee-owned businesses deliver sustainable performance? was commissioned by the John Lewis Partnership and is based on research by Cass Business School, including an in-depth survey of senior executives and analysis of the financial data of over 250 companies in the UK.
The research finds that the employee ownership model offers particular advantages to small and medium-sized businesses and in knowledge and skill-intensive sectors, where employee-owned companies significantly outperform competitors. Employee-owned firms also create new jobs more quickly and add more value to output and human capital than conventionally structured businesses, whilst demonstrating the same levels of profitability.
"Resilience - the ability of firms to sustain employment and growth during difficult economic conditions - has been neglected as a crucial aspect of company performance over the past two decades," said Professor Joseph Lampel, one of the report's authors. "Instead, business strategy and public policy have been dominated by an unremitting focus on maximizing share value. In the current economic conditions, business leaders and policy makers should be looking again at the resilience associated with the employee ownership model - and how it could benefit the economy as a whole."
The report is written by Professor Joseph Lampel and Dr Ajay Bhalla from Cass Business School and Dr Pushkar Jha from Newcastle University Business School. It was produced with the support of the Employee Ownership Association, which represents nearly 100 companies wholly or substantially owned by their employees, including the John Lewis Partnership.
Download a copy of the Model Growth: Do employee-owned businesses deliver sustainable performance? report. (PDF)