A Multilevel Contingency Model of Employee Ownership and Firm Productivity: The Moderating Roles of Industry Growth and Instability

Published Online:https://doi.org/10.1287/orsc.2020.1404

References

  • Ahearne M , Lam SK , Kraus F (2014) Performance impact of middle managers’ adaptive strategy implementation: The role of social capital. Strategic Management J. 35(1):68–87.CrossrefGoogle Scholar
  • Al-Najjar B , Taylor P (2008) The relationship between capital structure and ownership structure: New evidence from Jordanian panel data. Managerial Finance 34(12):919–933.CrossrefGoogle Scholar
  • Aral S , Weill P (2007) IT assets, organizational capabilities, and firm performance: How resource allocations and organizational differences explain performance variation. Organ. Sci. 18(5):763–780.LinkGoogle Scholar
  • Baysinger BD , Kosnik RD , Turk TA (1991) Effects of board and ownership structure on corporate R&D strategy. Acad. Management J. 34(1):205–214.CrossrefGoogle Scholar
  • Bidwell MJ (2013) What happened to long-term employment? The role of worker power and environmental turbulence in explaining declines in worker tenure. Organ. Sci. 24(4):1061–1082.LinkGoogle Scholar
  • Bidwell M , Won S , Barbulescu R , Mollick E (2015) I used to work at Goldman Sachs! How firms benefit from organizational status in the market for human capital. Strategic Management J. 36(8):1164–1173.CrossrefGoogle Scholar
  • Blasi J , Conte M , Kruse D (1996) Employee stock ownership and corporate performance among public companies. Indust. Labor Relations Rev. 50(1):60–79.CrossrefGoogle Scholar
  • Blasi J , Freeman R , Kruse D (2016) Do broad-based employee ownership, profit sharing and stock options help the best firms do even better? British J. Indust. Relations 54:55–82.CrossrefGoogle Scholar
  • Blasi J , Kruse D , Weltmann D (2013) Firm survival and performance in privately held ESOP companies. Kruse D , ed. Sharing Ownership, Profits, and Decision-Making in the 21st Century (Emerald Group Publishing Limited, Bingley, UK), 109–124.CrossrefGoogle Scholar
  • Bonin J , Putterman L (2013) Economics of Cooperation and the Labour-Managed Economy (Routledge, New York).CrossrefGoogle Scholar
  • Bradley SW , Shepherd DA , Wiklund J (2011) The importance of slack for new organizations facing ‘tough’ environments. J. Management Stud. 48(5):1071–1097.CrossrefGoogle Scholar
  • Buchele R , Kruse DL , Rodgers L , Scharf A (2010) Show me the money. Kruse DL , Freeman RB , Blasi JR , eds. Shared Capitalism at Work: Employee Ownership, Profit and Gain Sharing, and Broad-Based Stock Options (University of Chicago Press, Chicago), 351–375.CrossrefGoogle Scholar
  • Cai L , Cui J , Jo H (2015) Corporate environmental responsibility and firm risk. J. Bus. Ethics 139:1–32.Google Scholar
  • Cannella AA Jr , Park JH , Lee HU (2008) Top management team functional background diversity and firm performance: Examining the roles of team member colocation and environmental uncertainty. Acad. Management J. 51(4):768–784.CrossrefGoogle Scholar
  • Carberry EJ (2011) Employee ownership and shared capitalism: Assessing the experience, research, and policy implications. Carberry EJ , ed. Employee Ownership and Shared Capitalism: New Directions in Research (Cornell University Press, Ithaca, NY), 1–26.Google Scholar
  • Chang SJ , Hong J (2000) Economic performance of group-affiliated companies in Korea: Intragroup resource sharing and internal business transactions. Acad. Management J. 43(3):429–448.CrossrefGoogle Scholar
  • Chen HL , Huang YS (2006) Employee stock ownership and corporate R&D expenditures: Evidence from Taiwan’s information-technology industry. Asia Pacific J. Management 23(3):369–384.CrossrefGoogle Scholar
  • Collins J (2001) Why Some Companies Make the Leap . . . and Others Don’t. Good to Great (Harper Business, New York).Google Scholar
  • Combs J , Liu Y , Hall A , Ketchen D (2006) How much do high-performance work practices matter? A meta-analysis of their effects on organizational performance. Personnel Psych. 59(3):501–528.CrossrefGoogle Scholar
  • Connelly BL , Certo ST , Ireland RD , Reutzel CR (2011) Signaling theory: A review and assessment. J. Management 37(1):39–67.CrossrefGoogle Scholar
  • Connelly BL , Hoskisson RE , Tihanyi L , Certo ST (2010) Ownership as a form of corporate governance. J. Management Stud. 47(8):1561–1589.CrossrefGoogle Scholar
  • Crook TR , Todd SY , Combs JG , Woehr DJ , Ketchen DJ Jr (2011) Does human capital matter? A meta-analysis of the relationship between human capital and firm performance. J. Appl. Psych. 96(3):443–456.CrossrefGoogle Scholar
  • Cyert RM , March JG (1963) A Behavioral Theory of the Firm (Prentice-Hall, Englewood Cliffs, NJ).Google Scholar
  • Datta DK , Guthrie JP , Wright PM (2005) Human resource management and labor productivity: Does industry matter? Acad. Management J. 48(1):135–145.CrossrefGoogle Scholar
  • Dawson JF , Richter AW (2006) Probing three-way interactions in moderated multiple regression: Development and application of a slope difference test. J. Appl. Psych. 91(4):917–926.CrossrefGoogle Scholar
  • Dess GG , Beard DW (1984) Dimensions of organizational task environments. Admin. Sci. Quart. 29(1):52–73.Google Scholar
  • Eberhart RN , Eesley CE , Eisenhardt KM (2017) Failure is an option: Institutional change, entrepreneurial risk, and new firm growth. Organ. Sci. 28(1):93–112.LinkGoogle Scholar
  • Eisenberger R , Rhoades L , Cameron J (1999) Does pay for performance increase or decrease perceived self-determination and intrinsic motivation? J. Personality Soc. Psych. 77(5):1026–1040.CrossrefGoogle Scholar
  • Eisenhardt KM (1989) Agency theory: An assessment and review. Acad. Management Rev. 14(1):57–74.CrossrefGoogle Scholar
  • European Federation of Employee Share Ownership (2015) The Annual Economic Survey of Employee Ownership in European Countries in 2014 (European Federation of Employee Share Ownership, Brussels).Google Scholar
  • Finkel SE (1995) Causal Analysis with Panel Data , vol. 105 (Sage Publications, Thousand Oaks, CA).CrossrefGoogle Scholar
  • Freeman RB , Blasi JR , Kruse DL (2010) Introduction. Kruse DL , Freeman RB , Blasi JR , eds. Shared Capitalism at Work: Employee Ownership, Profit and Gain Sharing, and Broad-Based Stock Options (University of Chicago Press, Chicago).CrossrefGoogle Scholar
  • Gerhart B , Rynes SL , Fulmer IS (2009) Pay and performance: Individuals, groups, and executives. Acad. Management Ann. 3(1):251–315.CrossrefGoogle Scholar
  • Guthrie JP , Datta DK (2008) Dumb and dumber: The impact of downsizing on firm performance as moderated by industry conditions. Organ. Sci. 19(1):108–123.LinkGoogle Scholar
  • Han JH , Bartol KM , Kim S (2015) Tightening up the performance-pay linkage: Roles of contingent reward leadership and profit-sharing in the cross-level influence of individual pay-for-performance. J. Appl. Psych. 100(2):417–430.CrossrefGoogle Scholar
  • Hanlon M , Rajgopal S , Shevlin T (2003) Are executive stock options associated with future earnings? J. Accounting Econom. 36(1–3):3–43.CrossrefGoogle Scholar
  • Heeley MB , King DR , Covin JG (2006) Effects of firm R&D investment and environment on acquisition likelihood. J. Management Stud. 43(7):1513–1535.CrossrefGoogle Scholar
  • Hofstede Insights (2018) Compare countries. Retrieved July 10, 2018, https://www.hofstede-insights.com/product/compare-countries/.Google Scholar
  • Huselid MA (1995) The impact of human resource management practices on turnover, productivity, and corporate financial performance. Acad. Management J. 38(3):635–672.CrossrefGoogle Scholar
  • Huselid MA , Jackson SE , Schuler RS (1997) Technical and strategic human resources management effectiveness as determinants of firm performance. Acad. Management J. 40(1):171–188.Google Scholar
  • Jackson SE , Schuler RS (1995) Understanding human resource management in the context of organizations and their environments. Annual Rev. Psych. 46:237–264.CrossrefGoogle Scholar
  • Ji YY , Guthrie JP , Messersmith JG (2014) The tortoise and the hare: The impact of employment instability on firm performance. Human Resource Management 24(4):355–373.CrossrefGoogle Scholar
  • Jones DC (1993) The productivity effects of employee ownership within command economies: Evidence from Poland. Managerial Decision Econom. 14(5):475–485.CrossrefGoogle Scholar
  • Jones DC , Kato T (1993) Employee stock ownership plans and productivity in Japanese manufacturing firms. British J. Indust. Relations 31(3):331–346.CrossrefGoogle Scholar
  • Kang S , Kim A (2019) Employee stock ownership and financial performance in European countries: The moderating effects of uncertainty avoidance and social trust. Human Resource Management 58(6):641–655.CrossrefGoogle Scholar
  • Keats BW , Hitt MA (1988) A causal model of linkages among environmental dimensions, macro organizational characteristics, and performance. Acad. Management J. 31(3):570–598.CrossrefGoogle Scholar
  • Kim E , Ouimet P (2014) Broad-based employee stock ownership: Motives and outcomes. J. Finance 69(3):1273–1319.CrossrefGoogle Scholar
  • Kim KY , Patel PC (2017) Employee ownership and firm performance: A variance decomposition analysis of European firms. J. Bus. Res. 70:248–254.CrossrefGoogle Scholar
  • Kim KY , Patel PC (2020) Broad‐based employee ownership and labour productivity during the 2008 recession: Evidence from public firms in Europe. British J. Indust. Relations 58(2):396–423.CrossrefGoogle Scholar
  • Kim KY , Atwater L , Patel PC , Smither JW (2016) Multisource feedback, human capital, and the financial performance of organizations. J. Appl. Psych. 101(11):1569–1584.CrossrefGoogle Scholar
  • Kim KY , Atwater L , Jolly PM , Kim M , Baik K (2020) The vicious cycle of work life: Work effort vs. career development effort. Group Organ. Management 45(3):351–385.CrossrefGoogle Scholar
  • Koka BR , Madhavan R , Prescott JE (2006) The evolution of interfirm networks: Environmental effects on patterns of network change. Acad. Management Rev. 31(3):721–737.CrossrefGoogle Scholar
  • Kotabe M , Srinivasan SS , Aulakh PS (2002) Multinationality and firm performance: The moderating role of R&D and marketing capabilities. J. Internat. Bus. Stud. 33(1):79–97.CrossrefGoogle Scholar
  • Kozlowski SWJ , Klein KJ (2000) A multilevel approach to theory and research in organizations: Contextual, temporal, and emergent processes. Klein KJ , Kozlowski SWJ , eds. Multilevel Theory, Research, and Methods in Organizations (Jossey-Bass, San Francisco), 3–90.Google Scholar
  • Krueger AB (1991) Ownership, agency and wages: An examination in the fast food industry. Quart. J. Econom. 106(1):75–101.CrossrefGoogle Scholar
  • Kruse DL (1996) Why do firms adopt profit‐sharing and employee ownership plans? British J. Indust. Relations 34(4):515–538.CrossrefGoogle Scholar
  • Kruse DL (2002) Research evidence on prevalence and effects of employee ownership. J. Employee Ownership Law Finance 14(4):65–90.Google Scholar
  • Kruse DL , Blasi JR , Park R (2010a) Shared capitalism in the US economy. Kruse DL , Freeman RB , Blasi JR , eds. Shared Capitalism at Work: Employee Ownership, Profit and Gain Sharing, and Broad-Based Stock Options (University of Chicago Press, Chicago), 41–75.CrossrefGoogle Scholar
  • Kruse DL , Freeman RB , Blasi JR (2010b) Shared Capitalism at Work: Employee Ownership, Profit and Gain Sharing, and Broad-Based Stock Options (University of Chicago Press, Chicago).CrossrefGoogle Scholar
  • Kruse DL , Blasi J , Weltmann D , Kang S , Kim JO , Castellano W (2019) Do employee share owners face too much financial risk? Working paper, IZA Institute of Labor Economics, Bonn, Germany.Google Scholar
  • Kurtulus FA , Kruse DL (2017) The effect of employee ownership on employment stability and firm survival during the past two recessions. Employment Res. Newsletter. 24(1):5–6.Google Scholar
  • Lawler EE (1968) A correlational-causal analysis of the relationship between expectancy attitudes and job performance. J. Appl. Psych. 52(6):462–468.CrossrefGoogle Scholar
  • Lewis K , Lange D , Gillis L (2005) Transactive memory systems, learning, and learning transfer. Organ. Sci. 16(6):581–598.LinkGoogle Scholar
  • Mathieu M (2018) Annual economic survey of employee share ownership in European countries 2017. Report, European Federation of Employee Share Ownership, Brussels.Google Scholar
  • Matta E , McGuire J (2008) Too risky to hold? The effect of downside risk, accumulated equity wealth, and firm performance on CEO equity reduction. Organ. Sci. 19(4):567–580.LinkGoogle Scholar
  • McKay PF , Avery DR , Liao H , Morris MA (2011) Does diversity climate lead to customer satisfaction? It depends on the service climate and business unit demography. Organ. Sci. 22(3):788–803.LinkGoogle Scholar
  • McNamara GM , Haleblian JJ , Dykes BJ (2008) The performance implications of participating in an acquisition wave: Early mover advantages, bandwagon effects, and the moderating influence of industry characteristics and acquirer tactics. Acad. Management J. 51(1):113–130.CrossrefGoogle Scholar
  • Miller D (2008) Stranger in a strange land: A brief journey into the realm of empirical corporate finance. Strategic Organ. 6(3):329–339.CrossrefGoogle Scholar
  • Misangyi VF , Elms H , Greckhamer T , Lepine JA (2006) A new perspective on a fundamental debate: A multilevel approach to industry, corporate, and business unit effects. Strategic Management J. 27(6):571–590.CrossrefGoogle Scholar
  • Mitchell TR (1974) Expectancy models of job satisfaction, occupational preference and effort: A theoretical, methodological, and empirical appraisal. Psych. Bull. 81(12):1053–1077.CrossrefGoogle Scholar
  • National Center for Employee Ownership (2018) ESOPs by the numbers. Retrieved July 26, 2018, https://www.nceo.org/articles/esops-by-the-numbers.Google Scholar
  • Nielsen BB , Nielsen S (2013) Top management team nationality diversity and firm performance: A multilevel study. Strategic Management J. 34(3):373–382.CrossrefGoogle Scholar
  • O’Boyle EH , Patel PC , Gonzalez‐Mulé E (2016) Employee ownership and firm performance: A meta‐analysis. Human Resource Management J. 26(4):425–448.CrossrefGoogle Scholar
  • O’Brien JP (2003) The capital structure implications of pursuing a strategy of innovation. Strategic Management J. 24(5):415–431.CrossrefGoogle Scholar
  • Paruchuri S , Perry-Smith JE , Chattopadhyay P , Shaw JD (2018) New ways of seeing: Pitfalls and opportunities in multilevel research. Acad. Management J. 61:797–801.CrossrefGoogle Scholar
  • Ployhart RE , Van Iddekinge CH , MacKenzie WI Jr (2011) Acquiring and developing human capital in service contexts: The interconnectedness of human capital resources. Acad. Management J. 54(2):353–368.CrossrefGoogle Scholar
  • Podsakoff PM , MacKenzie SB , Lee JY , Podsakoff NP (2003) Common method biases in behavioral research: A critical review of the literature and recommended remedies. J. Appl. Psych. 88(5):879–903.CrossrefGoogle Scholar
  • Raudenbush SW , Bryk AS (2002) Hierarchical Linear Models: Applications and Data Analysis Methods (Sage Publications, Thousand Oaks, CA).Google Scholar
  • Richter A , Schrader S (2017) Levels of employee share ownership and the performance of listed companies in Europe. British J. Indust. Relations 55(2):396–420.CrossrefGoogle Scholar
  • Rousseau DM (2006) Is there such a thing as “evidence-based management”? Acad. Management Rev. 31(2):256–269.CrossrefGoogle Scholar
  • Sanchez JI , Kraus E , White S , Williams M (1999) Adopting high-involvement human resource practices: The mediating role of benchmarking. Group Organ. Management 24(4):461–478.CrossrefGoogle Scholar
  • Sesil JC , Kruse DL , Blasi JR (2003) Sharing ownership via employee stock ownership. Sun L , ed. Ownership and Governance of Enterprises (Palgrave Macmillan, London), 96–123.CrossrefGoogle Scholar
  • Sesil JC , Kroumova MK , Blasi JR , Kruse DL (2002) Broad‐based employee stock options in us ‘new economy’ firms. British J. Indust. Relations 40(2):273–294.CrossrefGoogle Scholar
  • Shaw JD , Park TY , Kim E (2013) A resource-based perspective on human capital losses, HRM investments, and organizational performance. Strategic Management J. 34(5):572–589.CrossrefGoogle Scholar
  • Shaw JD , Tangirala S , Vissa B , Rodell JB (2018) New ways of seeing: Theory integration across disciplines. Acad. Management J. 61(1):1–4.CrossrefGoogle Scholar
  • Simerly RL , Li M (2000) Environmental dynamism, capital structure and performance: A theoretical integration and an empirical test. Strategic Management J. 21(1):31–49.CrossrefGoogle Scholar
  • Soupata L (2005) Engaging employees in company success: The UPS approach to a winning team. Human Resource Management 44(1):95–98.CrossrefGoogle Scholar
  • Staw BM , Szwajkowski E (1975) The scarcity-munificence component of organizational environments and the commission of illegal acts. Admin. Sci. Quart. 20(3):345–354.CrossrefGoogle Scholar
  • Staw BM , Sandelands LE , Dutton JE (1981) Threat rigidity effects in organizational behavior: A multilevel analysis. Admin. Sci. Quart. 26(4):501–524.CrossrefGoogle Scholar
  • Suisse C (2014) Global wealth report. Report, The Credit Suisse Research Institute, Zurich, Switzerland.Google Scholar
  • Sutton RI , Staw BM (1995) What theory is not. Admin. Sci. Quart. 40(3):371–384.CrossrefGoogle Scholar
  • Tosi HL Jr , Slocum JW Jr (1984) Contingency theory: Some suggested directions. J. Management 10(1):9–26.CrossrefGoogle Scholar
  • Triana MDC , Miller TL , Trzebiatowski TM (2013) The double-edged nature of board gender diversity: Diversity, firm performance, and the power of women directors as predictors of strategic change. Organ. Sci. 25(2):609–632.LinkGoogle Scholar
  • Van Eerde W , Thierry H (1996) Vroom’s expectancy models and work-related criteria: A meta-analysis. J. Appl. Psych. 81(5):575–586.CrossrefGoogle Scholar
  • Wright PM , Gardner TM , Moynihan LM , Allen MR (2005) The relationship between HR practices and firm performance: Examining causal order. Personnel Psych. 58(2):409–446.CrossrefGoogle Scholar
  • Yoon Y , Sengupta S (2019) Employee share ownership, training, and early promotion policy as a bundle in enhancing labor productivity: A test of the three‐way interaction effect. Human Resource Management 58(6):603–620.CrossrefGoogle Scholar
  • Youndt MA , Snell SA , Dean JW Jr , Lepak DP (1996) Human resource management, manufacturing strategy, and firm performance. Acad. Management J. 39(4):836–866.CrossrefGoogle Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.