Reference no: EM131685755

Question: There are a handful of employee-owned firms in the United States. In them, committees of workers make decisions that professional managers would normally make (e.g., which markets to enter, how to price products, when to build a new plant). Workers on the committees also determine the pay of their coworkers and how to split profits among themselves. In light of this chapter's discussions of teams and compensation, give several reasons why you would not expect to see employee-owned firms surviving.

a. Perhaps the most important worker-governed firms in the United States are several lumber companies in the Pacific Northwest that have been in operation since early in the twentieth century. Oddly, recent economic research has shown that their workers are actually more productive than workers in comparable lumber firms that operate for profit. Before you look at the source in the footnote, imagine some reasons why this unexpected outcome might happen.