Reference no: EM13346757
W. L. Gore is the maker of the Gore-Tex waterproof fabric found in all sorts of outdoor clothing. Gore-Tex is a unique kind of textile made, basically, out of Teflon. Gore-Tex's pores are hundreds of times too small to let through water droplets. Gore was working for his father's company, which made wires and coatings for wires. He tried making a plumber's tape with a Teflon coating, but the sheet of Teflon material he was using wasn't flexible enough. He got so frustrated that he jerked at it in his hands. When he stretched it that way, it changed its structure and became porous. Gore realized that the material had commercial possibilities and built Gore-Tex around the invention.
W. L. Gore also has a unique organizational structure. There are no directors, line managers, operatives, or secretaries. All the company's employees are referred to as "associates" and share decision-making authority. When a machine operator left W. L. Gore, the human resource department began looking for a replacement. However, before anyone got as far as posting a want ad, the man's former team members met and figured out how they could make do with one less body. They would have to work harder without more pay, but they wanted to do what was best for the enterprise.
The cooperative spirit of this company arises from a unique structure with no fixed hierarchy, few titles, and no formal job descriptions. Any "associate" can speak directly to any other without going through a chain of command. Together the 6,000 associates own the company.
The theory behind employee-ownership programs is that they will transform workers from clock punchers into partners who will be motivated to better serve customers and make things run more efficiently. At the most successful worker-owned firms, the theory is pretty close to reality.
On average, worker-owned companies survive longer, lose fewer workers, enjoy bigger profits, and are more productive than their non-employee-owned competitors. The key to the success of employee-owned companies is openness of information and decision making.
Each worker at Gore enjoys broad discretion to make minor decisions. Bigger ones?hiring and firing, setting compensation?are made by committees whose members constantly shift with the demands of the business. Anyone can start a new project simply by persuading enough people to go along with the idea. Even Bob Gore, chair and son of the founders, has his compensation set by a committee.
The arrangement has its costs. Above all, workers are forced to devote a lot of time to building relationships. Says process technology manager Michael Jones, "At a traditional company, you have one boss to please. Here, you have everyone to please." Few companies go so far; most American firms in which workers own a majority of the stock are organized as conventional hierarchies. But evidence is growing that the most successful firms are those that find some consistent way of empowering workers.
Questions
1. What do you see as the advantages and disadvantages of working for a worker-owned firm?
2. Since there are no hierarchies in worker-owned firms, how would you go about setting the pay scale for people, especially over time? Since there is no hierarchy, there is no way of moving up in the firm. How do you motivate people in such conditions?
3. A worker-owned firm is a radical way of empowering workers. What is the advantage of empowering workers in the first place?