The domain of this paper is agenda setting. The focus of this paper is how to
move Employee Stock Ownership Plans (ESOPs), and other forms of employee
ownership, onto the agenda for government. The problem addressed is the under
utilization of employee ownership (in the United States). The reason for
studying this topic is to provide an analysis of why employee ownership is
overlooked in the agenda process and to provide a suggestion on how to move
employee ownership onto the governmental agenda.
The argument is that the promoters of employee ownership utilize arguments
that do not address the concerns of policy makers. Often time, the promoters of
employee ownership utilize democracy and social justice as the driving force of
their argument to promote employee ownership. Policy makers, in state and local
areas, focus on economic gains. Therefore, the two groups never see eye-to-eye
on the use of employee ownership. In other words, waiving the flag may not be as
effective as waiving the dollar.
To explore this topic, the following sections are presented. First, the
debate between the two groups, promoters of employee ownership and economists,
is presented. Second, why each side has trouble in understanding the other and
why is discussed. Third, a method for modifying information so as to communicate
effectively is provided. Fourth, tools for promoters of employee ownership to
draw upon are presented. Fifth, concluding remarks on the topics presented is
given.
The Discussants
On the side of the promoters of employee ownership, and participation, are
those advocates who draw heavily on democracy. Carol Pateman, in her book
Participation and Democratic Theory, is the best example. In her book, she cites
people like Mill to provide support for her argument that participation by the
masses is an underpinning of democracy. Participation is the necessary and
sufficient condition for the actual existence of a true democracy. Pateman then
focuses her argument into the context of the workplace. She states that workers
must be able to participate in the affairs of the workplace in order for
democracy to thrive. She draws upon the Yugoslav workers' self-management model
as an empirical example for her argument. She then states that for effective
participation to occur in the workplace, two criteria should exist in the
workplace. One, there must be a realistic opportunity for all workers to act in
positions in which they can participate. Two, low-level positions must exist so
as to provide a training ground for people to then work in higher level
positions. Her conclusion is that participation in all aspects of life is
necessary for democracy to exist and thrive.
On the other side of the coin are the economists. Economists reduce decisions
down to money. For economists, economics is more important than politics in
decision-making. Economics is also more important for economic developers and
policy makers as well. In Thomas Dye's book, Understanding Public
Policy--7th edition--he states that economic variables are more
important than political variables. "When political factors are controlled,
economic development continues to have a significant impact on public policy.
But when the effects of economic development are controlled, political factors
turn out to have little influence on policy outcomes." (319)
The conflict between democracy and capitalism becomes exacerbated if one sees
capitalism and democracy as incompatible. In Bowles and Gintis's book, Democracy
and Capitalism, they argue that capitalism and democracy are mutually
incompatible with capitalism acting as the driver of economic decisions. No
longer does the voter, or citizen, drive the political machine. Rather,
capitalism is what motivates decisions. This is because capitalists control
production, investment, and state-economic policy. (67) The true power of the
capitalist is the capitalists' ability to move around, i.e. capital flight, when
the conditions in a certain environment become "unfavorable" to economic
pursuits. For example, decision-makers will not yield to citizen demands for
more environmental protection, because a company may exit if more stringent laws
are passed. The impact of losing a company for an economy can be devastating,
and this fear puts capitalists in the driver seat of economic policy. Therefore,
the masses, and their means of stating their demands through democracy, are
shunned in order that public officials may create amicable environments to
capitalists.
Discussions
When an advocator of democracy and participation enters a room with an
economist, then the two are bound to have communication problems. The advocator
will talk about participation as a higher goal, an underpinning of democracy, or
an inalienable right. Perhaps the advocator will even talk about the ills of
capitalism and its disastrous effects on the very foundations of our liberal,
democratic order. The economists will think that the underpinnings of democracy
may be shaken, but economics is more important and the driver of all decisions.
In fact, the economists may say, "this talk about democracy is inimical to
capitalism." This conversation between two groups is commonplace. In Baumgartner
and Jones's book, Agenda and Instability in American Politics, they state that
often time groups or discussants talk right past each other. Rather than
actually hearing what the other side states and trying to see the connection,
people will dismiss as irrelevant that which does not fit easily into their own
frame of reference. (Chapter 10)
The implication of not being understood, given that the discourse used is
outside of the lens of the listener, means that the presenter must re-code the
message. To investigate how to re-code a message, there will now be a
presentation of Rouse's argument on how to present information. Rouse's "thesis
is that innovation can be enabled by understanding why people perceive (or do
not perceive) solutions to be viable, acceptable, and valid." (5) The driving
forces behind people's understandings are needs, beliefs, and perceptions. These
three forces can foster understanding, but only to a limited extent. "People’s
knowledge and the stated facts are not the sole determinants of perceptions.
People’s needs and beliefs affect what knowledge is gained, what facts are
sought, and how both are interpreted." (8) Therefore, these three forces can
also hamper understanding given that they can shape the input received so as to
contort the input in ways unintended. "People have a tendency to perceive what
they want to perceive. In other words, their a priori perceptions strongly
influence their a posterior perceptions." (15)
To overcome the restrictions that people have as a result of their needs,
beliefs, and perceptions, Rouse believes that "information can be modified so as
to show that the perceived negative consequences are not realistic." (99)
Therefore, Rouse believes that the information itself is innocuous. The problem
is that the target group often perceives information or a solution to an issue
incorrectly given their needs, beliefs, and perceptions. For Rouse, this
inconvenience can be side stepped by modifying the information in such a manner
so as to present the information such that it is in accordance with the person's
needs, beliefs, and perceptions.
The strength of Rouse's argument is that he provides tools for actually
carrying out change. The two weaknesses with Rouse's argument are: a
homogenous-receiving group and innocuous information and solutions. Rouse seems
to believe that the receiving group shares a common set of needs, beliefs, and
perceptions. Although this may be the case, the receiving group could share some
over-arching commonalities. The differences within the group may be such that
satisfying a portion of the group results in the complete upheaval of another
section. This duality--or even worse--would cause the change agent to modify the
information to appease the group in upheaval. The continual attempts in
appeasing sections of the target group could result in neither group believing
the change agent given the continual modifications of the same information in
order to please both groups. One could also imagine more than two subdivisions
in the target group thereby compounding the appeasement problem.
The second weakness with Rouse's argument is that he presumes that the
presented information is harmless to the group, because the group only perceives
harm. Rouse's failure to address this issue dismisses decentralization of
authority, local interests, local knowledge, or the ability of the members of a
distant community to understand and address their own problems on their own
terms. Rouse's method for overcoming resistance, while possibly successful,
could result in the change agent causing more harm than good.
Utilizing Rouse's method dictates that the user modifies the information, but
the modifier must understand the pitfalls of modifying the presented
information. If the presenter merely changes the story to fit the target of
conversion, then the whole task could "blow up" in the presenter's face.
However, if the presenter truly believes that the material presented is factual
and does not waiver to satisfy "constituents," then the endeavor to modify
information so as to appeal to the recipient could be successful.
The tools to draw upon
The question begging to be answered is: What can the promoter of employee
ownership present to policy makers and economic developers? The answer is
factual information that presents the economic successfulness of employee
ownership. First, according to a 1987 Government Accounting Office (GAO) study,
employee-owned firms that utilize employee-participation programs are 52% more
productive than firms that do not have such programs. Second, owners who are
also employees are anchored to a particular geographical location, which ensures
that the company does not relocate based on whims, tax abatements, or change in
economic environment. Third, capital flight, and the resultant unemployment, is
less likely to occur given that the firm is anchored to a particular locale.
Although these three items are seemingly quite simple, they could form the
beginning of an exhaustive list. Their focus, though, is what is important.
These items focus on economics. They accurately describe employee ownership and
would get the attention of a public developer or policy maker. The importance of
these economic tools is that the promoter has something tangible to hook the
target, and the target population has something tangible to latch onto.
To summarize, the promoters of employee ownership draw upon ineffective
points to promote their argument. Often time, promoters utilize democracy and
social justice in attempt to advance the utility of employee ownership. However,
the policy maker and economic developer maintain a focus on economic factors.
Therefore, when the two discuss employee ownership, then neither party
"understands" the other given that the two talk past each other. To overcome
this communication dilemma, the promoter can choose to modify the presented
information. The information must be modified into an economic argument that
will garner the attention of the economic developer and policy maker. Three
economic arguments are provided: productivity, anchoring of capital, and
employment.
Conclusion
Utilizing employee ownership is an important goal to pursue. However, the
pursuit of the goal is more efficient when the methods utilized are effective.
Drawing upon an economic argument is more effective than drawing upon a
democratic argument when the target population is policy makers and economic
developers in the government. However, the target population could be broadened
to include labor leaders, single-proprietors of businesses who wish to sell
their firms, investment firms that focus on employee ownership, or community
leaders who want to ensure the anchoring of capital in their jurisdiction. Just
remember, waiving the flag is not as effective as waiving the
dollar.