Codetermination and the modern theory of the firm: a property-rights analysis

Article Abstract:

Codetermination refers to the practice of treating a firm's workers as equity holders who are entitled to control and income rights in the firm. State-sponsored codetermination programs have become increasingly important and are now common in Western Europe. The property rights structure that a co-determined firm needs in order to be efficient is examined. The conditions under which the co-determined organizational form is likely to emerge on a voluntary basis are analyzed. The voluntary variant of codetermination is shown to be superior to the legally mandated form of codetermination, because voluntary codetermination results in more productivity-enhancing incentives, lower transaction costs, and rational allocation of risk.

Labor productivity

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Labor participation in corporate policy-making decisions: West Germany's experience with co-determination

Article Abstract:

West Germany's Codetermination Act of 1976 has done little or nothing to change the behavior of the companies to which it applies. The Act stipulates greater employee participation in management decisions of all kinds. It had been assumed that this would fundamentally change the operations, goals, productivity, and financial positions of affected firms. Employees generally had either a disinterested attitude or one at least as conservative as management, if not more so.

Analysis, Economic aspects, West Germany, Germany, West

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'Stuff the suggestions box'

Article Abstract:

The article describes the history of employee suggestion boxes and examines ways in which corporate managers can most effectively utilize employees' ideas. Issues include the contribution of Japanese management style and the importance for management not merely to pay lip service to employee participation programs.

United States, Management research, Employee suggestions

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