Trevor Young-Hyman, Assistant Professor of Business Administration and Sociology
PhD in Sociology, University of Wisconsin-Madison
Why did you decide to set out on this research topic?
I am interested in the ways that businesses pursue complex and, sometimes, competing goals, like financial performance and community welfare. One way to do this is to design ownership and governance structures where the interests of different stakeholder groups are represented. But, while these types of organizational structures can serve important benefits, they can also be costly, slow, and ineffective. In my research, I try to understand how to effectively design these structures, and the antecedents and consequences of their creation.
What were your key findings?
In the Organization Science paper, we seek to understand how extending governance and ownership rights to workers shapes financial and social outcomes.
To that end, we examine firms in France that shift from private investor ownership to a worker cooperative structure, where workers participate in the ownership and governance of the firm. We leverage a large sample of French tax data to compare pairs of similar firms, one of which switched to the worker cooperative structure, on both productivity and wage distributions.
Remarkably, we find that, particularly for firms in more knowledge-intensive industries, expanding rights to workers both improves firm productivity and reduces wage inequality. One particularly interesting finding in the paper is that, while the highest-paid workers in worker cooperatives are paid less than their peers in conventional firms, they are less likely to leave the firm. We think that the non-monetary rewards of working in these types of firms may contribute to this outcome.
How do the findings of your research contribute to your field?
Our findings challenge the commonly held notion that the interests of workers and those of investors are broadly in competition. However, to align those interests, it requires both the right governance structure and the right industry context.
The right governance structure balances the prioritization of those interests, and the right industry context creates an opportunity to translate increased worker motivation and engagement into substantial productivity benefits for the firm.
How do your research findings contribute to society (locally, regionally, nationally, globally)?
Our findings offer managers and policymakers insights about how to build companies and economies that are both profitable and equitable. Our findings suggest that managers of firms that empower workers should prioritize areas of business that maximally leverage worker knowledge and creativity.
Concerning policy, our research suggests that local and regional innovation efforts should incorporate worker ownership and governance into startup and business development initiatives to build an economy that is both dynamic and beneficial to communities.
Aside from your research, what is the most exciting advancement in your field right now?
The role of businesses as societal actors and community members is a central issue in contemporary management scholarship, with expanding research on corporate purpose, stakeholder governance, and the relationship between business and democracy.
Is this research published anywhere yet? If so, please share a link.
This research was published in Organization Science in 2023 and continues in a number of working papers.