EOnation: How not to let employees get carried away

["Steve Nieman, President" <haceca@attbi.com>]

Hello Mr. Heller, nice to make your virtual acquaintance:

 

I have taken the liberty to reply to your email with a simultaneous posting to COG's EOnation.

 

One of many paradoxes of ESOPs is that some employees lose their spatial reference to customers and investors and think that only the employees matter. "Mine" is of course always relative, particularly in for-profit publicly-traded corporations.

 

You are right: From my experiences, some ESOPs can get carried away with focusing only on employee issues. Which is a mistake. Obviously, employees can't do only what they want to do. Part of management's immense job is to ensure balance. But when management teams are not in an accountable relationship with the tripartite--management just signs off on what may make them the most money--which may have been one factor in UAL's current demise.

 

That's why, to me, a more collective approach to ownership, particularly in "utility type" industries such as airlines, electrical companies, etc. with healthy competition and clearly delineated customers and shareholders, is the best way to proceed.

 

If you happened to read David Wheatcroft's (Cheerios, David) recent posting, he wrote: "One model we use is a hybrid that accommodates both ideas. In this model expect at least 51% to be owned collectively and democratically controlled, while the other 49% would be available for individuals to own and therefore encouraging incentives.
 
"As a matter of fact the huge retail coops in the UK which have always had a traditional collective ownership structure are now looking at this model to romaine competitive as the other large retail stores like Tesco and Asda (wallmart) give their employees the chance to own shares."

 

This is a good approach and we are trying to convince the people in power in management and our unions at Alaska/Horizon to move in this direction. That 49 percent that is not owned by the employee/customer stock ownership plans would be out there for investors to "get in on the action," which would help keep the stock price reality-based yet healthy.

 

Unfortunately, elitist groups in both management and organized labor vested in the current power/wage-slavery economic system resist this movement. We may need a few more healthy bankruptcies in the U.S. and Europe for people to wake up before they can sleep in--no job to get up for.

 

 

----- Original Message -----

From: "Frank Heller" <heller@tavinstitute.org>

To: "Steve Nieman, President" <haceca@attbi.com>

Sent: Tuesday, October 29, 2002 7:49 AM

Subject: Re: EOnation: Ownership sharing by as many as possible

> Dear Steve Nieman
> 
What you say about United Airline's failures to give high priority to 
> 
customers reminds me of our experience in some Jugoslave 
> enterprises 
under 'Self Management'. That was some time ago but 
> is still relevant. 
Under Self Management, the employees owned the 
> company and an assembley 
of workers could take ALL decisions 
> relating to the enterprise. We 
studied hotels and their airline. In 
> both cases there was a noticable 
tendency to concentrate on 
> internal issues and to pay little attention 
to the customer. How 
> does one overcome this?
> Sincerely,
> 
Frank Heller
> Dr Frank Heller
> Director,Centre for Decision Making 
Studies 
> The Tavistock Institute
> 30 Tabernacle Street
> 
LONDON EC2A 4UE
> Tel: +44 (0)207 417 0407
> Fax: +44 (0)207 417 
0566
> Email: heller@tavinstitute.org
>