Purpose – The purpose of this paper is to explore employee participation in ownership and control in a modern corporation and its impacts on intra-organizational social capital and workplace dynamics. Design/methodology/approach – Using the National Bureau of Economic Research Shared Capitalism Survey, it explores the varieties of organizational governance and tests the effects of shared capitalist programs and policies via multivariate regression analyses. Findings – It presents empirical support for the main working hypothesis that employee participation in ownership and control enhances worker trust for the firm, which in turn promotes commitment to performance and innovation at workplace. Practical implications – The empirical findings here imply that scaling worker participation can enhance productivity potentials of a firm. Originality/value – Above all, this paper takes a look at shared capitalism and workplace participation in decision making through the lens of social capital.

Introduction

This research project is to explore participatory organizational governance in a modern corporation and its implications. There are two avenues in which employees can engage with their firms: first, financial participation such as employee ownership, profit/gain sharing, broad-based stock options and any other form of equity and profit distribution; and second, participation in decision-making processes such as employee involvement (EI) on the board or participation in deciding work rules on the shop floor. In other words, employees can participate in either ownership or management of a firm they work for. For this research project, we follow the footsteps of economic sociologists to envision a firm as an economic organization embedded in social structure. One of the foremost functions of a firm in the market is, of course, to produce profits. However, at the same time, people interact with one another at their workplaces in both tasks and social relationships. Tasks and roles often create inter-personal, inter-unit or inter-department relationships; social relationships in turn create opportunities for collaboration or conflict that might have not been imagined or conceived before. In that sense, a firm is a space of social mechanisms and potentials. We hereby regard a firm as socially embedded and constructed, especially within and across “ongoing social relations” (Granovetter, 1985), and thus take a look at the relationship between social and economic elements in its life and beyond. More specifically, this paper takes issue with the structure of corporate ownership and control in today’s world and explores the viability of an alternative model of capitalism with employee-engaging industrial programs and policies. We will take a look at the effects of shared capitalist compensation practices and participatory management on the formation of social capital within a firm and its impact on workplace commitment.