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Measuring performance: differences between capitalist and labour‐owned enterprises

Author

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  • Zuray Melgarejo
  • Francisco J. Arcelus
  • Katrin Simon

Abstract

Purpose - The purpose of this paper is to test whether performance differences between labour‐managed (LOFs) and mercantile (PCFs) firms are due to the measures used in the comparison, rather than to their distinct capital‐ownership configurations. Design/methodology/approach - Tests for the equality of two means and two variances of a variety of performance measures were used to ascertain whether differences between LOFs and PCFs firms are due to the measures used in the comparison, rather than to their distinct capital‐ownership configurations Findings - The indicators analyzed do not provide either type of organizational structure a definite superiority in either short‐economic performance or in short‐term profitability and the profitability indicators assign as good a chance of survival to LOFs as to PCFs of similar size, even if the analysis of their respective debt structures indicates some clear limitations on their growth prospects. Practical implications - The paper stresses the importance of using proper measures of the performance of LOFs, to avoid a common practice of being short‐changed in their evaluation of their economic performance, profitability, return of labour and financial structure. Originality/value - The study will be useful to the worker‐owners of the LOFs and to those evaluating their performance, such as lenders, regulators, other public officials and the like.

Suggested Citation

  • Zuray Melgarejo & Francisco J. Arcelus & Katrin Simon, 2007. "Measuring performance: differences between capitalist and labour‐owned enterprises," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 34(7), pages 485-501, June.
    • Handle: RePEc:eme:ijsepp:v:34:y:2007:i:7:p:485-501
    DOI: 10.1108/03068290710760254
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    References listed on IDEAS

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    1. Craig, Ben & Pencavel, John, 1992. "The Behavior of Worker Cooperatives: The Plywood Companies of the Pacific Northwest," American Economic Review, American Economic Association, vol. 82(5), pages 1083-1105, December.
    2. Bonin, John P & Jones, Derek C & Putterman, Louis, 1993. "Theoretical and Empirical Studies of Producer Cooperatives: Will Ever the Twain Meet?," Journal of Economic Literature, American Economic Association, vol. 31(3), pages 1290-1320, September.
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    Cited by:

    1. Josefina Fernández-Guadaño, 2014. "Employee-owned and capitalist firms: is performance linked to ownership?," Service Business, Springer;Pan-Pacific Business Association, vol. 8(4), pages 541-558, December.
    2. Maria Bastida & Luisa Helena Pinto & Ana Olveira Blanco & Maite Cancelo, 2020. "Female Entrepreneurship: Can Cooperatives Contribute to Overcoming the Gender Gap? A Spanish First Step to Equality," Sustainability, MDPI, vol. 12(6), pages 1-17, March.

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