Worker Buyouts in Canada: A Social Networking Analysis

This paper presents a four-step theory for predicting the occurrence of worker buyouts. The theory is developed from an analysis of thirty-nine worker buyouts in Canada and from a review of studies of worker buyouts in Western Europe and the US. The theory is based upon a sequence, the key component of which is the presence of a facilitative social network. Therefore, we refer to our approach as social networking theory. The steps in the sequence are as follows. (1) Enabling conditions: It is proposed that the economic and social conditions, cultural traditions and the inclinations of key leaders lead to the creation of a social network to support worker buyouts. (2) Social networks: Worker buyouts in Canada are clustered in regions, and the strength of a social network within a region is the critical factor in determining whether worker buyouts will occur. Social networks are conceived of as offering varying degrees of support for worker buyouts. Networks may also be oppositional. The support for worker buyouts, therefore, may be conceived of as the strength of facilitative networks relative to oppositional networks. (3) The particular case: Although the net strength of a social network is the critical component in predicting whether worker buyouts will occur in a context, the circumstances in any one case are of importance in predicting any particular buyout. In other words, without a supportive network, it is unlikely that worker buyouts will occur. But supportive networks are only a general prerequisite which interacts with the circumstances surrounding a particular plant. (4) Social efficacy: The success of worker buyouts affects the strength of supportive networks and inclinations of workers in a particular plant.