Academy of Management workshop shows some faculty are finding creative ways to fill the gap
By Adria Scharf
With few exceptions, today’s business schools are failing to teach about employee ownership. Their lapse limits the expansion of shared-ownership models and it harms the American worker by limiting future business leaders’ exposure to an idea proven to significantly increase the wealth of working people and improve company performance.
There are exceptions among business and management schools. The Rutgers University’s School of Management and Labor Relations, the Beyster Institute at the Rady School of Business at University of California-San Diego, and the new Baker Center of Excellence for Employee Ownership and Business Transformation at Montgomery County Community College in Pennsylvania all have strong institutional commitments to teaching about employee ownership. But for the most part, at other institutions, individual faculty are on their own to decide whether and how to introduce the concept to their students.
Faculty Find Student Interest Growing, along with Teaching Materials
Fortunately, some professors are taking the lead; they’re intentionally integrating employee ownership into courses, and they’re doing so not only in offbeat elective classes but in core required classes. Many of these professors are finding that that the topic syncs well with and enriches business school courses including Strategy, Organizational Behavior, Accounting, Governance, Human Resources and Entrepreneurship. They’re discovering a well-organized body of curriculum content to assign, from videos to case studies, and they’re finding, consistently, that the topic of sharing ownership sparks genuine student interest.
Some faculty are intentionally integrating employee ownership into courses, and they’re doing so not only in offbeat elective classes but in core required classes.
A sampling of how business school faculty are teaching employee ownership in regular courses was on display at a workshop at the Annual Meeting of the Academy of Management this summer. The workshop, “Teaching Employee Share Ownership and Equity Compensation in the Contemporary Business School: New Tools and Considerations,” explored how diverse teaching faculty fit employee ownership into specific courses; how they situate the topic within larger questions and themes; and what specific films, case studies, readings, discussion questions or activities they use to engage students.
The Hook Matters
“The ‘hook’ is very important” for introducing the topic to undergraduates, said Saehee (Sam) Kang, assistant professor at the College of Business at Florida State University, who discusses employee ownership in his Introduction to Human Resource Management and Compensation courses.
He opens his lesson with a picture of beer bottles and asks students to guess what the bottles all share in common. Some guess “they’re microbrews,” others, “they’re ales.”
The correct answer, revealed on his next slide, is that they are all produced by (current or former) employee-owned breweries.
Dr. Kang then asks students to explain why these breweries might be employee owned and explores how employee ownership can be viewed in terms of economic and psychological human resource management theories. Lastly, he asks his students: “Why are employee-owned breweries not more prevalent?” The question stirs discussion of risk aversion, free riding, and more.
“Students like the topic of stock-based compensation because they want to have that as an employee,” Kang says. “Others like the topic because they think it’s related to economic democracy.”
A High Level of Interest
Ed Carberry, associate professor of management at University of Massachusetts, introduces employee ownership in two MBA courses, “Business and Its Environment” (a course often called “Business and Society”) and “Organizational Analysis and Skills” (which overlaps with “Organizational Behavior” courses).
Employee ownership connects to key concepts associated with both of these subject areas. In Business and Its Environment, Carberry encourages students to explore the idea of employees as stakeholders, what sharing ownership means for corporate governance, and the effects of employee ownership on inequality.
Students have a high level of interest in this topic [despite being] unaware of the prevalence and possibilities of employee ownership. It really connects to their values around social and economic justice.”–Ed Carberry, associate professor of management at University of Massachusetts-Boston
In Organizational Behavior courses, he links employee ownership to discussions about motivation, incentives, empowerment, and innovation.
In one class, Dr. Carberry contrasts poor working conditions at Amazon with practices in high-road employee-owned companies where employees are treated as valued stakeholders. With clips from the film We The Owners, students learn about employee ownership at (former ESOP) New Belgium Brewery, the solar worker cooperative Namaste, and DPR Construction.
They apply theories from human resource management and industrial and labor relations to the company examples. “Would you want to work for any of these companies?” he asks his students. Many of them would.
“What I’ve found at UMass, and I’ve been doing this for about 10 years,” he says, “is that students have a high level of interest in this topic [despite being] unaware of the prevalence and possibilities of employee ownership. But I find it really connects to their values around social and economic justice.”
Dr. Daphne Berry, associate professor at the Barney School of Business at University of Hartford, brings students to the Mondragon Federation of Worker Cooperatives in the Basque region of Spain during spring break, in a mini-course for credit. Visiting the world’s largest group of worker-owned cooperatives, which employs more than 75,000 people in several hundred companies, her students get exposure to an alternative, cooperative approach to doing business on a larger scale.
Dr. Berry also teaches employee ownership in her regular courses on management and organizational behavior and social enterprise with both undergraduates and graduate students. Her students compare case studies of Starbucks, WalMart, and Carris Reels (the Vermont-based highly participatory 100 percent ESOP company). She has them consider how ESOPs can work differently from traditional corporations. At the same time, she grounds the idea of ownership-sharing in early traditions dating back to the founding fathers of this country, assigning portions of the 2013 book The Citizen’s Share.
If education is meant to plant seeds for the future, then these business schools and faculty are pioneers in planting seeds to equip students to build a more equitable economy. Business schools in general have been slow to incorporate teaching about successful enterprises with equitable ownership structures. Students, however, are thirsty for knowledge about businesses with social purpose and alternative structures that drive more equitable economic outcomes; they benefit from having the opportunity to learn about the wide variety of tested approaches for building inclusive employee-owned businesses—from ESOPs to worker cooperatives.
Editor’s Note: We welcome responses from others teaching employee ownership in the nation’s business schools. See “For Business Graduate Students, Employee Ownership Is a Fabulous Career.”
Adria Scharf, PhD, is a Beyster Fellow and director of the Curriculum Library for Employee Ownership at the Institute for the Study of Employee Ownership and Profit Sharing at Rutgers University’s School of Management and Labor Relations.