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Employee ownership, and in particular its participatory culture, can give companies a competitive edge in the marketplace. Research shows that this only holds true, however, if workers firmly believe they are helping to lead the company.
A perfect case study is United Airlines' Employee Stock Ownership Plan (ESOP), launched in 1994 when United Airlines' workers bought a majority stake in the company.
ESOPs offer employees the opportunity to take ownership in their company, generally through stock options. This ownership should be broad-based, dispersed among employees at all levels, so the company has a workforce of employee-owners.
At first glance, United's ESOP was a success. Nearly 55 percent of United's shareholders (employees and stockholders) took part in the plan, (pilots, 46 percent; machinists, 37 percent; management and salaried employees, 16 percent). Management counted on employees' gradual acceptance of the new plan, which created the world's largest employee-owned company; managers began to...