Employee Ownership in Russia: Evolution and Current Status

Abstract

Abstract Purpose The purpose of this article is to analyze the present state of employee ownership in Russia and reasons for its decline due to the drawbacks of economic reforms on the country. Design/methodology/approach The design of the article includes the analysis of the Russian model of ESOP and its differences from the U.S. analog. The author also describes the practical experience of the Russian people’s enterprises and the drawbacks in the legal foundations of their work. Findings The key finding of this work is that the correction of these drawbacks would lead to broader development of employee owned companies in Russia. Social implications The author’s ideas of changing focus of the market reforms in Russia and facilitating the development of economic democracy in the country constitute the major social implication of her research. Practical implications It may have practical implications both for developed market economies and economies in transition. Originality/value The originality of the paper is determined by drawing a logical link between the development of employee ownership and overall market reform in Russia, as well as by presenting a comparative analysis of the U.S. and Russian models of ESOP.