The performance of employee buy-out: The case of Algeria

Abstract

Abstract The aim of this article is to show how, in a developing country, employees can improve the performance of their companies. Its objective is to verify the extent to which employee buyers of privatized companies can take up the challenge to succeed in their enterprise. This change takes place both during the crucial start-up business phase and the change from the public to the private sector in a constraining environment (no fiscal or entrepreneurial accompaniment, difficulty of access to bank credits, disloyal market, buyers untrained in shareholding, etc.). In contrast, in developed countries, the financial and fiscal environment plays an important role in the success of this type of operation. Out of 73 employee buy-outs (EBOs), we targeted 59 EBOs implanted in Algeria. The study found that the first third of these EBOs were closed and/or sold to third parties, the second third were in difficulty and the last third had achieved a remarkable growth in their economic and financial performance during the first five years. The results of this research indicate that, in a binding and complex system, entrepreneurial management can guarantee improvement in economic and financial performance on the one side and job satisfaction of employees on the other.