IntroductionEmployee participation in a firm's capital stock is one of the most important forms of financial participation. Stock option plans, stock bonus plans or direct accounts of a firm's shares are different kinds of employee ownership. Throughout this article we will refer to these kinds of financial participation as employee share ownership (ESO). Both academics and political actors have highlighted the significant benefits associated with ESO for employees, employers and the state (e.g., European Commission, 2014: Lampel, Bhalla, & Jha, 2012; Pendleton, Poutsma, van Ommeren, & Brewster, 2001). However, ESO still is not very common in Germany. For instance, according to most recent establishment data from Germany, in 2011 only 2 per cent of all employers provided ESO (Moller, 2013). These numbers remained stable throughout the last years (Czaya & Matiaske, 2017).Against this background, during the past two decades the body of literature on the prevalence of ESO and associated benefits has been constantly growing. Thereby, a common research approach is to estimate regression models of the incidence of an ESO scheme - i.e., the fact that a firm provides ESO - on a set of explanatory variables. However, empirical evidence is restricted by data availability, as such research typically uses data from secondary sources. Hence, these studies allow only indirect inferences about firms' aims through the provision of ESO. The following example illustrates this prevalent research approach. According to agency theory, monitoring costs increase with firm size. Larger firms are expected to adopt an ESO scheme with higher probability as compared to smaller firms, since the provision of ESO is supposed to contribute to an alignment of employees' with employers' interests and hence, will decrease monitoring costs. Thus, if research findings suggest a positive impact of firm size on ESO incidence, it can be inferred from this result that a firm's motivation to adopt an ESO scheme rests on the aim of reducing monitoring costs.However, this research approach has not remained uncriticised. As Ben-Ner and Jones (1995) put it already twenty years ago, Ignoring the reason for of an employee ownership scheme ... leads to confounding the effects of employee share ownership schemes with the reasons for their adoption (Ben-Ner & Jones, 1995, p. 552). Specifically, we see the following two shortcomings. Firstly, from a methodological point of view, measuring the motives of organisational decision makers through directly asking these individuals about their aims would imply higher validity as compared to inferring these aims from regression models. In general, without exploring individual reasoning, rational choice theories remain infallible (Popper, 1994), and the theoretically derived assumptions are rather speculative. Secondly, there is a logical gap concerning smaller firms, since the reasoning based on monitoring costs can only explain why larger firms more often than smaller firms provide ESO. In contrast, the question why smaller firms provide ESO - what actually happens - remains unanswered.Our research approach seeks to overcome these shortcomings. In line with extant literature, we investigate firms' aims through providing ESO. Yet different from previous studies we use primary data gathered through interviews with decision makers of firms that provide ESO. Furthermore, we take firm context into account, since firms may pursue different aims through ESO, according to certain firm characteristics such as size or legal form.Therewith we respond to a call by Poutsma, Blasi and Kruse (2012) for a more intense consideration of contextual factors that affect organisational decisions and for bringing agency back into our analyses of and diffusion (Poutsma et al., 2012, p. 1514). Within an exploratory approach we examine the aims that different kinds of firms pursue through ESO. …
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