Purpose The purpose of this paper is to draw out analytical and conceptual lessons from the past three-quarters of a century of experience with employee ownership to examine what works and what does not work – with a focus on the most recent generation of employee ownership. Design/methodology/approach The analysis describes embedded and flawed legal design features of certain approaches to employee ownership that will likely contribute to a dissolution of employee ownership within a generation – like a mule that cannot reproduce itself. This paper also proposes a conceptual and now legislated model of a democratic firm as a basis to criticize some models of workplace democracy. Findings The analysis finds that the usual standard models, from direct share ownership (e.g. the plywood coops or the Spanish SLs) to the US ESOPs, and finally the UK EOTs, have built-in sell-out tendencies. The findings are empirical in the case of the plywood coops, Spanish SLs and US ESOPs, and are predicted in the case of the relatively new UK EOTs. Research limitations/implications Much of the paper is about mule-firm tendencies of some models of employee ownership. Practical implications The application of the analysis to the UK EOTs after a generation is a prediction. Now, it is too soon to tell. Social implications We don’t need more failed models to verify sceptics’ claim that “employee ownership doesn't last long.” Originality/value This is an ongoing debate in employee ownership circles. Some arguments are new and some are older points that have yet to take hold despite evidence of their importance. Finally, the new Slovene legislation of the Coop–ESOP is described, which attempts to offer solutions to the major criticisms given in the paper of the prior models.
David Ellerman (Wed,) studied this question.