Alternative Forms of Productive Enterprise
The literature of industrial economics is overwhelmingly addressed to the behaviour of privately owned firms, which are assumed to choose level of inputs and output so as to maximise profits. In most Western economies there is however a small but rapidly growing sector of labour-managed and participatory firms, owned and controlled in various ways and to varying degrees by workers. The behaviour and performance of such firms may be expected to differ from that of the traditional firm. Research has concentrated on output and employment decisions, x-inefficiency issues and financial questions. Interestingly, theoretical attention has concentrated on price responsiveness, an area in which labour-managed firms are alleged to perform poorly, while empirical work has been primarily directed to investigating productivity differentials, an area in which such organisations appear to do well (see Ireland and Law, 1982; Bonin and Putterman, 1987 for surveys).
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