Employee Stock Ownership Plans huwai
International Journal of Business and Management Invention
ISSN (Online): 2319 – 8028, ISSN (Print): 2319 – 801X
www.ijbmi.org Volume 2 Issue 8ǁ August. 2013ǁ PP.17-22
Employee Stock Ownership Plans and Their Effect on
Productivity: The Case of Huawei
Zhibiao Zhu1, James Hoffmire2, John Hoffmire3, Fusheng Wang4
1,3
Said Business School ,University of Oxford; 2 School of Business, University of
Wisconsin-Madision; 1,4 School of Management, Harbin Institute of Technology
ABSTRACT: Employee Stock Ownership Plans (ESOPs) are utilized by many successful companies across the world. This case study describes Huawei, a Chinese telecommunications equipment company, which heavily utilizes ESOP ownership, and applies Huawei’s results to describe ESOPs as a powerful tool for achieving corporate efficiency and growth. Using and analysis of Huawei’s annual reports, we argue that ESOPs play a positive role in enhancing employee productivity.
KEYWORDS: Employee ownership, Employee productivity, Huawei
I.
INTRODUCTION
The many successes of ESOP companies may largely be attributed to enhancement of employee productivity. These productivity effects are becoming increasingly noticed across the world. Research on the relation between ESOPs and productivity has attracted considerable attention.
Many studies have found that ESOPs or similar plans were associated with higher levels of productivity in US companies (Kumbhakar and Dunbar, 1993; Hallock et al., 2004; Robinson and Wilson,
2006; Sesil et al., 2007; Kramer, 2008; Kim and Ouimet, 2009). Jones and Kato (1995) used panel data to estimate production functions and reported the introduction of employee ownership on average led to a 4-5% increase in productivity in Japanese firms. Kruse et al. (2011) analyzed the effects of employee ownership, profit and gain sharing, and broad-based stock options (shared capitalism) on employee attitudes, turnover, and performance among applicants to the ―100 Best Companies to Work For in
ISSN (Online): 2319 – 8028, ISSN (Print): 2319 – 801X
www.ijbmi.org Volume 2 Issue 8ǁ August. 2013ǁ PP.17-22
Employee Stock Ownership Plans and Their Effect on
Productivity: The Case of Huawei
Zhibiao Zhu1, James Hoffmire2, John Hoffmire3, Fusheng Wang4
1,3
Said Business School ,University of Oxford; 2 School of Business, University of
Wisconsin-Madision; 1,4 School of Management, Harbin Institute of Technology
ABSTRACT: Employee Stock Ownership Plans (ESOPs) are utilized by many successful companies across the world. This case study describes Huawei, a Chinese telecommunications equipment company, which heavily utilizes ESOP ownership, and applies Huawei’s results to describe ESOPs as a powerful tool for achieving corporate efficiency and growth. Using and analysis of Huawei’s annual reports, we argue that ESOPs play a positive role in enhancing employee productivity.
KEYWORDS: Employee ownership, Employee productivity, Huawei
I.
INTRODUCTION
The many successes of ESOP companies may largely be attributed to enhancement of employee productivity. These productivity effects are becoming increasingly noticed across the world. Research on the relation between ESOPs and productivity has attracted considerable attention.
Many studies have found that ESOPs or similar plans were associated with higher levels of productivity in US companies (Kumbhakar and Dunbar, 1993; Hallock et al., 2004; Robinson and Wilson,
2006; Sesil et al., 2007; Kramer, 2008; Kim and Ouimet, 2009). Jones and Kato (1995) used panel data to estimate production functions and reported the introduction of employee ownership on average led to a 4-5% increase in productivity in Japanese firms. Kruse et al. (2011) analyzed the effects of employee ownership, profit and gain sharing, and broad-based stock options (shared capitalism) on employee attitudes, turnover, and performance among applicants to the ―100 Best Companies to Work For in