Employee stock ownership plans and organizational integration among workers in the People's Republic of China

• Published in: Human resource management review 2003, Vol.13 (3), p.407-421
• Main Author: Chiu, Warren C.K
• Format: Article
• Language: English
• Subjects: Chinese enterprises; Employee attitude; Employee stock ownership plans; ESOP; Organizational behavior; Organizational integration; Public enterprise; Studies
• ISSN: 1053-4822; 1873-7889
• DOI: 10.1016/S1053-4822(03)00043-3

The introduction of stockholding systems to Chinese state enterprises has stirred up much heated debate on the possibility of a redefinition of ownership among workers. It is hoped that through employee stock ownership plans (ESOP), workers' sense of ownership will be enhanced rather than undermined. This article provides a theoretical model to describe the process through which workers' integration with the enterprise may be affected. The model holds that institutional elements differ in various economic structures and that they will have an impact on workers' work attitudes. To the extent that workers exercise control over the firms and benefit from the ownership scheme instituted, they would experience a strong sense of ownership. Ironically, to some degree, workers relinquish their control over firms in order to benefit as owners in a tangible way under the new system. It is argued that the sense of ownership on the basis of material gain alone cannot survive times of financial difficulties while true organizational integration stands the test of hardship. Chinese enterprises should provide effective channels for participation, aimed at building a partnership among stakeholders including the workers.