Ninety percent of Japan's publicly traded firms provide mechanisms for employees to buy company stock. First, where employee ownership has been around long enough to study, especially in the U.S., data show a strong positive relationship with corporate performance when these plans are tied to a participative management philosophy. More and more companies are concluding that sharing ownership and broader decision making with employees makes good economic sense. Second, the privatization of state owned enterprises is more politically palatable if employees are included as owners. Finally, while socialism has clearly failed as an efficient means of production, capitalism has done poorly in distributing the fruits of its productivity.
Employee ownership presents an appealing third way.
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