Question

See under question "C" to see the context. Thank you! (Answer questions)

A) Write about whether or not you believe productivity would go up, down, or stay the same in an enterprise where the workers are owners versus a traditional workplace.

B) Write about whether or not a worker owned enterprise would need as many managers to monitor employees and what effect this would have on costs and competitiveness in the marketplace.

C) Write about some of the deleterious effects of modern corporations such as pollution, worker degradation, income inequality, etc., and analyze whether or not worker ownership would solve, worsen, or leave unchanged any of the problems that are associated with traditional workplaces.

Watch the following PBS Newshour video that details the New Belgium Brewery Company which is owned by its workers:

You have to watch a video. Due to Chegg's ToS, I cannot provide the link. It's here is the full transcript of the short video:

• JUDY WOODRUFF:

  But, first, let's look at an unusual way of running a business, by having your employees own the company. One popular craft brewery has made a name for itself in part by going that route, with strong results so far.

  Economics correspondent Paul Solman has the story. It's part of our weekly series Making Sense, which airs every Thursday on the "NewsHour."

• PAUL SOLMAN:

  New Belgium Brewing, known for its quirky culture and Fat Tire, its Belgian brew. This is its notorious Tour de Fat, a beer-financed travel-fest pushing bicycles over cars.

  At company headquarters in Fort Collins, Colorado, co-founder Kim Jordan loves to show off the suds themselves.

• KIM JORDAN, Co-Founder, New Belgium Brewing:

  Should I show you how to do the perfect pour?

• PAUL SOLMAN:

  The perfect pour, yes.

• KIM JORDAN:

  OK.

• PAUL SOLMAN:

  A little bit out. Whoops. Oh, I — no, no, I screwed it up already.

• KIM JORDAN:

  Yes. Yes.

• PAUL SOLMAN:

  Oh, this is a perfectly…

• KIM JORDAN:

  Yes. Well…

• PAUL SOLMAN:

  This is a perfectly horrible pour.

  But what drew us here wasn't the beer, though New Belgium now sells 4 percent of all U.S. craft beer, 1 percent of all the beer in America. New Belgium's distinction, however, as a business is that it is entirely owned by its workers.

  Ex-New Yorker Doug Miller has been at New Belgium for 20 years. Like most Americans, he had no stake in the firms he worked for in his early days back East.

• DOUG MILLER, Warehouse Technician, New Belgium Brewing:

  It's a job and you're just coming in and you're punching the clock and you're doing your job. Here, you just do it more because you're working for yourself. Like, I don't work for New Belgium. I am working for Doug Miller. I am working for people who work here. That's the difference.

• KIM JORDAN:

  Beer is malt, and hops, and yeast, and water.

• PAUL SOLMAN:

  And why did co-founder and CEO Kim Jordan sell the company to her workers, as opposed to a well-heeled rival or a private financial firm?

• KIM JORDAN:

  One of things that we think is a big societal issue is this widening gap between the haves and the have-nots. And we realized that we had an opportunity to support people owning something that was increasing in value. Shared equity has been an incredibly powerful engine for us.

• CHRIS MACKIN, Partner, American Working Capital:

  New Belgium's a great example of using this structure to preserve a legacy.

• PAUL SOLMAN:

  Worker ownership consultant Chris Mackin, who's advised New Belgium.

• CHRIS MACKIN:

  For a company like that to be consumed by a multinational firm, and to lose its identity, to lose what's special about it in order to make a few extra bucks, that's not what Kim Jordan was going to do.

• KIM JORDAN:

  You will notice on your glass here, see this lacing? That's actually a sign of a well-made beer.

• PAUL SOLMAN:

  So, the founder became a poster child for worker ownership, initiating an ESOP, an employee stock ownership plan, which began giving stock gradually to its workers and ended up in a 100 percent takeover.

• CHRIS MACKIN:

  What she's done has made it possible to reserve that independence and to be able to reward the people who made her a wealthy woman.

• PAUL SOLMAN:

  Reward them with shares they sell back to the company when they retire, a stock-based pension plan. ESOPs represent both ownership and retirement savings, which is why Congress made them the only pension plans allowed to borrow money for funding.

• KIM JORDAN:

  We were so excited to brew this beer that we decided to put it on tap today.

• PAUL SOLMAN:

  New Belgium, with a host of varieties, is now the eighth largest brewery in America. Its fans flow through the building on tours all the day long.

• KIM JORDAN:

  How do you pour a beer? I will show you how. And then the taps are yours, OK?

• PAUL SOLMAN:

  The employees seem, well, pretty juiced themselves.

• CARRIE WEADY, Graphic Designer, New Belgium Brewing:

  I feel like I have a stake in what happens here and that I have a — play a part in making this awesome place successful, yes.

• PAUL SOLMAN:

  Tiffany Banfield works in the marketing department for New Belgium.

• CARRIE WEADY:

  So you liked it where it was?

• PAUL SOLMAN:

  Carrie Weady is a graphic designer.

• CARRIE WEADY:

  The better I do, the better we do, and I personally take that to every day of my job, and it really does inspire us all to go above and beyond in a way that I haven't experienced at other employers.

• PAUL SOLMAN:

  So, why doesn't everybody do it?

• WOMAN:

  Because they don't believe that it is a profitable model.

• PAUL SOLMAN:

  But it is, Kim Jordan insists, if management puts in the effort and is willing to empower workers in a variety of ways.

• KIM JORDAN:

  We're more profitable than our industry standards. We have a 3 percent turnover rate. And more importantly to us is our feeling of our engagement with our co-workers.

• WOMAN:

  Each of those cities brought some pretty great incentives to the table.

• PAUL SOLMAN:

  A key feature of New Belgium's worker engagement: open-book management, teaching every employee how to read the books.

• DOUG MILLER:

  And so they had classes for us to go to. Like, we're going to teach you how to read an income statement, how to read a balance sheet, how to understand cash flow, all those things.

• PAUL SOLMAN:

  The upshot? The workers know exactly how the company is doing financially, and how they are doing as well.

• DOUG MILLER:

  So, I am making like the same money now that I was making 20 years ago, when I was working in the Bronx in New York City. But I have more money now. It's just because I can manage it better. That's the thing that blows me away, is that you can be making $30,000, $40,000, $50,000 a year and live in a $300,000 house if you manage your money well.

  Are you operating at a profit this month? You know, that's what you got to ask yourself.

• PAUL SOLMAN:

  To Chris Mackin, who's been pushing worker ownership since the 1980s, ESOPs are a no-brainer, the main and obvious obstacle, workers don't have the money to buy their businesses.

• CHRIS MACKIN:

  For this idea to go to scale, you have to find some way in which working people who don't have assets can acquire companies that are worth value.

• PAUL SOLMAN:

  So, Mackin has started an investment fund that will allow worker groups to compete with private equity firms and well-heeled competitors when an owner wants or needs to sell.

• KIM JORDAN:

  The other beer that we make is called Felix, and that's the one that we get to taste today.

• PAUL SOLMAN:

  Happily for its workers, New Belgium didn't need Mackin's money. A bank ponied up much of the cash to buy Kim Jordan's stock. She financed the rest by accepting IOUs from the company, to be paid off from future profits. The risk, that the company will flounder, meaning lower pensions for workers and iffy IOUs for lenders, which suggests that it might take an unusually committed owner to make worker ownership happen.

  So, why did Jordan take the chance?

• KIM JORDAN:

  One of the things that has been really fun about business is understanding that you can choose what you do with profits. You get this one life, right? And you get to think about, what am I going to do that makes me sort of joyful and sing? And this makes me joyful.

• PAUL SOLMAN:

  Fortunately for her, Kim Jordan's IOUs look like a pretty safe bet. New Belgium is slated to open a new operation in North Carolina in 2016. And since it's only in 38 states thus far, the beer may be coming soon to a state near you.

• KIM JORDAN:

  And push in now.

• PAUL SOLMAN:

  And it will stop it right there. OK.

• KIM JORDAN:

  You are very close to a perfect pour there.

• PAUL SOLMAN:

  For the PBS NewsHour, this is economics correspondent Paul Solman, long an enthusiast of worker ownership, but only recently of the perfect pour.

• KIM JORDAN:

  Cheers.

• PAUL SOLMAN:

  Cheers.

Answer 1

A) When the workers are owners, productivity would definitely go up. This is because, workers would have a sense of ownership in the firm, their opinions and decisions are being balued. They get to realize that whatever they are earning more by putting extra efforts would ultimately come to them and thus they put extra efforts and work for higher level of productivity. This is overcoming the conflict between owners and managers. If owners and managers are the same, they aim for profit maximization which would come to them in the form of higher value of ESOP's as well as Sales Revenue Maximization, which would improve the prestige, status and brand value of the company. Owners get to share the profits at the end of the year and thus aim for higher level of profits and managers perk, salary, incentives and bank finance depend on sales revenue maximization and thus aim for the same. In a firm like New Belgium Brewery Company, where the owners and managers are the same, such conflicts are not there and everyone aim for improving the productivity of the company.

B) In a firm where the owners are different from managers, the manager's supervision is required because the workers generally shy away from their responsibility and do not give their 100%. They assume that inspite of putting their 1005, they will not get the desired results and the entire profit goes to the owners only at the end of the day. But if the owners and the managers are the same, they do not require any external supervision or monitoring. They are self motivated internally only that they put their 100% to get the best desired result. They know very well that whatever results they get, it would ultimately come them in the form of profit sharing. Thus they do not require any external monitoring and are self motivated.

As a result of this , the firm would become even more competitive and aim for higher goals compared to competitors. There is 100% commitment extended by the workers. As there is no requirements of managers to supervise them externally, so the cost incurred would also be less comparatively.

C) Worker owned firm is more responsible and concerned towards the society, fellow workers compensation, equality and overall profitability of the firm. So at the time of deciding any new policy or compensation related plan, the opinion of the fellow workers are being taken and their 100% participation is expected. So the issues like concerns towards the society, worker inequality and pollution can be dealt appropriately and promptly in the worker owned firm.