A research study submitted in partial fulfillment of the requirements for the degree of Master of Engineering, School of Engineering and Technology

Research Studies Project Report (M. Eng.) - Asian Institute of Technology, 1984

This study attempts to find whether a worker owned organization would be viable or not. The existing views about these organizations are controversial. A model was dev eloped to observe the behaviour of worker run organization as compared to the behaviour of the capitalist owned organization with respect to changing market conditions. Th differences in the labour acquisition policies between the two types of organizations show that the worer run organization may not fare well as compared with the capitalist organization. However this difference represents only a limited view of the behavioural differences between the two. Owner-workers, might work harder during the changing market conditions than wage workers in a capitalist owned organization. This difference was included in the model to observe the behaviour of the two organization. The two types of organizations differ also in their response to the surplus capital and labour. The capitals organizations might quickly scrap the capital and layoff the labour while the worker run organizations may continue to use these resources for production purpose. When these differences are incorporated in the model, it is observed that the behaviour of two types of organizations become almost identical. It seems that worker run organizations are dubbed inefficient, more because of the limited models explaining their working than because of their actual potential. This type of organization presents an interesting model for the developing countries as it may have positive employment and income distribution effects and should be explored further.