- Email: [email protected]
On the incidence of profit and equity sharing
Journal of Econo
avior a
bwio
5-58.
46
SC Smith, On the incidence of profit and equity sharing
S.C. Smith, On the incr
47
48
S.C. Smith, On the incidence of proJit and equity sharing
S.C. Smith, On the ~m$iknce .?f
in high Qech fims.
role of specific human capital formation fifKIS.
49
En some eases an individual or
and e~t~e~~e~e~ria~ mobility
in wo~~e~-owned service
50
S.C. Smith, On the incidence of profit and equity sharing
workers participate in a ‘corporate culture’ [Deal and Kennedy (1982)], and responding to the values and social rewards of that culture, in which innovation may play an important part, yields meaning and afftrmation to the employee. But to whai extent does economic and organizational theory contribute to an understanding of the problem? Share contracts provide useful incentives wherever monitoring the activity reqluires doing the activity [Al&an and Demsetz (1972)]. In leading sectors omy, innovation is essential; and firms must design incentives both to encourage innovation and to ensure that innovators remain with the firm rather than develop their concepts on their own. Especially in the high tech sector, the economies of scale in innovation predicted by Schumpeter, Galbraith and others do not hold rigidly? And although it is more costly to bring a product to the market stage due to large capital requirements, the emergence of a more complete venture capi@ market and opportunities for joint ventures in the technology field between small innovators and large marketers provides innovators with considerable bargaining power. Thus, beyond general profit and equity sharing arrangements, we may expect high tech firms to have targetted arrangements for one or a team of innovators to share in the fruits of their innovation. The firm would not have to share as much as the present value of expected returns to the innovators from developing the product in a start-up firm, if the innovators were averse to risk. With assurance of a ‘reservation bonus’ being paid, there will be cases where innovative employees at the early stages of a major innovation will stay with the firm, leaving both parties with higher expected utility. Iiowever, we may not expect such arrangements to be viable in all cases. Arrow(1983) examines the ‘information degradation problem’ at the boundary between the firm and capital markets. Within the firm, Arrow points out, an employee may gain by misrepresenting the importance of an innovative concept. The employee could hold a different job by the time the innovation can be adequately tested; and in a stochastic environment, ‘that a project failed by no means proves that it should not have been undertaken’. This analysis has a c ‘al implication for what we view as a ‘lemons’ problem within the firm. the ‘best’ innovation concepts, i.e., those with a relatively high expected return and low risk, are those most likely to be en out of the firm by employees in an entrepreneurial fashion, then those tial projects remaining within the firm will be of lower expted value. er, it may simply be difficult to communicate effectively the true *In addition to the large numbers of small, innovative, entrepreneurial firms found in Silicon Valley, the Boston area and elsewhere, there is some evidence that even in very large firms, research and development breakthroughs often emerge from small, self-organized teams of 10 or less operatiug on a shoestring budget. A discussion of the r,~ so-called ‘skunk works’ is found in Peters and Waterman (1982). ‘The ‘lemons’ term was coined by Akerlof (!971), who examined inefftciencies in a market for goods of uncertain quality.
SC Smith, On the incidence of profit and equity sharing
51
importance of an innovation concept at early stages of development, if we are to believe many of the more successfulhigh tech entrepreneurs who claim to have acted on ‘hunches’. here are many cases, then, when a start-up will be the optimal response. F I outside financing till not b possible, if the innovators cannot convince even their former firm of the value of the project. Among the risk-averse founders at least, we may expect an equity sharing arrangement; and we may anticipate that they would wish to reduce their risk further by offering a share contract to new employees (likely including profit or revenue sharing in response to risks of period by period income shocks). On the employee side, working for a start-up, which has a high failure probability, and lower odds of becoming a major corporation, entails risks. Given, fixed wages compensating for these risks may add so much front cost to the firm as to make it uncompetitive. The only answer would appear to be some form of risk-sharing, lowering initial costs to the firm but promising yery large rewards to employees if the firm is successful. A welldesigned inmntive system including eqtity sharing may induce effort and innovative ‘behaviorresuiting in profits to be later shared with employees. 2.4. Firm size and the share contract
There are some a priori reasons to expect the size of the firm to affect the type of share contract [Al&an and Demsetz (1972)]. Employees in a noncooperative game, realizing that they receive only a fractional share of their marginal product, would in the absence of adequate effort enforcement undersupply effort. A cooperative game outcome is harder to ensure as the number of players gets larger. In the multidivisional firm, conflicts may emerge over appropriate transfer prices and, hence, the level of profits to be shared in the various divisions. However, the ultimate size of the parent firm is not the only or even necessarily the key predictor of the effectiveness of profit sharing. The capacity of the company to separate the value of the activities of its various divisions is the relevant determinant of the viability of a share arrangement. The firm will encounter transaction and bargaining costs in setting up and metering a team-based share contract, and in some cases these costs may outweigh the net productivity benefits of the contract. To the extent that there are economies of scale in administering such compensation schemes, we might anticipate lower incidence in the smallest firms. Further, risk sharing may put upward pressure on the size of a share firm, since founders’ aldcl later employees’ individual risk will be lowered in proportion to the number of risk sharers. In sum, firm size may influence the incidence of profit and equity sharing, though we may not say a priori in which direction. ut the theory suggests
52
SC. Smith, On the incidence of projit and equity sharing
S.C. Smith, 4)n the inci
ui0 y sharing
t 2 2 2 13 3 8 1 1 5 5 57
TOtd 7 3 3 2 2 9 13 3 4 13 0
cal reason for coding ‘ambiguous’ was a comment to the effect that a alarming stages’, oh ‘being implemente8.
53
54
S.C. Smith, On the incidence of profit and equity sharing
incentives. Combined, 31 of the 57 firms reported a currently operating program for general and for targetted profit sharing. Stock option plans of some type were reported by 47 out of 57 firms responding, or 83%. Four others are planning to introduce the are not striking in themselves; 92% of the Fortune 200 fi options for key executives [Cook (198(I)]. What is striking is that many of the reported plans extend to a large number of employees, though this is believed rare in the economy as a whole. I2 First, 28% of the reported stock optic -Qplans were explicitly described as applying to all or most employees. Six of these were found in the computer products and software areas, and another three in medical areas. The rest of the plans limited to ‘key’ employees, commonly ‘all managerial ployees’. This may mean a very sizab!e fraction of the workforce, given the frontier nature of some of the technology represented in the sample.13 Size is not a major determinant of st idence within our sample. To illustrate, 7 of the 3 firms with employees responding offered stock options plans; 13 of 16 firms with less than 1 employees offered them. With an employee stock purchase plan, the company subsidizes employee purchases of company stock. Typically, the employee pays 75-85x of the stock’s value, and may buy under the program only up to certain quantities. The stock may also be subject to transfer restrictions. 17 of the 37 firms reported such a program; seven of these were in the computer products and software areas; another three were in the medical area. These numbers may be compared with earlier studies for the economy as a whole. In the Freund and Epstein study covering firms of 5 or more employees, a 7% incidence was found, compared with 83% in our sample. The DOL study found up to 18% incidence among firms with 50 or more employees; our figure is 46%. An employee stock ownership plan (ESOP) establishes a trust of company stock for all employees of a firm (after, say, a one-year tenure). Seven of the 57 firms reported such a program; while 12% may not appear to be a high incidence, the US. Department of Labor estimate that there were only 7,889 such plans by 1983.la Four of the seven plans were in computer and software fields. 3.2. The te&ology sector in the Fortune 580 The relationship
between technology and share contracts
among large
12Unfortunately, according to the New York Stock Exchange, ro systematic economy-wide figures on stock options are available. “Unfortunately, we do not have detailed information on the percentage of employees eligible for stock options for the INC 1 sample, but anecdotal evidence su ts that 200/, is a common coverage in those high tech firms limiting participation to ‘key employees’. ‘*I would like to thank Dan Belier of the U.S. Department of Labor for his computational assistance.
XC. Smith, On the incidence of profit and equity sharing
55
firms was further examined through results from a second survey undertaken among the 25 computer-related firms on the Fortune 500 list.’ 5 Interestingly, five of these 25 firms appeared on the INC 100 list in their younger (smaller) days. Other computer firms appearing on the INC 1 lists of past years have been acquired by these firms. (One made the Fortune 500 list before being acquired.) Firms in this group range in size from 1,860 to 405,535 employees; the median firm has 9,500 employees. Eleven nses were received. Of 9 identified firms, the median size was close to 39 Each of the eleven firms responding reported either profit sharing, broadbased equity sharing, or both. Six of the firms reported a profit sharing plan. all employees were these reported that 80% or more ce of profit sharing and Epstein find their highest inci among manufacturing firms with over 1 s for key employees. Indeed, All 11 firms reported stock option such options are almost de rigueur for top executives in the Fortune before, more striking is how many workers are eligible for these op the computer sector. Though just a handful of top executives are eligible in many corporations, on average 15% of all employees are eligible for stock options in the responding firms. Nine of the 11 firms reported employee stock purchase plans. The FreundEpstei y found a highest incidence of 19% among manufacturing firms with 1 or more employees; again, 18% incidence was found in the DOL study covering companies with 50 or more employees. 6 reported that loo”/, of their employees were eligible, one reported 95”/, another 90-95x. In addition, 5 of the firms reported ‘otker stock bonus plans’. Finally, these firms were asked for their primary reasons for establishing any programs of this type. 3 of the 11 firms responded to this question. By ~;k order, 7 of these checked ‘increasing employee effort’, 4 checked ‘decreasing employee turnover’, 4 checked ‘tax benefits’, 3 checked ‘imFroving product quality’? and 3 checked ‘encouraging innovation’. Volunteered reasons included: provide for retirement, share in company growth, increase employee ownership, provide rewards for outstanding achievement, to encourage employees to have a stake in the company, and to promote participative management and employee team work. iiCY
s
This study has presented evidence in support of t e hypothesis that firms requiring high levels of human capital, innovation, production qualily, and experiencing rapid change or growth are more likely to offer share contracts “The survey was comparable to the one sent to the INC firms. The industry list was drawn from Fortune, April 28, 1986, pp. 212-214.
S.C.
56
to employees high tech sect
Smith,
On
the
incidence
of profit and
equity sharing
an firmsin the economy as a whole. were found to have relatively high le
citkally, firm in the uity
Htdoes not follow that
or service are co~~~t~ated as e easier, we nay co~~~t~~e, it
seve~e~ce; an
e abstract from other a discussion of isolation par P-4 in
s’. such as job satisfaction. See utterman (1982) for xes m this question. up Trade Secrets’, ~s~i~gtofl Post. Business Section, p. I, of ~Qm~~e~ti~~ity agreements and &her eflorts to protect s are found in the article.
nce
ofprofit
and equity braying
udity
57
u~~~ta~~ty and t
, mformation costs and economic
small firms, in; 39shua Ronen, ed., heoretical analysis, Journal of Economy 70, SuppI.,944.
58
S.C. Sm&h, On the incidence of profit and equity sharing
Doeringer, Peter B. and Michael J. Piore, 1971, Internal labor markets and manpower analysis (Heath; Lexington, MA) Freund, William C. and E. Epstein, 1984, People and productivity (Do-w Jones-Irwin, New York). Hart, Oliver, 1983, Optimal labor contracts under asymmetric information: An introduction, Review of Economic Studies 50,237. Jones, Derek C. and Jan Svejnar, 1982, Participatory and self-managed firms: Evaluating economic performance(Lexington Books, Lexington, Laxear, Edward P., 1979, Why is there mandatory retirement?,Journal of Political Economy 87, 1261-1284. Laxear Edward P., 1981, Agency, earnings profdes, productivity and hours restrictions, American Economic Review 71,606&O. ill, John Stuart, 1989, Principles of political economy, with some of their applications to social philosophy (Longmans, Green, New York). Putterman, Louis, 1982, Some behavioral perspectives on the dominance of hierarchical over democratic forms of enterprise,Journal of Economic Behavior and Organixation 3,13%16O. Putterman, Louis, 1984, On some recent explanations of why capital hires labor, Economic Inquiry 22,171-187. ussell, Raymond, 1985, Employee ownership and internal governance, Journal of Economic ‘or and Orga&ation 6,217-242. urat R., 1982, Workers and incentives (North-Holland, New York). Smith, Stephen C., 1985, Employee partipation programs in high tech, high growth lirms: A survey of the INC 100, George Washington Economics Discussion Paper 8410. Stiglitz, Joseph A., 1974, Incentives and risk sharing in share cropping, Review of Economic Studies 41,219-255. Walton, Richard E., 1979, Work innovations in the United States, Harvard Business Review, July-Aug., 88-98. Weitxman, Martin L., 1984, The share economy. Conquering Stagflation (Harvard University, Cambridge,MA). Williamson, Oliver E., 1975, arkets and hierarchies. Analysis and antitrust implications (Free Press, New York). Williamson, Oliver E., 1980, The organizaton of work: A comparative institutional perspective, Journal of Economic Behavior and Organization 1,5-38.
avior a
bwio
5-58.
46
SC Smith, On the incidence of profit and equity sharing
S.C. Smith, On the incr
47
48
S.C. Smith, On the incidence of proJit and equity sharing
S.C. Smith, On the ~m$iknce .?f
in high Qech fims.
role of specific human capital formation fifKIS.
49
En some eases an individual or
and e~t~e~~e~e~ria~ mobility
in wo~~e~-owned service
50
S.C. Smith, On the incidence of profit and equity sharing
workers participate in a ‘corporate culture’ [Deal and Kennedy (1982)], and responding to the values and social rewards of that culture, in which innovation may play an important part, yields meaning and afftrmation to the employee. But to whai extent does economic and organizational theory contribute to an understanding of the problem? Share contracts provide useful incentives wherever monitoring the activity reqluires doing the activity [Al&an and Demsetz (1972)]. In leading sectors omy, innovation is essential; and firms must design incentives both to encourage innovation and to ensure that innovators remain with the firm rather than develop their concepts on their own. Especially in the high tech sector, the economies of scale in innovation predicted by Schumpeter, Galbraith and others do not hold rigidly? And although it is more costly to bring a product to the market stage due to large capital requirements, the emergence of a more complete venture capi@ market and opportunities for joint ventures in the technology field between small innovators and large marketers provides innovators with considerable bargaining power. Thus, beyond general profit and equity sharing arrangements, we may expect high tech firms to have targetted arrangements for one or a team of innovators to share in the fruits of their innovation. The firm would not have to share as much as the present value of expected returns to the innovators from developing the product in a start-up firm, if the innovators were averse to risk. With assurance of a ‘reservation bonus’ being paid, there will be cases where innovative employees at the early stages of a major innovation will stay with the firm, leaving both parties with higher expected utility. Iiowever, we may not expect such arrangements to be viable in all cases. Arrow(1983) examines the ‘information degradation problem’ at the boundary between the firm and capital markets. Within the firm, Arrow points out, an employee may gain by misrepresenting the importance of an innovative concept. The employee could hold a different job by the time the innovation can be adequately tested; and in a stochastic environment, ‘that a project failed by no means proves that it should not have been undertaken’. This analysis has a c ‘al implication for what we view as a ‘lemons’ problem within the firm. the ‘best’ innovation concepts, i.e., those with a relatively high expected return and low risk, are those most likely to be en out of the firm by employees in an entrepreneurial fashion, then those tial projects remaining within the firm will be of lower expted value. er, it may simply be difficult to communicate effectively the true *In addition to the large numbers of small, innovative, entrepreneurial firms found in Silicon Valley, the Boston area and elsewhere, there is some evidence that even in very large firms, research and development breakthroughs often emerge from small, self-organized teams of 10 or less operatiug on a shoestring budget. A discussion of the r,~ so-called ‘skunk works’ is found in Peters and Waterman (1982). ‘The ‘lemons’ term was coined by Akerlof (!971), who examined inefftciencies in a market for goods of uncertain quality.
SC Smith, On the incidence of profit and equity sharing
51
importance of an innovation concept at early stages of development, if we are to believe many of the more successfulhigh tech entrepreneurs who claim to have acted on ‘hunches’. here are many cases, then, when a start-up will be the optimal response. F I outside financing till not b possible, if the innovators cannot convince even their former firm of the value of the project. Among the risk-averse founders at least, we may expect an equity sharing arrangement; and we may anticipate that they would wish to reduce their risk further by offering a share contract to new employees (likely including profit or revenue sharing in response to risks of period by period income shocks). On the employee side, working for a start-up, which has a high failure probability, and lower odds of becoming a major corporation, entails risks. Given, fixed wages compensating for these risks may add so much front cost to the firm as to make it uncompetitive. The only answer would appear to be some form of risk-sharing, lowering initial costs to the firm but promising yery large rewards to employees if the firm is successful. A welldesigned inmntive system including eqtity sharing may induce effort and innovative ‘behaviorresuiting in profits to be later shared with employees. 2.4. Firm size and the share contract
There are some a priori reasons to expect the size of the firm to affect the type of share contract [Al&an and Demsetz (1972)]. Employees in a noncooperative game, realizing that they receive only a fractional share of their marginal product, would in the absence of adequate effort enforcement undersupply effort. A cooperative game outcome is harder to ensure as the number of players gets larger. In the multidivisional firm, conflicts may emerge over appropriate transfer prices and, hence, the level of profits to be shared in the various divisions. However, the ultimate size of the parent firm is not the only or even necessarily the key predictor of the effectiveness of profit sharing. The capacity of the company to separate the value of the activities of its various divisions is the relevant determinant of the viability of a share arrangement. The firm will encounter transaction and bargaining costs in setting up and metering a team-based share contract, and in some cases these costs may outweigh the net productivity benefits of the contract. To the extent that there are economies of scale in administering such compensation schemes, we might anticipate lower incidence in the smallest firms. Further, risk sharing may put upward pressure on the size of a share firm, since founders’ aldcl later employees’ individual risk will be lowered in proportion to the number of risk sharers. In sum, firm size may influence the incidence of profit and equity sharing, though we may not say a priori in which direction. ut the theory suggests
52
SC. Smith, On the incidence of projit and equity sharing
S.C. Smith, 4)n the inci
ui0 y sharing
t 2 2 2 13 3 8 1 1 5 5 57
TOtd 7 3 3 2 2 9 13 3 4 13 0
cal reason for coding ‘ambiguous’ was a comment to the effect that a alarming stages’, oh ‘being implemente8.
53
54
S.C. Smith, On the incidence of profit and equity sharing
incentives. Combined, 31 of the 57 firms reported a currently operating program for general and for targetted profit sharing. Stock option plans of some type were reported by 47 out of 57 firms responding, or 83%. Four others are planning to introduce the are not striking in themselves; 92% of the Fortune 200 fi options for key executives [Cook (198(I)]. What is striking is that many of the reported plans extend to a large number of employees, though this is believed rare in the economy as a whole. I2 First, 28% of the reported stock optic -Qplans were explicitly described as applying to all or most employees. Six of these were found in the computer products and software areas, and another three in medical areas. The rest of the plans limited to ‘key’ employees, commonly ‘all managerial ployees’. This may mean a very sizab!e fraction of the workforce, given the frontier nature of some of the technology represented in the sample.13 Size is not a major determinant of st idence within our sample. To illustrate, 7 of the 3 firms with employees responding offered stock options plans; 13 of 16 firms with less than 1 employees offered them. With an employee stock purchase plan, the company subsidizes employee purchases of company stock. Typically, the employee pays 75-85x of the stock’s value, and may buy under the program only up to certain quantities. The stock may also be subject to transfer restrictions. 17 of the 37 firms reported such a program; seven of these were in the computer products and software areas; another three were in the medical area. These numbers may be compared with earlier studies for the economy as a whole. In the Freund and Epstein study covering firms of 5 or more employees, a 7% incidence was found, compared with 83% in our sample. The DOL study found up to 18% incidence among firms with 50 or more employees; our figure is 46%. An employee stock ownership plan (ESOP) establishes a trust of company stock for all employees of a firm (after, say, a one-year tenure). Seven of the 57 firms reported such a program; while 12% may not appear to be a high incidence, the US. Department of Labor estimate that there were only 7,889 such plans by 1983.la Four of the seven plans were in computer and software fields. 3.2. The te&ology sector in the Fortune 580 The relationship
between technology and share contracts
among large
12Unfortunately, according to the New York Stock Exchange, ro systematic economy-wide figures on stock options are available. “Unfortunately, we do not have detailed information on the percentage of employees eligible for stock options for the INC 1 sample, but anecdotal evidence su ts that 200/, is a common coverage in those high tech firms limiting participation to ‘key employees’. ‘*I would like to thank Dan Belier of the U.S. Department of Labor for his computational assistance.
XC. Smith, On the incidence of profit and equity sharing
55
firms was further examined through results from a second survey undertaken among the 25 computer-related firms on the Fortune 500 list.’ 5 Interestingly, five of these 25 firms appeared on the INC 100 list in their younger (smaller) days. Other computer firms appearing on the INC 1 lists of past years have been acquired by these firms. (One made the Fortune 500 list before being acquired.) Firms in this group range in size from 1,860 to 405,535 employees; the median firm has 9,500 employees. Eleven nses were received. Of 9 identified firms, the median size was close to 39 Each of the eleven firms responding reported either profit sharing, broadbased equity sharing, or both. Six of the firms reported a profit sharing plan. all employees were these reported that 80% or more ce of profit sharing and Epstein find their highest inci among manufacturing firms with over 1 s for key employees. Indeed, All 11 firms reported stock option such options are almost de rigueur for top executives in the Fortune before, more striking is how many workers are eligible for these op the computer sector. Though just a handful of top executives are eligible in many corporations, on average 15% of all employees are eligible for stock options in the responding firms. Nine of the 11 firms reported employee stock purchase plans. The FreundEpstei y found a highest incidence of 19% among manufacturing firms with 1 or more employees; again, 18% incidence was found in the DOL study covering companies with 50 or more employees. 6 reported that loo”/, of their employees were eligible, one reported 95”/, another 90-95x. In addition, 5 of the firms reported ‘otker stock bonus plans’. Finally, these firms were asked for their primary reasons for establishing any programs of this type. 3 of the 11 firms responded to this question. By ~;k order, 7 of these checked ‘increasing employee effort’, 4 checked ‘decreasing employee turnover’, 4 checked ‘tax benefits’, 3 checked ‘imFroving product quality’? and 3 checked ‘encouraging innovation’. Volunteered reasons included: provide for retirement, share in company growth, increase employee ownership, provide rewards for outstanding achievement, to encourage employees to have a stake in the company, and to promote participative management and employee team work. iiCY
s
This study has presented evidence in support of t e hypothesis that firms requiring high levels of human capital, innovation, production qualily, and experiencing rapid change or growth are more likely to offer share contracts “The survey was comparable to the one sent to the INC firms. The industry list was drawn from Fortune, April 28, 1986, pp. 212-214.
S.C.
56
to employees high tech sect
Smith,
On
the
incidence
of profit and
equity sharing
an firmsin the economy as a whole. were found to have relatively high le
citkally, firm in the uity
Htdoes not follow that
or service are co~~~t~ated as e easier, we nay co~~~t~~e, it
seve~e~ce; an
e abstract from other a discussion of isolation par P-4 in
s’. such as job satisfaction. See utterman (1982) for xes m this question. up Trade Secrets’, ~s~i~gtofl Post. Business Section, p. I, of ~Qm~~e~ti~~ity agreements and &her eflorts to protect s are found in the article.
nce
ofprofit
and equity braying
udity
57
u~~~ta~~ty and t
, mformation costs and economic
small firms, in; 39shua Ronen, ed., heoretical analysis, Journal of Economy 70, SuppI.,944.
58
S.C. Sm&h, On the incidence of profit and equity sharing
Doeringer, Peter B. and Michael J. Piore, 1971, Internal labor markets and manpower analysis (Heath; Lexington, MA) Freund, William C. and E. Epstein, 1984, People and productivity (Do-w Jones-Irwin, New York). Hart, Oliver, 1983, Optimal labor contracts under asymmetric information: An introduction, Review of Economic Studies 50,237. Jones, Derek C. and Jan Svejnar, 1982, Participatory and self-managed firms: Evaluating economic performance(Lexington Books, Lexington, Laxear, Edward P., 1979, Why is there mandatory retirement?,Journal of Political Economy 87, 1261-1284. Laxear Edward P., 1981, Agency, earnings profdes, productivity and hours restrictions, American Economic Review 71,606&O. ill, John Stuart, 1989, Principles of political economy, with some of their applications to social philosophy (Longmans, Green, New York). Putterman, Louis, 1982, Some behavioral perspectives on the dominance of hierarchical over democratic forms of enterprise,Journal of Economic Behavior and Organixation 3,13%16O. Putterman, Louis, 1984, On some recent explanations of why capital hires labor, Economic Inquiry 22,171-187. ussell, Raymond, 1985, Employee ownership and internal governance, Journal of Economic ‘or and Orga&ation 6,217-242. urat R., 1982, Workers and incentives (North-Holland, New York). Smith, Stephen C., 1985, Employee partipation programs in high tech, high growth lirms: A survey of the INC 100, George Washington Economics Discussion Paper 8410. Stiglitz, Joseph A., 1974, Incentives and risk sharing in share cropping, Review of Economic Studies 41,219-255. Walton, Richard E., 1979, Work innovations in the United States, Harvard Business Review, July-Aug., 88-98. Weitxman, Martin L., 1984, The share economy. Conquering Stagflation (Harvard University, Cambridge,MA). Williamson, Oliver E., 1975, arkets and hierarchies. Analysis and antitrust implications (Free Press, New York). Williamson, Oliver E., 1980, The organizaton of work: A comparative institutional perspective, Journal of Economic Behavior and Organization 1,5-38.