Structural Power and Its Contrasting Effects on Task and Compensation Heterogeneity

• In Event: 413 - Section on Organizations, Occupations and Work Refereed Roundtable Session. Table 01. Culture and Organizations
  In Refereed Roundtable 100min: Table 10. Institutions: Action and Practice

Abstract

This paper examines how dispersion of ownership and governance rights within firms shapes different types of workforce heterogeneity. It is commonly accepted that firms with dispersed ownership and governance rights, here termed structural power, will have a less heterogeneous workforce. Worker cooperatives are the prototypical case. However, prior studies of firms with distributed structural power suggest that different dimensions of workforce heterogeneity are differentially shaped by distributions of structural power. In particular, while wage inequality is diminished in the context of distributed structural power, task specialization is encouraged. Using multi-method data from two competitor firms with contrasting distributions of structural power, I explore how ownership and governance rights differentially shape compensation and task heterogeneity. Underlying earlier claims is the expectation that a heterogeneous workforce widely involved in governance will face high coordination costs, due to conflicting interests. I show that compensation decisions do generate conflicting interests, encouraging diminished heterogeneity in the context of distributed structural power. However, task specialization achieves a key interest shared by workers in the context of distributed structural power, namely to reduce management and oversight costs. I provide evidence for these claims, first, with payroll data illustrating differences in task and compensation heterogeneity at the two firms. Second, I explicate the above argument with ethnographic evidence around deliberations over task assignment and compensation allocation at the two firms. Most importantly, these findings refine our understanding of the limits that workforce heterogeneity place on firms with distributed structural power.

Author

• Trevor Daniel Young-Hyman, University of Wisconsin - Madison