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Video: the case for employee-owned business – David Erdal interview part 1

17 February 2012

Economists will tell you that employees will extract money and they won't invest enough. Company after company after company proves that's not the case.

David Erdal

Matt Black meets David Erdal, a pioneer of the employee-owned business movement and author of Beyond the Corporation: Humanity Working.

There are a lot of preconceived notions about employee-owned businesses: they are 'reactive', 'slow growers' and cannot take on capital, for example. But do these objections stand up to scrutiny?

David Erdal, author of Beyond the Corporation: Humanity Working, thinks not. In fact, he argues in the first of a three part video series, that employee-owned businesses perform better than UK Plc in many ways.
Erdal contrasts employee-owned business with pension funds, which aim to diversify investments to ensure risk is driven to the absolute minimum. The opposite is true in an employee-owned business, which sees employees taking on more risk. But the risk comes with reward, and that pay-off motivates employees to work harder, invest more in the business, improve its performance and hold its senior management accountable for their actions.

But if employee-owned businesses are so effective, why are they such a fringe business pursuit? In the second part of the interview Erdal discusses the barriers to the creation of these organisations. Stay tuned to LIVEWIRE for details.

David Erdal, is non-executive director of Baxi Partnership and Author of Beyond the Corporation. If your business is interested in becoming employee-owned, you can contact Baxi Partnership on 0845 680 6702, email or visit their website to find out more.

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