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A Study On The Labor Relation Of Mutual Governance Model

Posted on:2005-03-01Degree:DoctorType:Dissertation
Country:ChinaCandidate:D J GuoFull Text:PDF
GTID:1116360125955126Subject:Political economy
Abstract/Summary:PDF Full Text Request
Most economists think that the corporate governance research fields are largely different from labor relations. They regard the corporate governance as the rights of shareholders and commitments of managements. Labor relations are thought as the benefit relationships between the employer and employee (or workers and the firms). In the hierarchical organization of the firm, workers only submit themselves to the compulsive authorities of the managements. The best plans of workers participations are only the managerial democratization too. We think that corporate governance is essentially the coordination among the different labor relations inside firms. In the other words, it is the mutual equilibrium between the human capital rights and physical capital rights. The firms are really the governance structures of labor relations in the view of contractual governance efficiency. Then the corporate governance is connected closely with labor relations in true world. Labor relations are the crucial influencing factors to the firm efficiency. The State-Owned Enterprises of socialism were seemed to understand better the above aspect than the capitalism. They encouraged workers to solidify and cooperate as the owners of the firms. The union was also allowed to share voting rights on the momentous decisions and monitors rights on the executions. However this cognition did not bring the high efficiency to SOEs. There were many causes such as the incentives incompatibility as a result of owner departure, the soft budget constraints, the evenness principles of allocation etc. It is no doubt that the foregoing knowledge is profound. Further the west advanced countries are carrying out the employee participations so that conventional antagonism is ameliorated.The paper starts with social labor division. Cooperation is considered as the basis of organization division and the transaction is the fundamentality of social division. The firm is not only the lens of contracts between human capital and physical capital, the arrangement of transaction cost thrifts instead of market price mechanism. If the natures of the firm were only understood partly, we cannot distinguish it from another organizations, such as monetary institution, metrology, guild etc. The nature of the firm manifest that it remedies the market division imperfection, then specific authority division is formed inside the organization. Because the specific labor division must cooperate and bring about steady relational contract, the "surplus" can be created so that certain scale economy is implemented. The firm can survive and develop just on the previous means, however, this cooperation need building organically up in order to avoid double-sided moral hazard. Hierarchy is constructed to direct and monitor the production, but the compulsive authority is basis on the asset ownership, namely capitalistic contractual mode of "capital employing labor". The residual rights of the property of human capital rights are deprived; therefore a hostile relation between capitalists and workers is fashioned. Inorder to change the situation, the traditional corporate governance models have to be altered. The mutual governance of capital and labor should be actualized. The theory of stake-holders is gradually approved, but that extensive mutual governance is too difficult to last in fact. This paper thinks the ideal mutual governance among the pivotal stake-holders is Employee Stock Ownership Plans. All labors gain stocks from the firm surplus and participate management through their human capital; so two residual rights of human capital property rights are really achieved. Incentives compatibility mechanisms take shape; the double-sided opportunism between managers and workers is reduced consequently.Labor relations are the most contracts of the firm. The core of contemporary labor relations evolved the multiple contracts between the property rights of human capital and the property rights of physical capital along with the development of social division. The pattern of labor...
Keywords/Search Tags:division, contract, transaction costs, mutual governance, Employee Stock Ownership Plans, labor relations, property rights of human capital, contractual incompleteness
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