What is Ownership Cynicism?
Understanding and Trust
The Impact of Cynicism
Most people have a positive impression of employee ownership, but there are always exceptions.
Every employee owner knows them--they're the cynics who say "What difference does any of this make?
Nothing's ever going to change around here."
Some companies use their in-house cynics as a diagnostic resource--these companies have found
that cynicism provides valuable data about issues of legitimate concern to the entire work force.
Whether or not the cynics' position is well-founded, a careful response can improve motivation,
satisfaction, and performance among cynics and non-cynics alike.
This article looks at concrete social science data about the roots and effects of cynicism, and offers
suggestions for responding to cynics.
What is Ownership Cynicism?
"Cynicism" is a familiar term, but it can take on many different meanings
in the context of an employee-ownership company. To focus the discussion, this report covers two basic types of cynics.
Beyond these cynics, two other types of employees round out the discussion. Believers
are the opposite of cynics. They react positively to ownership both as an abstract idea (in contrast to the
ideological cynics) and as it exists at their own companies (in contrast to the situational cynics). These
employee are the "ESOP champions." Finally, neutral employees, the "silent majority," are neither
believers nor cynics. This category of employee captures all those who do not meet our definition
of ideological cynic, situational cynics, or believers.  It covers a wide
range of employees, including those who are almost cynics or almost believers.
- Ideological Cynics reject the idea of employee ownership. At a conceptual
level, they believe that employees cannot or should not be real owners. One respondent, exemplifying
this perspective, described employee ownership as "a fairy tale." Ideological cynics disagree with the
"ideology" of shared ownership.
- Situational Cynics may believe that ownership has potential benefits in the
abstract, but they feel that their own company has not done a good job of realizing that potential.
They support the idea of ownership, but not the way in which their company implements it. A
situational cynic might say "ownership is a nice idea, but it hasn't changed our situation much,"
or, in the words of one actual respondent, ownership at her company is a "strong concept [with]
weak execution." These people find that their actual work situation does not match their concept
The proportions of ideological cynics, situational cynics, neutral employees, and believers are in
figure 1 below.
The data for this report comes from the Ownership Culture Survey, or OCS, an employee-attitude survey designed
exclusively for employee-ownership companies. The database used in this analysis includes 1,441 employee owners.
Figure 1 shows the averages across the entire database. When the data are broken down for
individual companies, substantial variation emerges. For example, one company had more than
double the average number of believers (36%) and another had about half (8%). The number of
situational cynics ranged between 9% and 38%. In other words, the number of believers and
situational cynics can vary greatly, although neither category seems to ever disappear completely.
By contrast, the number of ideological cynics ranged as high as 8%, and as low as 0%.
is difficult to make accurate comparisons about job classifications from one company to another, a
few general trends emerge. Non-management employees tend to be close to the average distribution
given in figure 1. Senior managers are more likely to be believers, and none of the senior managers in
the OCS database are ideological cynics. Middle managers and supervisors are slightly
less likely than average to be believers, and somewhat more likely to be situational cynics.
We will return to the issue of situational cynicism among middle managers.
The relationship between the number of ideological cynics and the number of situational cynics at
a company is weak. We found that a company with a high proportion of ideological cynics can have
an above-average or a below-average number of situational cynics, and vice versa. A different set
of forces seem to create these two types of cynics.
The presence of cynics affects the full spectrum of a company's culture. The 85 survey items in the
OCS database cover issues such as decision making, accountability, information, learning,
entrepreneurship, and fairness. (More information about the complete model of ownership culture
used in the OCS is available here.) The differences among the four
groups are statistically significant for 69 (or 81%) of these survey items. .
The following sections explore some of those differences.
The concept of ownership has powerful cultural associations which often create expectations of
increased control, access to information, financial reward and, possibly, a more egalitarian distribution
of income and wealth. It is our experience that these ownership expectations always exist in some form
whenever employees are called owners, and one of the major challenges facing employee-ownership
companies is how to best manage these expectations. Clearly, unrealistic expectations can foster cynicism
--one academic study suggests that "unmet expectations…are a direct antecedent to cynicism"
 but do expectations affect both types of cynicism?
Results from one OCS client company indicate that the connection between
expectations and ideological cynicism is direct and powerful. Figure 2
shows the average scores for different employee groups to the survey item
"I have higher expectations for [my company] than I would have for most
companies."  (A higher number indicates greater
agreement with the statement--i.e., higher numbers reflect higher reported
The situational cynics have expectations almost as high as neutral respondents.
By contrast, the ideological cynics have extremely low ownership expectations.
They simply do not expect much from their work other than a paycheck. In other
words, ideological cynicism seems to entail an instrumental perspective towards
These impressions are confirmed by OCS items which ask respondents to rate the
importance of five distinct aspects of employee ownership: financial return,
participation in local decisions, influence over global decisions, a sense of
community, and fairness. Throughout the OCS database, ideological cynics rate
all five of these values as significantly less important than their colleagues do,
reinforcing the idea that low expectations are a defining characteristic of
ideological cynicism. By contrast, believers rate all aspects as substantially
more important. Between these extremes, there is essentially no difference
between neutral employees and situational cynics.
Ideological cynicism is characterized by low expectations, but situational
cynicism seems to arise when employees with average expectations come
to feel that the company has failed to meet their expectations.
Understanding and Trust
The level of perceived understanding of the employee-ownership plan
(EOP)  has consistently been one of the most
important determinants of ownership culture. As figure 3
indicates, cynics tend to have lower levels of perceived understanding
of ownership. The low scores of the situational cynics suggest that poor
understanding may be linked to their brand of cynicism.
To explore the relationship between understanding, trust and cynicism,
the concept of trust-in-ownership is useful. Trust-in-ownership is the
belief that the ownership plan is legitimate and in participants' interests.
It contrasts with trust-in-management, which is the extent to which
employees trust in their managers as individuals. [See
Trust and Ownership, the first issue of
The Ownership Culture Reports, for more information.]
Low levels of understanding tend to be
strongly associated with low scores on trust-in-ownership, and, in fact, both ideological and
situational cynics have substantially less trust in the ownership plan than other employees.
(See figure 4.) Situational cynics in particular have low trust-in-ownership scores.
For example, they are far more likely to believe that "senior management uses ownership
mainly for its own purposes."  Just as expectations may be
a defining feature of ideological cynics, low levels of trust-in-ownership appear to be a
basic characteristic of situational cynicism.
The OCS allows investigation of different components of trust-in-ownership,
one of which concerns sharing the risks and rewards of ownership.
Respondents with low trust scores often doubt the connection between
the company's success and their own financial well-being. In fact, both
situational cynics and ideological cynics are far less likely than average
to believe that employees will share in company success. However, the
ideological cynics do not generally feel concerned about the risk involved
with owning company stock, while situational cynics do. In other words,
neither ideological nor situational cynics believe in the "upside" of
ownership, but situational cynics alone worry about the possible downside.
Improving understanding of the EOP, and its effect on other benefit plans,
may help alleviate situational cynicism.
The Impact of Cynicism
One OCS client used a standardized measure of job satisfaction (the "Job In General"
index by Bowling Green State University ), allowing us
to analyze the relationship between cynicism and job satisfaction. At this company,
the satisfaction scores for the two cynic groups are statistically indistinguishable
from one another--and both are substantially below the U.S. average for companies
in their general sector. Neutral employees and believers are more satisfied than the
The satisfaction data support similar observations about organizational commitment.
Throughout the OCS database, both ideological and situational cynics are less likely
than average to believe that "employees at [my company] are very committed to
the company and its future." 
Ideological cynics are least likely to believe that "it is possible for things to change"
at the company. Situational cynics are also less optimistic than average.
Cynics are not lower on all culture measures. For example, one may reasonably expect
that on the average cynics would be more negative than their colleagues about the
social atmosphere at the company, but OCS data indicate that situational cynics
believe they have the same quality of work relationships as neutral employees
do. Only ideological cynics perceive work relations as worse than average.
The OCS measures two dimensions of employee contributions to company success.
"Work Effort" is how hard people say they work. "Entrepreneurship" is a combination
of characteristics which can be summarized as how smart people say they work.
Figure 5 shows the responses to one item in the Work Effort category:
"I feel an obligation to work hard for the company." The results for this
item are more extreme than the others in Work Effort, but the pattern is the same.
Figure 5 shows that situational cynics and neutral employees feel a similar high
level of obligation to work hard.Situational cynics often appear to resent the
obligation, however, and neutral employees do not. This difference may be
because the neutral employees better understand how they will be rewarded
On Entrepreneurship, both ideological and situational cynics are below average.
Both are less likely to feel that "it is part of my job to find out how [my
workgroup] can improve its performance," shown in
To summarize: ideological cynics seem to work less diligently and with less mental
engagement than the typical employee. Situational cynics work as hard as the
typical employee, but they are less likely to contribute to the company beyond
the boundaries of their job description.
Ideological cynicism is a more difficult challenge, but situational cynicism is
generally more prevalent. What steps can a company take in response to cynics?
No company can reasonably expect to eliminate cynicism, but cynicism can be
"contagious" and should not be ignored. When dealing with cynics, the most
important audience is often not the cynics themselve--it's the rest of the work
force. An open and principled response to cynics has the indirect effect of
encouraging more believers and discouraging neutral employees from becoming
Dealing with cynics should not consume all of company leaders' time. Do not
neglect the rest of the work force. The most effective way to overcome cynicism
is indirect: through co-workers who are not cynical. Cynics may not listen to
managers, but they are influenced by their colleagues.
Manage Expectations. Companies must be careful about
the promises they make or are perceived to make about employee
ownership. High expectations can encourage engagement and hard work,
but unrealistic expectations often result in disillusionment and situational
cynicism. Low expectations, on the other hand, seem to be a primary cause
of ideological cynicism. To prevent both types of cynicism, companies
consciously determine and explicitly discuss what ownership does and
does not mean. They may encourage structured peer-to-peer discussion
of expectations. (See the Frontiers and Boundaries curriculum
from Ownership Associates.)
Focus on Middle Managers. Since supervisors are
the "face" of the company to many employees, companies must address the
high observed levels of situational cynicism among middle managers and
supervisors. If they are to promote rather than discourage enthusiasm
about employee ownership, supervisors should be able to answer
employees' questions about the EOP. They should also be comfortable
in their new roles and confident about their job security.
Education. The most effective response to situational
cynics is likely to involve education. Education about the mechanics of
the EOP should also include a range of topics, such as basic legal and
regulatory issues, a capsule history of employee ownership in the U.S.,
and the rights and responsibilities of ownership. Do not avoid the issue
of why the EOP was advantageous to the seller. Examples of employees
retiring and cashing out help make the EOP feel "real." This information
gives credibility and context to the EOP.
Communication. Secrets and surprises breed cynicism.
Especially when situational cynicism is prevalent, increased information
sharing reduces the credibility of cynics. Establish principles for
information sharing and participative decisions, publicize them,
and follow them consistently.
Ideological Cynics. Although some
companies succeed in eliminating ideological cynicism, there is
generally less a management team can actively do about
ideological cynics. All of the suggestions above apply to
ideological cynics, but change will be slow. The most effective
tool to overcome ideological cynicism is peer-to-peer discussion.
In carefully structured small-group discussions, co-workers can
challenge the perceptions and assumptions of the ideological
The most effective way to keep cynicism to a minimum is to
prevent it before it starts. Companies should consider some
of the steps above before cynicism becomes a problem, or,
ideally, before the EOP is adopted.
The Ownership Culture Reports are a series of working papers
published by Ownership Associates, Inc. Other issues available on the web include:
Trust and Ownership: Trust in Managers and Trust in Ownership, No. 1, May 8, 1998.
Participation: Decision Making and Employee Ownership, No. 2, September 17, 1998.
Ownership and Motivation: What Does Ownership Mean to Employees?, No. 4, January 17, 2001.
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