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Ownership Culture Report: Ownership Cynics

The Ownership Culture Report
Cambridge, MA: Ownership Associates, Inc., No. 3,
July 9, 1999.

This version also published in the Journal of Employee Ownership
Law and Finance, Oakland: National Center for Employee Ownership,
Vol. 11, No. 4, Fall, 1999, pp. 69 - 78.
Download the PDF file of report [217 KB],
or visit Adobe for more information and a free PDF viewer.


What is Ownership Cynicism?

Ownership Expectations

Understanding and Trust

The Impact of Cynicism

Management Implications

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.

  1. 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.
  2. 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 of ownership.
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. [1] It covers a wide range of employees, including those who are almost cynics or almost believers.

The proportions of ideological cynics, situational cynics, neutral employees, and believers are in figure 1 below.

Group Percent

Ideological Cynics

Situational Cynics

Neutral Employees






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%.

Although it 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. [2]. The following sections explore some of those differences.

Ownership Expectations

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" [3] 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." [4] (A higher number indicates greater agreement with the statement--i.e., higher numbers reflect higher reported expectations.)

Figure 2: Ownership Expectations.

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 the company.

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) [5] 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. Figure 3: Understanding

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." [6] 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.

Figure 4: Trust in Ownership

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 [7]), 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 U.S. average.

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." [8]

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: Work Effort

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 through ownership.

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 figure 6.

Figure 6: Entrepreneurship

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?

Management Implications

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 cynics.

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.[9])

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 cynics.[10]

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.
Visit the Ownership Culture Report main page for more information or to sign up for a free subscription.


1 An ideological cynic is defined as a respondent who gave one of the lowest possible ratings to the importance of ownership. Situational cynics gave one a the lowest ratings to the extent to which they self-identify as owners. This operationalization is not intended to be in perfect alignment with our definitions of the two types of cynics--the characteristics given in the definition follow from our analysis of the respondents defined by this operationalization.

2 Differences were calculated using one-way ANOVA, and statistical significance was calculated at the p = 0.05 level. 54 of these items (or 64%) are significant at p = 0.0001.

3 Lynne M. Andersson, "Employee Cynicism: An Examination Using a Contract Violation Framework," Human Relations, Vol. 49, No. 11, 1996, p. 1404.

4 The differences among the four groups are statistically significant: one-way ANOVA was significant at the p=0.0001 level.

5 We use the phrase "employee ownership plan" (EOP) to include ESOPs, broad-based stock option plans, stock purchase plans, cooperatives, partnerships, and direct share ownership.

6 This survey item is one part of the trust-in-ownership construct. The difference among the four groups is statistically significant at the p=0.0001 level. On this item, ideological cynics scored 48, situational cynics scored 35, neutral employees scored 52 and believers scored 72. See The Ownership Culture Report, "Trust and Ownership," No. 1, May 8, 1998, for more information about trust-in-ownership and trust-in-management.

7 The Job In General index is copyrighted and maintained by Bowling Green State University. Used by permission. For more information, see Balzer, W.K, Smith, P.C., Kravitz, D.E., Lovell, S.E., Paul, K.B., Reilly, B.A., and Reilly, C.E., Users' Manual for the Job Descriptive Index (JDI) and the Job in General (JIG) Scales, Bowling Green: Bowling Green State University, 1990.

8 The differences among the four groups are statistically significant: one-way ANOVA was significant at the p=0.0001 level.

9 See Frontiers and Boundaries: Curriculum Excerpts, available from Ownership Associates.

10 See Mackin, Christopher, "Creating An Ownership Culture," The Journal of Employee Ownership Law and Finance, Vol. II, No. 4, Oakland: National Center for Employee Ownership, Fall 1990.

The Ownership Culture Reports

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