Full Sail: Ten Years of Employee Ownership

Somehow I missed this important milestone: ten years and two days ago, Full Sail became employee-owned. I will attempt to dig up my old column reporting on the event--it was one of the more fascinating moments in Oregon brewing history. The employees managed to hold off a hostile takeover bid by Indian beer titan Vijay Mallya in dramatic stand-off.

But while I sift through the old floppies in my closet, let me direct you to Patrick Emerson's wonderful post on the economics of employee ownership. He has been mighty impressed with the way Full Sail has positioned themselves and grown (as I have, incidentally), and wondered whether it was because or in spite of their ownership structure. I want you to go to his site to read the entire post--it can't easily be broken in parts--but I'll offer a teaser paragraph here:

Economists in general have always been fairly skeptical of employee owned companies. The dominant theme in the literature is generally that the incentives of employee owners are to reward themselves at the expense of the firm and to be more interested in the short term success of the company than its long term growth, as well as to have too diffuse a decision making structure and to have too little independent supervision of employees. For example, can employee owned companies make the hard decision to cut positions in economic downturns?

... So is Full Sail the exception the the rule or a classic example of the sensibility of employee ownership?

His answer may surprise you.