Critical Analysis of the Relationship between Local Ownership and Community Resiliency*

Local ownership in six Canadian forest-sector buyout cases is complex and subject to numerous constraints.

“By drawing from six local buyout cases in Canada's forest sector, we reveal the complexity and numerous constraints on local ownership and expose a more nuanced context than most sociologists tend to consider.”

Coupled ownership, i.e., ownership over the mill and tenure, resulted in greater opportunities for community members to learn about the forest industry as they worked together to complete the buyout.

“Coupled ownership, i.e., ownership over the mill and tenure, resulted in greater opportunities for community members to learn about the forest industry as they worked together to complete the buyout.”

In both Pine Falls and Kapuskasing, the company was bought out by Tembec.

“as in both these cases the company was bought out by Tembec.”

Four of the six cases had multiple types of local ownership.

“Four of the cases had multiple types of local ownership.”

Local ownership is highly complex and not conceptually bounded by public and private forms.

“Like others, we found that local ownership is highly complex and not conceptually bounded by ''public and private'' forms (see also Buroway and Verdery 1999;Geisler and Daneker 2000).”

• cites Buroway and Verdery 1999Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

• cites Geisler and Daneker 2000Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

In Revelstoke, the community sought to ensure the flow of benefits from the forest industry to the community, rather than watch locally grown logs be shipped to mills in other jurisdictions.

“In Revelstoke, the community sought to ensure the flow of benefits from the forest industry to the community, rather than watch locally grown logs be shipped to mills in other jurisdictions.”

In Meadow Lake, local control was sought after a newly elected Conservative government decided to privatize a mill that had always struggled to earn a profit for the Crown Corporation that owned it.

“In the Meadow Lake case, local control was sought after a newly elected Conservative government decided to privatize a mill that had always struggled to earn a profit for the Crown Corporation that owned it.”

For community corporations such as in Revelstoke and Meadow Lake, respective communities benefit directly through dividends from the community corporations.

“For community corporations (such as in Revelstoke and Meadow Lake), respective communities also benefit directly through dividends from the community corporations.”

In the two opportunity-motivated buyouts, social forms of local ownership were created with a very high proportion of ownership retained locally: 100% in Revelstoke and 80% in Meadow Lake.

“In the two opportunity-motivated buyouts, social forms of local ownership were created with a very high proportion of ownership retained locally (100% in the Revelstoke case and 80% in the Meadow Lake case).”

In the Pine Falls case, employee owners expressed dissatisfaction with managers who held a disproportionate number of shares and seats on the Board of Directors.

“In the Pine Falls case, employee owners expressed dissatisfaction with managers who held a disproportionate number of shares and seats on the Board of Directors (Krogman and Beckley 2002).”

• cites Krogman and Beckley 2002 sourceNot checked — no full text of the source

The four organizational types of local ownership are not mutually exclusive within a buyout.

“Firstly, these four organizational types of local ownership are not mutually exclusive within a buyout.”

In all the cases, regardless of ownership structure, the respective communities benefited from the local companies' willingness to invest in their host communities.

“In all the cases, regardless of ownership structure, the respective communities benefited from the local companies' willingness to invest in their host communities.”

Four of the cases were crisis driven.

“four of the cases were crisis driven.”

In the crisis-driven cases, saving the town became analogous to saving jobs for a large proportion of the population.

“In these cases, saving the town became analogous to saving jobs for a large proportion of the population.”

None of the six cases are pure cooperatives.

“None of our cases are pure cooperatives.”

In the opportunity-induced cases, respondents generally reported that they felt more in control over their economic future as a result of local ownership.

“In the opportunity-induced cases, respondents generally reported that they felt more in control over their economic future as a result of local ownership”

• AssumptionRests on an assumption: Respondents' reports of their feelings of control and managers' reported commitment accurately reflect actual local control and community resilience.

A comparison of all six cases at the time of the buyout reveals three ownership ventures: ownership over the mill; ownership over a forest license that grants timber harvesting rights in a defined area; and ownership over a mill coupled with rights to a forest license.

“A comparison of all six cases at the time of the buyout reveals three ownership ventures: (1) ownership over the mill (e.g., Sacre ´-Coeur and Temiscaming); (2) ownership over a forest license that grants timber harvesting rights in a defined area (e.g., Revelstoke); and (3) ownership over a mill coupled with rights to a forest license (e.g., Pine Falls, Meadow Lake, and Kapuskasing).”

Respondents expressed greater concern about the business viability of their employer, and the jobs associated with business presence, than access to or control over company decisionmaking.

“our respondents expressed greater concern about the business viability of their employer, and the jobs associated with business presence, than access to or control over company decisionmaking.”

Over time, as share value increased, it became increasingly difficult to maintain share ownership among employees.

“Over time, as share value increased, it became increasingly difficult to maintain share ownership among employees.”

In the opportunity-induced cases, the rights to ownership were as celebrated as the benefits accruing from it.

“the rights to ownership were as celebrated as the benefits accruing from it.”

In two cases workers initially created cooperative structures to manage shares of the company that were collectively owned by the workers.

“However, in two cases workers initially created cooperative structures to manage shares of the company that were collectively owned by the workers.”

Under NorSask's management in Meadow Lake, local comanagement boards were established that provided greater opportunities for broader-based decision making.

“under NorSask's management in Meadow Lake, local comanagement boards were established that provided greater opportunities for broader-based decision making (Hamersley-Chambers and Beckley 2003)”

• cites Hamersley-Chambers and Beckley 2003Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

Four organizational forms of ownership-social ownership, cooperative ownership, trust ownership, and direct-share ownership-were found within the six local buyout cases.

“Four organizational forms of ownership, social ownership, cooperative ownership, trust ownership, and direct-share ownership (Beatty and Schachter 2002;Rhodes and Steers 1981), were found within the six local buyout cases.”

• cites Beatty and Schachter 2002Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

• cites Rhodes and Steers 1981 sourceNot checked — no full text of the source

Local ownership does not necessarily protect a firm from subsequently being bought out by an outside buyer.

“local ownership does not necessarily protect a firm from subsequently being bought out by an outside buyer”

The translation of shares to decision-making power through the Board of Directors was not 1% of shares to 1% of seats, as in the other four cases.

“The translation of shares to decision-making power through the Board of Directors was clearly not 1 percent of shares to 1 percent of seats, as in the other four cases.”

In Meadow Lake, direct-share ownership was restricted to the employees of NorSask Forest Products Inc.

“In Meadow Lake, direct-share ownership was restricted to the employ- ees of NorSask Forest Products Inc.”

The meaning of local ownership and community resilience varies depending upon the composition, type, extent, and level of control associated with ownership.

“Our findings suggest that the meaning of local ownership and community resilience varies depending upon the composition (e.g., private vs. public; mill vs. forest license vs. coupled mill & forest license), type (social, cooperative, trust and/or direct-share ownership), extent of ownership (percentage of local versus extra-local shares), and the level of control (e.g., proportion of locally held”

Of Rodger's five meanings of employee ownership, respondents were less concerned about participation and influence than maintaining their sense of community and direct financial security.

“Of Rodger's (2001) five meanings of employee ownership, we found our respondents less concerned about participation and influence than maintaining their sense of community and direct financial security.”

• cites Rodger's (2001)Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

In Revelstoke, the community wished to have a stronger role in forest management.

“They also wished to have a stronger role in forest management.”

Each of these sales occurred within a few years after the local buy-out.

“Each of these sales occurred within a few years after the local buy-out.”

In both Kapuskasing and Pine Falls, mill workers and other investors received more than 10 times the value of their original shares in less than 10 years.

“As well, in both cases, mill workers and other investors received more than 10 times the value of their original shares in less than 10 years.”

In cases where a few nonlocal individuals held a disproportionate number of the shares, they reportedly held more influence on the Board of Directors than did other members.

“In cases where a few (nonlocal) individuals held a disproportionate number of the shares, they reportedly held more influence on the Board of Directors than did other members.”

Government intervention to facilitate the process of obtaining and maintaining local ownership was important for many of the buyout cases.

“Government intervention to facilitate the process of obtaining and maintaining local ownership was important for many of the buyout cases.”

In the six cases, local ownership ranged from 59 percent to 100 percent.

“Local ownership is defined as any situation where owners are at least 51 percent local, but it ranged from 59 percent to 100 percent within these six cases.”

The type of mill, the number of employees, and the level of capitalization required to make the firm competitive may limit the form of ownership.

“Hence, the type of mill, the number of employees, and the level of capitalization required to make the firm competitive may limit the form of ownership.”

Opportunity-motivated buyouts strengthened the link between local ownership and local control.

“opportunity-motivated buyouts strengthened the link between local ownership and local control.”

Ownership that involves both the forest license and the mill carries broader benefits for the community than ownership over the mill only or rights only to harvest timber, given the higher autonomy and control mill owners have when they possess an adequate timber supply from which they control.

“These are important distinctions because ownership that involves both the forest license and the mill carries with it broader benefits for the community than ownership over the mill only or rights only to harvest timber, given the higher amount of autonomy and control mill owners have when they possess an adequate timber supply from which they control.”

• AssumptionRests on an assumption: In Canada, a company or community may have tenure over a forested area to harvest timber, but without ownership of a mill, benefits from that tenure may be limited or completely dependent on market relationships with a mill.

Greenberg, Grunberg and Daniel (1996) found that workplace participation in locally owned industrial enterprises appears to be suppressed in economically troubled enterprises.

“Greenberg, Grunberg and Daniel (1996) found that workplace participation in locally owned industrial enterprises appears to be suppressed in economically troubled enterprises”

• cites Greenberg, Grunberg and Daniel (1996) sourceNot checked — no full text of the source

The type of mill, the number of employees, and the level of capitalization may limit the potential form of local ownership, and thus distribution of benefits in the community.

“Therefore, the type of mill, the number of employees, and the level of capitalization may limit the potential form of local ownership, and thus distribution of benefits in the community.”

• AssumptionRests on an assumption: Paper mills are large and capital-intensive compared with sawmills.

The different types of local ownership confer different rights and responsibilities.

“Secondly, the different types of local ownership confer different rights and responsibilities (Hochner et al. 1988).”

• cites Hochner et al. 1988Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

The ability to benefit from local ownership is tied to the extent of local ownership.

“The ability to benefit from local ownership is tied to the extent of local ownership.”

• AssumptionRests on an assumption: In Canada, a company or community may have tenure over a forested area to harvest timber, but without ownership of a mill, benefits from that tenure may be limited or completely dependent on market relationships with a mill.

Buyouts involving only a mill, crisis-induced, one direct share, one a mix of cooperative and social ownership, appeared to provide fewer gains in community resiliency, given their role was limited to mill management.

“Buyouts which involved only a mill (crisis-induced, one direct share, one a mix of cooperative and social ownership) appeared to provide fewer gains in community resiliency, given their role was limited to mill management.”

The link between local ownership and local control can occur at either the company level or at the community level.

“This link between local ownership and local control can occur at either the company level or at the community level.”

Particular features of a locally owned business can undermine local control.

“however, particular features of a locally owned business can undermine local control.”

Coupled ownership leads to resiliency given the capacity residents fostered to create an unorthodox ownership arrangement with built-in mechanisms to engage community members in decision-making.

“We argue this leads to resiliency given the capacity residents fostered to create an unorthodox ownership arrangement with built-in mechanisms to engage community members in decision-making.”

Community efforts to obtain a forest license in Revelstoke, social ownership, led to strengthened community resiliency, given the learning that occurred as environmentalists and mill owners negotiated the terms under which the community corporation would secure the license.

“community efforts to obtain a forest license in Revelstoke (social ownership) also led to strengthened community resiliency, given the learning that occurred as environmentalists and mill owners, for example, negotiated the terms under which the community corporation would secure the license.”

The composition of local ownership appears especially important for buy-outs that involve large capital-intensive ventures.

“The composition of local ownership appears especially important for buy-outs that involve large capital-intensive ventures.”

In these two cases, greater local ownership did not lead to greater local decision making in direct proportion to the extent of local ownership.

“these two cases reveal that greater local ownership did not lead to greater local decision making in direct proportion to the extent of local ownership.”

The assumption that local ownership automatically confers local control is inaccurate.

“Hence, the assumption that local ownership automatically confers local control is inaccurate.”

These requirements decreased the independence and autonomy commonly associated with local ownership.

“All these decreased the independence and autonomy that we commonly associate with local ownership.”

Facilities of the size of large capital-intensive ventures are usually outside the financial reach of rural communities without external investors.

“yet facilities of this size are usually outside of the financial reach of rural communities without external investors.”

With significant outside investors, community resilience, or the ability to strategically reorganize assets at the local level, is reduced.

“With significant outside investors, community resilience, or the ability to strategically reorganize assets at the local level, is reduced.”

Within forestry, there are many examples where ownership and control, through regulation or management, are separated.

“within forestry there are many examples where ownership and control (through either regulation or management) are separated (Haley and Luckert 1998).”

• cites Haley and Luckert 1998Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

All local forms of ownership provide greater community resilience potential than absentee ownership, given the skills learned in the buyout about financial management of a business in a global market, renegotiating wages and vacations with unions and nonunionized employees, and key players necessary to underwrite a mill and obtain a forest license.

“However, all local forms of ownership provide greater community resilience potential than absentee ownership, given the skills learned in the buyout about financial management of a business in a global market, renegotiating wages and vacations with unions and nonunionized employees, and key players necessary to underwrite a mill and obtain a forest license.”

Most contemporary sociological discussions of ownership have overlooked the importance of relationships associated with different kinds of ownership.

“Most contemporary sociological discussions of ownership have overlooked the importance of relationships associated with different kinds of ownership.”

• cites Geisler and Salamon (1993)Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

• cites Salamon (1993)Not matched

  Couldn’t be matched to a paper in Crossref, so it can’t be checked.

The extent of local ownership affects the level of involvement and commitment of local and extra-local groups.

“The extent of local ownership affects the level of involvement and commitment of local and extra-local groups.”

The type of local ownership influences the decision-making power of local and extra-local groups.

“The type of local ownership influences the decision-making power of local and extra-local groups.”

The six buyout cases reveal a more complex concept of ownership and property than heretofore discussed in most rural sociology scholarship.

“These six cases reveal a more complex concept of ownership and property than heretofore discussed in most rural sociology scholarship.”

Share distribution and seats on the Board of Directors may be such that one or two nonlocal investors wield greater control, as the concentration of their shares is greater than the concentration of any other individual's shares, as in Kapuskasing and Pine Falls.

“In addition, share distribution and seats on the Board of Directors may be such that one or two nonlocal investors wield greater control, as the concentration of their shares is greater than the concentration of any other individual's shares (e.g., Kapuskasing and Pine Falls cases).”

There are many constraints to maintaining local ownership.

“There are many constraints to maintaining local ownership.”

Without a long-term management strategy and clear commitment to community resiliency, local ownership may revert back to absentee ownership, as occurred in the cases of Kapuskasing and Pine Falls.

“Without a long-term management strategy and clear commitment to community resiliency local ownership may revert back to absentee ownership, as occurred in the cases of Kapuskasing and Pine Falls.”

Generally, the more inclusive the ownership structures across employees, managers, and community members, the greater the likelihood of explicit goals to support local jobs, community programs, and long-term viability of the business.

“Generally, the more inclusive the ownership structures across employees, managers, and community members, the greater the likelihood of explicit goals to support local jobs, community programs, and long-term viability of the business.”