Workplace democracy

Workplace democracy is the application of democracy in various forms to the workplace, such as voting systems, consensus, debates, democratic structuring, due process, adversarial process, and systems of appeal. It can be implemented in a variety of ways, depending on the size, culture, and other variables of an organization.[1][2]

Theory

Economic argument

From as early as the 1920s, scholars have been exploring the idea of increasing employee participation and involvement. They sought to learn whether including employees in organizational decision-making would lead to increased effectiveness and productivity within the organization. According to Lewin, individuals who are involved in decision-making also have increased openness to change.[3]

Citizenship argument

Workplace democracy may encourage public participation in a government's political process. Skills developed from democracy in the workplace can transfer to improved citizenship and result in a better functioning democracy.[4]

Ethical justification

Philosopher Robert Dahl claims that, "If democracy is justified in governing the state, it must also be justified in governing economic enterprises."

Political association

Workplace democracy theory closely follows political democracy, especially in larger workplaces. Democratic workplace organization is often associated with trade unions, anarchist, and socialist (especially libertarian socialist) movements. Most unions have democratic structures at least for selecting the leader, and sometimes these are seen as providing the only democratic aspects to the workplace. Not every workplace that lacks a union lacks democracy, and not every workplace that has a union necessarily has a democratic way to resolve disputes.[14]

The Menshevik led Democratic Republic of Georgia experimented with workplace democracy by promoting cooperatives in the economy. These cooperatives were ended when Georgia was annexed into the Soviet Union.[15][16]

In Sweden, the Swedish Social Democratic Party made laws and reforms from 1950–70 to establish more democratic workplaces.[17]

Current approaches

Equity model

In the equity model, employees own voting shares of their company, most commonly through an employee stock ownership plan. The equity model of workplace democracy exists when bottom-up practices, such as participatory management, are combined with the top-down influence provided by their voting rights.[19]

Staff and Worker Representative Congresses

In China, a form of workplace democracy is mandated by law for state-owned enterprises [20] and permitted in non-state-owned collectives and companies. This is done through Staff and Worker Representative Congresses (SWRCs), composed of workers directly elected by all workers in the workplace to represent them. As of the 1980s and 1990s, SWRCs were, in theory, broadly similar to continental European and Japanese workers' workplace councils in terms of rights and powers and consensus building, as opposed to the Anglo-American model "adversarial model" relating management and workers.

Research on workplace democracy

Public opinion

A 2023 study in the United States found that the people surveyed generally support workplace democracy, even in survey experiments where respondents are exposed to question framings that emphasize the costs of workplace democracy.[25]

Management science studies

London Business School chief, Nigel Nicholson, in his 1998 Harvard Business Review paper: "How Hardwired is Human Behavior?" suggested that human nature was just as likely to cause problems in the workplace as in larger social and political settings, and that similar methods were required to deal with stressful situations and difficult problems. He held up the workplace democracy model advanced by Ricardo Semler as the "only" one that actually took cognizance of human foibles.[26]

Effects on productivity

External links

Quotes and other writings on workplace democracy (Chomsky, Wheatley, et al.)
Articles by David Ellerman on workplace democracy
Workplace Democracy and Democratic Ownership—Richard Wolff & Gar Alperovitz at Left Forum, 2013.

References

Renuka Rayasam. Why Workplace Democracy Can Be Good Business U.S. News & World Report, 24 April 2008, retrieved 2021-06-24^
The Case of Marland Mold Center for Learning in Action, retrieved 2018-09-16^
Arie Y. Lewin, Carroll U. Stephens. CEO Attitudes as Determinants of Organization Design: An Integrated Model Organization Studies, 1994

Examples of companies organized by workplace democracy

Mondragon

Marland Mold

Marland Mold was a company started in 1946 in Pittsfield, Massachusetts, by Severino Marchetto and Paul Ferland. The company at first, designed and built steel molds for plastic products throughout the 1950s and 60s. In 1969 the owners sold the company to VCA which was later bought by The Ethyl Corporation. The Marland Mold employees voted to join the International Union of Electrical Workers, because of a dispute that took place over health insurance. The plant's manager started to pay less attention and put less time into the Pittsfield plant so the profits declined. The plant was put up for sale in 1992. The employees ended up buying out the plant, even though they weren't fans of employee ownership before, they needed to save their jobs. There immediately was a burst in production and they were able to produce molds that normally took the 3,000 hours to make in 2,200 hours. They had financial stake in the company now which gave them new motivation for the company's success. The other two ideas that were key components to their success was the education of all members about their new roles, and building an ownership culture within the organization. In 1995, they had officially bought all ownership stock and buyout lenders and the company was completely employee owned. Through all of this employees were also able to gain a broader perspective on the company, like being able to understand others views of different conflicts in the workplace. In 2007, Marland Mold celebrated their 15th anniversary of employee ownership.[2]

In 2010, Marland Mold were acquired by Curtil.[22] In 2017, the Pittsfield plant was shut.[23]

Semco

In the 1980s, Brazilian businessman Ricardo Semler, converted his family firm, a light manufacturing concern called Semco, and transformed it into a strictly democratic establishment where managers were interviewed and then elected by workers. All managerial decisions were subject to democratic review, debate and vote, with the full participation of all workers. This radical approach to management got him and the company a great deal of attention. Semler argued that handing the company over to the workers was the only way to free time for himself to go build up the customer, government and other relationships required to make the company grow. By giving up the fight to hold any control of internals, Semler was able to focus on marketing, positioning, and offer his advice (as a paid, elected spokesman, though his position as major shareholder was not so negotiable) as if he were, effectively, an outside management consultant hired by the company. Decentralization of management functions, he claimed, gave him a combination of insider information and outsider credibility, plus the legitimacy of truly speaking for his workers in the same sense as an elected political leader.[24]

Workplace democracy

Theory

Economic argument

Citizenship argument

Ethical justification

Political association

Current approaches

Equity model

Staff and Worker Representative Congresses

Research on workplace democracy

Public opinion

Management science studies

Effects on productivity

See also

External links

References

Employee power and representation

Examples of companies organized by workplace democracy

Mondragon

Marland Mold

Semco

Mondragon

Marland Mold

Semco

Effects on business longevity

Effects on workers