Exploring limits of Organisational Democracy

The rigid managerial hierarchy in organisations though persistent through centuries, does struggle during complex non–routine problems. Emergence of team–based operating groups called Self managing organisations that function on a horizontal basis rather than vertically bureaucratic hierarchies cater to the dynamic working conditions of modern–day organisations. The article outlines the difference between radical versus incremental efforts to organize less–hierarchically which was absent in prior research because of its wideness and assorted form. It has methodologically approached three categories of self managing organisations namely Post–bureaucratic organisations, Humanistic management and Organisational democracy based on common traits, levels of analysis and closely related outlook. It also examines the limits to less–hierarchical organizing, simultaneously reviewing real life working models of self managing organisations like those of Zappos, Morning Star and Valve.

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Viewing organisational democracy in self–managing organisations at meso level, employee management and firm level management of an organisation both come under the radar. Management is affected by employees’ level of empowerment, participation in decision making and interpersonal skills(Lee & Edmondson, 2017). Provisions of such facilities have a great impact on employees in terms of their efficiency and fertility. “When employees have stake in the organisation–when they have clear rights of participation and control–their intellectual capital and productive energy are released to be focused on productivity and the economic success of the organisation” (Sauser, 2009).This shows, involvement in operations of a democratic firm gives a sense of belongingness and positivity to the workers.

But, do giving decision making rights to team of employees make them responsible for the outcomes? According to(De Leede, Nijhof, & Fisscher, 1999), “transfer of authority to self managing teams is not enough to make them accountable; a set of preconditions needs to be determined, apart from delegation of authority”. Obviously, any such preconditions are not mentioned in (Lee and Edmondson, 2017) article. If decentralisation of authority is to be taken sincerely, team authority requires a  concerted mindset and apt organisational factors(De Leede et al., 1999). Also, how much power is given to the employees under democracy and who decides the appropriateness of this power? (Lee & Edmondson, 2017) explains that scholars under organisational democracy disagree on how much authority must be delegated so as qualify as democratic. Clearly, the article fails to provide appealing evidence in this case.

In recent years, organisational democracy as a substitute for less–hierarchical organising has lost its essence. (Battilana, Fuerstein, & Lee, 2018) claims that organisational democracy’s merits compared to hierarchy relatively lack substantive discussion since 1960; which means other alternatives to hierarchical organising are more intriguing among researchers. Big market economies nowadays, focus more on increasing their financial outcomes rather than democratic organising. As (Battilana et al., 2018) says that,” other alternatives to hierarchy emphasize on individualistic values of autonomy and empowerment. In contrast, organisational democracy emphasizes the collective”. Employee autonomy among  market economies is very common.

The article has focused on a cooperative company–Mondragon, which is known as the oldest and best working example of organisational democracy.(Francisco Javier, 2005) mentions “that most of the Mondragon’s success is organisational, not ideological and many of its elements can be extended in two spheres: (1) improving the democratic practices in singular organisations and (2) developing medium business groups of small and medium–sized founded on democratic principles”. Mondragon as a cooperative has been a successful organisation and practitioner of democracy but this type of organising is generally done in smaller groups. It becomes ambiguous on larger scale .Also, Mondragon follows the structure of democratic organising, it is observed in Lee and Edmondson’s article that it has a federal structure that governs the organisation and elections are held at each level to choose representatives for the higher level which means though not on the permanent basis but it practises organisational hierarchy temporarily.

The article addresses the issue that organisational democracy does not accurately capture the distinction between radical and incremental approaches to less–hierarchical organising. Radical approaches differ from incremental in how much authority they decentralise(Lee & Edmondson, 2017). Talking about the working models of self managing organisations discussed in the article like Valve, which qualifies as a self managing organisation because it allows its employees to decide the game they want to choose, which implies that employees have freedom and autonomy to choose what they want to work on, whereas the underlying principles of democratic organising are interdependence and reliance of employees on each other. Moreover, as the writers mention in the article, informal influence of some employees interferes with the choice of projects on which the team wants to work. This shows that self managing organisations fail in implementing organisational democracy throughout the organisation. Also, other market based organisations like Zappos and Morning Star give their employees independence to work in teams without any actual manager–subordinate relationship, but these are not considered as democratic because all the decisions taken by the members are within the financial constraints and authority is not equally decentralised throughout the organisation(Lee & Edmondson, 2017).

In conclusion, self managing organisations fail to adopt the idea of organisational democracy entirely. Democracy as a fundamental system of organising has become vague from past few years. Accountability among employees comes if they follow a set of rules required to run an organisation and have a collective mindset. Mondragon as a cooperative company has tried to implement organisational democracy but that cannot be fully achieved on a large scale. Moreover, democratic organising fails to determine the difference between radical and incremental approaches to less–hierarchical organising appropriately. Even, democracy cannot be assessed conventionally in three existing models categorized as self managing.

References

Battilana, J., Fuerstein, M., & Lee, M. Y. (2018). New Prospects for Organizational Democracy? How the Joint Pursuit of Social and Financial Goals Challenges Traditional Organizational Designs. In S. Rangan (Ed.), Capitalism Beyond Mutuality?: Perspectives Integrating Philosophy and Social Science (pp. 256-288): Oxford University Press

De Leede, J., Nijhof, A. H. J., & Fisscher, O. A. M. (1999). The myth of self-managing teams: a reflection on the allocation of responsibilities between individuals, teams and the organisation. Journal of Business Ethics, 21(2-3), 203-215.

Francisco Javier, F. (2005). Democracy, Cooperation and Business Success: The Case of Mondragón Corporación Cooperativa. Journal of Business Ethics, 56(3), 255.

Lee, M. Y., & Edmondson, A. C. (2017). Self-managing organizations: Exploring the limits of less-hierarchical organizing. In (Vol. 37, pp. 35-58).

Sauser, W. (2009). Sustaining Employee Owned Companies: Seven Recommendations. Journal of Business Ethics, 84(2), 151-164. 10.1007/s10551-008-9679-2