The limits of organizational democracy

Abstract

Executive Overview Despite decades of encouragement from theorists and consultants, managers have generally not embraced democratic process as a system of management and decision-making in organizations. While it is tempting to explain this state of affairs in terms of managers' reluctance to share power, this article considers the possibility that democracy's limited success is due to its own limitations as a system of organizational governance. The article questions two common assumptions: (a) that political democracy provides a useful model for organizational democracy, and (b) that democratic process is applicable in all organizations. Close analysis suggests that political democracy provides little guidance for organizational democracy because its essential characteristics—accountability to the governed, right of participation, free exchange of information, and right of representation—are rarely, if ever, supported in organizations. Furthermore, the basic function of political democracy—legitimization of authority—has no counterpart in organizations. As for applicability, the article argues that democratic process can only be successfully implemented where it contributes significantly to competitive advantage and organizational performance. This depends on several contingency variables, including the nature of the organization's products and services, the characteristics of its workforce, and the degree of hierarchical resistance to redistribution of power and control.