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Workplace democracy is the application of democracy in all its forms (including voting systems, debates, democratic structuring, due process, adversarial process, systems of appeal) to the workplace.
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Most unions have democratic structures at least for selecting the leader, and sometimes these are seen as providing the only democratic aspects of work. However, unions are not everywhere, and 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.
However, some unions have historically been more committed to it than others. The Industrial Workers of the World pioneered the archetypal workplace democracy model, the Wobbly Shop, in which recallable delegates were elected by workers, and other norms of grassroots democracy were applied. This is still used in some organizations, notably Semco and in the software industry.
The best known and most studied example of a successfully democratic national labor union in the United States are the United Electrical, Radio and Machine Workers of America, known throughout the labor movement as the UE. An independent trade Union, the UE was built from the bottom-up, and takes pride in its motto that "The Members Run This Union!".
Industrial and organizational psychology and even more formal management science has studied the methods of workplace democracy. They are just that—methods—and do not imply any particular political movement, agenda, theory, or ideology: There are many management science papers on the application of democratic structuring, in particular, to the workplace, and the benefits of it. One such international study of more than 50 different democratic companies discovered that a minimum of six specific organizational components (including political, economic, psychological and juridical processes) were all equally necessary if the democratic functioning of management systems was to last over the long term.
Benefits often are contrasted to simple command hierarchy arrangements in which "the boss" can hire anyone and fire anyone, and takes absolute and total responsibility for his own well-being and also all that occurs "under" him. The command hierarchy is a preferred management style followed in many companies for its simplicity, speed and low process overheads.
The anarchist thinker Pierre-Joseph Proudhon raised workplace democracy in What is Property? Or, an Inquiry into the Principle of Right and of Government arguing that management "must be chosen from the workers by the workers themselves, and must fulfil the conditions of eligibility." He repeated this call in later works like General Idea of the Revolution and used the term "industrial democracy" in the 1850s to describe it.
20th century pioneers of workplace democracy include the early Belgian advocates of syndicalism who argued that workers had more knowledge but less control of the workplace than they had of major political decisions (where they at least had a vote and the right to be heard even if they knew nothing about the situation). Of these theorists the most influential, de Paepe, is often considered as a peer or competitor to Karl Marx's concept of the workplace as merely a cauldron and test for the proletariat.
However, workplace democracy theory closely follows political democracy, especially where businesses are large or politics is small:
Spanish anarchists, Mohandas Gandhi's Swadeshi movement, farm and retail co-operative movements, all made contributions to the theory and practice of workplace democracy and often carried that into the political arena as a "more participatory democracy." The Green Parties worldwide adopted this as one of their Four Pillars and also often mimic workplace democracy norms such as gender equity, co-leadership, deliberative democracy applied to any major decision, and leaders who don't do policy. The Democratic Socialist Parties have always supported the notion of workplace democracy and democratically controlled institutions.
In Sweden, the Social democratic Party made laws and reforms from 1950-70 to achieve more democratic workplaces. Giving the unions a right to balance the management and have some influential power was rather radical at that time.
Politically, Salvador Allende inspired a large number of such experiments in Chile before his death on September 11, 1973. The book Brain of the Firm by Stafford Beer details experiments in workplace feedback that exploited systems theory extensively.
Many organizations began by the 1960s to realize that tight control by too few people was creating groupthink, turnover in staff and a loss of morale among qualified people helpless to appeal what they saw as misguided, uninformed, or poorly thought out decisions. Often employees who publicly criticise such poor decision making of their higher management are penalized or even fired from their jobs on some false pretext or other. The comic strip Dilbert has become popular satirizing this type of oblivious management, the icon for which is the Pointy Haired Boss, a nameless and clueless social climber. The Dilbert principle has been accepted as fact by some.
Much management philosophy has focused on trying to limit manager power, differentiate leadership versus management, and so on. Henry Mintzberg, Peter Drucker and Donella Meadows were three very notable theorists addressing these concerns in the 1980s. Mintzberg and Drucker studied how executives spent their time, Meadows how change and leverage to resist it existed at all levels in all kinds of organizations.
Adhocracy, functional leadership models, and reengineering were all attempts to detect and remove administrative incompetence. Business process and quality management methods in general remove managerial flexibility that is often perceived as masking managerial mistakes, but also preventing transparency and facilitating fraud, as in the case of Enron. Had managers been more accountable to employees, it is argued, owners and employees would not have been defrauded.
The Mondragon Cooperative Corporation is the largest worker cooperative in the world, and as such the largest corporation that operates some form of workplace democracy. The Marxian economist Richard D. Wolff states it is "a stunningly successful alternative to the capitalist organization of production."
Managerial grid models and matrix management, compromises between true workplace democracy and conventional top-down hierarchy, became common in the 1990s. These models cross responsibilities so that no one manager had total control of any one employee, or so that technical and marketing management were not subordinated to each other but had to argue out their concerns more mutually. A consequence of this was the rise of learning organization theory, in which the ontology of definitions in common among all factions or professions becomes the main management problem.
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.
Ricardo Semler, in his own book Maverick, explained how he took his family firm in Brazil, a light manufacturing concern called Semco, and transformed it into a strictly democratic firm where managers were interviewed and then elected by workers, where all decisions were subject to democratic review, debate and vote, and where every worker was expected to justify themselves to their peers. This radical approach to total quality 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 literally 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. 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.
The book ends with twenty pages of cartoons that constitute Semco's only employee manual. They explain such things as the company's attitudes to women and their advancement, managers and their role, sales and operations, technology, and read somewhat like the rationale of a nonprofit or political party.
Nicholson's analysis was more academic and conventional and focused on many other detailed problems of human behaviour and dispute resolution, which he claimed Semler had resolved.
Venezuela has instituted worker-run "co-management" initiatives in which workers' councils are the cornerstone of the management of a plant or factory. In experimental co-managed enterprises, such as the state-owned Alcasa factory, workers develop budgets and elect both managers and departmental delegates who work together with strategists on technical issues related to production.
A more political approach to workplace reforms was advocated in Closing The Iron Cage: The Scientific Management of Work and Leisure by Canadian sociologist Ed Andrew based on Max Weber's notion "that the spirit of capitalism envelopes our activities like an iron cage, that the ubiquitous structure of technical rationality appears as an iron cage to those who live in it."
Andrew asks provocative questions such as:
Andrew argues that both the political left and the right accept the thesis of "leisure-as-compensation" and that most issues between unions and "management" are too narrowly framed. Andrew in particular believes that scientifically managed leisure is "the closing of an iron cage of technological rationality" on all human life. In other words, a technological escalation not just in the workplace but also imposed by the need to use communications, transport, and other technologies to get to work, learn, do the work itself, and justify the work afterwards. New technologies take time to learn and to use, and that time is taken away from either real work, or leisure.
The growth of scientific management in the industrial work force, and the consequences of that growth for how workers spend their leisure time, according to Andrew, combine to create a false idea of workplace efficiency. His critique is similar to that used to justify throughput accounting: overfocus on human labour is counter-productive since more and more minute divisions of labour deny workers' intelligence and creativity at work, destroys their ability to enjoy their time away from work, and puts them always at risk of losing opportunities simply for experimenting, thinking or dreaming on the job. An undemocratic workplace cannot be substituted by "more, and more enjoyable, leisure" if "boring and denigrating work" that alienates the individual—a key concern of Marx's sociology—remains the daily norm.
He counters pseudo-"conservative claims by efficiency experts that productivity is greatest when individual initiative is minimized" which is exactly the opposite of the ideal preached for entrepreneurship.
He presents his own model, workers' self-management, which he claims "would give all workers the same ability to create their jobs and to mingle leisure and work", as a radical alternative to both scientific management and technocratic socialism. His economic and organizational framework he intends to provide a unity of meaningful work and leisure.
His model parallels that of Amartya Sen who argued in his 1999 Development as Freedom that the goal of all sustainable development must be the freeing of human time. But while Sen addresses the interface between the workplace and leisure-place, Andrew addresses freedom within the workplace.
Many of Andrew's ideas were echoed by companies during the dotcom boom during which many experiments in combining work and leisure were launched, but mostly applied only to higher level creative workers such as software developers, not to people doing more routine work.