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2019 | OriginalPaper | Chapter

4. Organizational Autocracy: How the Democratic Wave Passed Over the Organization

Author : Ivan Hilliard

Published in: Coherency Management

Publisher: Springer International Publishing

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Abstract

This chapter deals with the autocratic nature of most firm’s decision-making processes. It highlights the advantages of a more participative decision-making process for any organization that wishes to behave in a more responsible manner, as well as the risks of continuing a top-down imposition of something that cannot genuinely be forced on people. At the same time, it outlines the parameters of this democratizing process and explains why it needs to be limited. It finishes by explaining why such an approach meets the coherency conditions introducing in Chapter 2.

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previous chapter The Interdependent Business: Understanding Value Creation

next chapter Stakeholder Politics: Why Knowing More Can Also Mean Doing Less

Following Rupp et al. (2006), we will consider employees as the non-management workforce.

A line from the song Democracy (1992) by Leonard Cohen. Whether or not the late great artist was right, his prophecy is unlikely to be applied to the world of business anytime soon.

For some, the concept of corporate democracy is closely related to types of ownership and the support of employee-owned firms, cooperatives, and other similar models (Hansmann and Hansmann 2009; Lafferty 1984; Viggiani 2011). While coherent arguments are made for the need to combine an internal participatory model with an equally participatory ownership model, the focus here is on how existing organizations should manage their social responsibilities in the twenty-first century. The issue of ownership is beyond the scope of this work.

It is no secret that one of the weaknesses of the European Union has been its difficulty in justifying its huge decision-making capacity, when many of its most senior decision-makers are either unelected, or indirectly elected. A series of initiatives have been suggested and rolled out to try to remedy the situation. See, for example, the European Citizens’ Initiative (European Commission, n.d.).

This refers to direct participation, rather than indirect participation, which is often carried out by workers’ councils or trade unions. Also it is more linked to working conditions rather than strategic and tactical decision-making (Cotton et al. 1988).

This increased need for more specialization may be interpreted by some managers as a threat to their power and authority, due to a regularization in knowledge levels (Sagie 1997). However, this is more an indication that the arguments upon which some of their perceived authority rests are no longer valid.

This is particularly true, although not limited to, large multinational companies with a presence in many markets and dealing with a complex and extended value chain.

In the context of this work, what is being considered is the way in which employees at all levels of the company can effectively and coherently make their organization a truly responsible one. The first point, when applied to coherent responsible management, doesn’t refer to whether or not a company should have a CSR manager, but rather to the illogical idea that this person will be able to build a responsible organization from the top down and that employees can be obliged to respond (James 2000).

Even these basic responsibilities seem too much for large portions of the population. The Voter Turnout Database from the International Institute for Democracy and Electoral Assistance, with data on parliamentary elections in 200 countries since 1945 (or later according to whenever each country made a transition to a democratic system) records a global average of 66.42% turnout among registered voters (International IDEA, n.d.).

In this sense, limitations on participation across business units would be likely to be the norm, as would limitations depending on whether decisions were more political and strategic or socio-technical and tactical.

This is an organizational imperative if coherency condition #2 is to be met, whereby the properties that form part of the organizational whole should each reflect the responsibility stance claimed by that organization. This applies to all employees, as knowledge does not simply reside in the higher echelons of the workplace (Johnson 2006). Additionally, this last point undermines moral justification for an authoritarian organizational status quo.

This is true in the opposite direction, in that those seeking employment should seek out organizational candidates who match their worldview and share their concerns for doing business in a responsible manner.

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Title: Organizational Autocracy: How the Democratic Wave Passed Over the Organization
Author: Ivan Hilliard
Publisher: Springer International Publishing
Book: Coherency Management
Print ISBN: 978-3-030-13522-5

Electronic ISBN: 978-3-030-13523-2

Copyright Year: 2019
DOI: https://doi.org/10.1007/978-3-030-13523-2_4