To the average chief executive, the idea of a "democratic enterprise" probably falls under "nice on paper, hopeless in practice," rather like stakeholding or being kind to the environment.
Not so, insists Lynda Gratton, author of a new book The Democratic Enterprise and a professor of management practice -- not theory, she says pointedly -- at London Business School. She maintains that democracy is both necessary and do-able.
Although few companies can claim to be perfectly democratic just yet (with the possible exception of Brazil's Semco), elements of democracy can be found in firms such as British Telecom (BT), McKinsey and the oil-giant BP, and Gratton uses them as the context for her studies of, among other issues, individuals who are taking charge of their working lives. She sees her role as both illuminating the path ahead and giving people confidence to test it out.
"There are immense pressures to preserve the status quo," she says. Search most middle managers and you'll find a "right to manage" tattoo somewhere about their person. Much widely applied performance management is simply command-and-control with the edges rounded off.
The lure of the heroic leader, particularly in times of change, is still strong.
So why should companies want to want to think about the tenets of democracy? For good instrumental reasons, Gratton believes. One is demographic. An alarming proportion of today's young people -- Generation X and Y -- are voting with their feet, refusing to replicate what they see as the mistake of their parents in tying themselves to companies that later betrayed them. They are asserting their desire for a different balance by turning their backs on the corporate sector.
A second factor is technology, which is enabling (at least in theory) ever-closer relationships between a firm and its customers -- so why not with employees, Gratton says.
"Firms do lots of things that cost money and benefit neither the firm nor its people -- like forcing them to commute to expensive city offices when they could work at home," she says. "That's poor management -- and poor management not to change it."
There are some powerful performance arguments for democracy, too. By promoting justice and fairness and finding solutions -- such as remote working -- that work for both sides, the democratic enterprise benefits from more engaged employees.
In turn, engaged employees build shared purpose and alignment, creating more agile, adaptive organizations. This is particularly important in times of change and turbulence, and for promoting innovation. Finally, committed employees, confident that they work for a just organization that has their interests at heart, can be the difference between the success or failure of a merger or other large new venture.
Such an inclusive organization overcomes many of the theoretical and practical disadvantages of present-day organizations: the need for complicated incentives and punishments to deter opportunism and align conflicting interests; hierarchy to tell people what to do; and the denial of any moral or ethical dimension of management.
Yet Gratton argues powerfully that justifications for enterprise democracy go well beyond the bottom line. Democracy, she says, "exists for the benefit of its citizens, while also advancing the interests of the institution." The two go together. In a democracy, individuals have the opportunity to become themselves, to flourish and find meaning in working lives governed by choice and shared purpose.
That is important in itself. Yet the implications go wider still. Gratton believes that currently accepted models of state democracy have virtually been reduced to voting for a leader. It is above the level of the individual citizen and a travesty of the real thing.
The "real thing," to the contrary, is engaged participation in daily affairs and decisions in which participants strengthen the institution as they hone their own democratic skills.
The idea of the company as savior of democracy may sound strange, but it is objectively no stranger than the idea that -- with all the technological, physical and philosophical possibilities at their disposal -- companies continue to lock themselves into a single organizational model that condemns them to concentrate on constraining human behavior rather than liberating it, and turns management into an exercise in control and manipulation.
US President Donald Trump yesterday announced sweeping "reciprocal tariffs" on US trading partners, including a 32 percent tax on goods from Taiwan that is set to take effect on Wednesday. At a Rose Garden event, Trump declared a 10 percent baseline tax on imports from all countries, with the White House saying it would take effect on Saturday. Countries with larger trade surpluses with the US would face higher duties beginning on Wednesday, including Taiwan (32 percent), China (34 percent), Japan (24 percent), South Korea (25 percent), Vietnam (46 percent) and Thailand (36 percent). Canada and Mexico, the two largest US trading
ACTION PLAN: Taiwan would expand procurement from the US and encourage more companies to invest in the US to deepen bilateral cooperation, Lai said The government would not impose reciprocal tariffs in retaliation against US levies, President William Lai (賴清德) said yesterday, as he announced five strategies to address the issue, including pledging to increase Taiwanese companies’ investments in the US. Lai has in the past few days met with administrative and national security officials, as well as representatives from various industries, to explore countermeasures after US President Donald Trump on Wednesday last week announced a 32 percent duty on Taiwanese imports. In a video released yesterday evening, Lai said that Taiwan would not retaliate against the US with higher tariffs and Taiwanese companies’ commitments to
CHIP EXCEPTION: An official said that an exception for Taiwanese semiconductors would have a limited effect, as most are packaged in third nations before being sold The Executive Yuan yesterday decried US President Donald Trump’s 32 percent tariff on Taiwanese goods announced hours earlier as “unfair,” saying it would lodge a representation with Washington. The Cabinet in a statement described the pledged US tariffs, expected to take effect on Wednesday next week, as “deeply unreasonable” and “highly regrettable.” Cabinet spokeswoman Michelle Lee (李慧芝) said that the government would “lodge a solemn representation” with the US Trade Representative and continue negotiating with Washington to “ensure the interests of our nation and industries.” Trump at a news conference in Washington on Wednesday announced a 10 percent baseline tariff on most goods
‘SPECIAL CHANNEL’: Taipei’s most important tasks are to stabilize industries affected by Trump’s trade tariffs and keep negotiations with Washington open, a source said National Security Council Secretary-General Joseph Wu (吳釗燮) arrived in the US for talks with US President Donald Trump’s administration, a source familiar with the matter said on Friday. Wu was leading a delegation for a meeting known as the “special channel,” the Financial Times reported earlier. It marked Trump’s first use of the channel since returning to the White House on Jan. 20. Citing a source familiar with the matter, the Financial Times reported that Minister of Foreign Affairs Lin Chia-lung (林佳龍) was also a part of the delegation. The visit came days after China concluded war games around Taiwan and amid Trump’s