Academic journal article Journal of Positive Management

Employee Participation in Management . Case Study of a Democratic Organization - Mondragón Corporate Cooperativa

Academic journal article Journal of Positive Management

Employee Participation in Management . Case Study of a Democratic Organization - Mondragón Corporate Cooperativa

Article excerpt

1. Introduction

The purpose of this article is to present a case study of one of the world's most famous democratically governed organizations- Mondragón Corporate Cooperativa (MCC) localized in the Basque Country in Spain. The analysis is based on the experience and knowledge gained by the author of this article during half-year research stay in the MCC, which was a great opportunity to make many observations of democratically managed organization and conduct dozens of interviews with employees and retired members of the cooperatives. Additionally, the present case study is supported by the literature review of theories of participatory management and democracy at the workplace, on which the organizational system in Mondragón is based. The analysis shows how the company is designed and how it is organized in order to allow all employees to participate in everyday management: in decision making, in setting organizational goals, in the process of employing new members and choosing the representatives of the company, to name just a few. Criticism of such approach together with some problems identified in MCC and their mechanisms already described in the literature are also provided.

2. Literature review

The idea of a key role of democratic rules in the organizational world has a long and turbulent history. However recently, over the last 20-30 years, distribution of power in the organization has become remarkably popular (Butcher and Clarke, 2002). Growing interest in democratic practices, based on classic works of McGregor (1960) and Maslow (1954), is visible not only in the current scientific literature, but also in organizational practices both abroad (e.g. Erdal, 2008; Stack and Burlingham, 1994; Seniler, 1998) and in Poland (e.g. Blawat and Drobny, 2011).

According to Butcher and Clarke (2002) democratic organizations can be described by decentralization of authority and shared responsibility, which leads to the development of smaller, self-organizing, autonomous units within the organization. It is also reported that employees of democratic organizations have the sense of psychological ownership (Pierce et al., 2001) with respect to organizational activities that depend on their individual contribution and knowledge (Butcher and Clarke, 2002). However, above all, traditional theory of democracy presupposes a broad and direct participation of the community members in the social system (Dachler and Wilpert, 1978).

The concept of the employee participation in management may take many forms - starting from more generic solutions, such as employee ownership, ending on single practices, such as information sharing. Neither participation in management, nor democracy in the organization are zero-one phenomenon (Rivera-Batiz and Rivera-Batiz, 2002). Participation as a multidimensional concept was also argued by Cotton et al. (1988), who distinguished several types of participation in the organization: representative, consultative, short-term, informal participation, participation in decision making and employee ownership. When those types of participation were compared in terms of their effectiveness, it turned out that they produce different results. This conclusion could explain why there are so many conflicting results of different studies on participation effectiveness. Thus, some reports claim the positive impact of participation on job satisfaction, productivity, and other dimensions of performance (e.g. Mohr, 1977), others - the opposite - the absence of such influence (e.g. Lischeron and Wall, 1975). Cotton et al. (1988) pointed out that, for example, informal participation and employee ownership, as opposed to short-term participation, are effective both in terms of job satisfaction and productivity. Representative participation, however, does not increase productivity, but increases employee satisfaction.

Discussing short-term participation, it is worth mentioning that often isolated acts of promoting employee participation in organizational processes are used to bring closer traditionally managed organizations towards more democratic ones. …

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