Some behavioral perspectives on the dominance of hierarchical over democratic forms of enterprise

Abstract

This paper explores possible reasons why ‘participatory’ modes of organization, whole potentially viable and preferable to ‘hierarchical’ modes for a large majority of workers, may be dominated by the latter in capitalist market economies. After exploring the developmental preconditions for the evolution of a mature ‘participatory’ mode, using a behavioral approach to organizations, it is suggested that since the interest of those possessing scarce managerial skills may lie with ‘hierarchical’ firms, a ‘participatory’ sector may be uncompetitive unless rights to enter labor contracts are redefined. Thus, the analysis offers a partial explanation of the political nature of the demand for workplace democracy.