Professor C.J. Calhoun, in a most stimulating paper (Sociology 14 (3) 1980) has sought to cast doubt upon the effectiveness of what he terms 'democratic' and 'individual-orientated' organizations. In particular he finds himself in disagreement with Bennis and Slater (1968) in their insistence, within a democratically structured organization, on 'full and free communication' amongst organization participants. Professor Calhoun argues forcibly that 'communication' among individuals is not adequate to the conduct of business of even relatively simple organizations and, thus, either formal channels (i.e. hierarchy) or sub-groups are inevitable. Furthermore, since communication (i.e. the generation and transmission of information) is not a costless enterprise, an ordering of priorities for communication is organizationally necessary. I wish to argue that though Professor Calhoun is correct in both these assertions they do not provide sufficient grounds for rejecting the concept of democratic organization. Although Professor Calhoun does not provide us with an explicit definition of what he means by a democratic organization it is, I think reasonably clear that he has in mind something akin either to 'direct democracy' a situation of one participant one vote on all organizationally relevant decisions or a fairly extensive system of representational (or delegate) democracy. Be this as it may, he finds persuasive arguments to show that such structures are at odds with the effective organization. I think it is important, however, to be a little more explicit concerning the principles underlying the concept of a democratic organization. Once these principles are made clear it can, I believe, be shown that hierarchy (i.e. formalized and limited communication channels) and priorities in the transmission and generation of information are both compatible with organizational democracy. But before I embark upon such a venture I think we should keep in sight a very important point originally made by Simon and recently emphasized by O. E. Williamson (1975): it is that organization (i.e. the administrative coordination of exchanges) only becomes necessary because of 'bounded rationality'. In a world of free and perfect information there would be no need for organization at all, all exchanges could be optimally coordinated through the agency of markets. There is, thus, within the very concept of organization itself an implication of information restriction and in a literal sense Bennis and Slater must be wrong and Calhoun right. If we view an organization as a decision-making body concerned to accomplish some goal or goals (there need not be consensus about these) then what are the democratic principles which should underpin the distribution of decision-making amongst the members of the organization? I have set these out more fully elsewhere (Abell 1979) but briefly they are (slightly modified):