The Company Democracy Model

Creating Innovative Democratic Work Cultures for Effective Organizational Knowledge-Based Management and Leadership

Evangelos Markopoulos, Hannu Vanharanta

• Publisher: Productivity Press
• Year: 2022
• ISBN:
  9781000484687
• Edition: 1
• Topic: Business
• Subtopic: Workplace Culture
• Index: Business

Company democracy is often misunderstood in the business context as democracy is usually related to politics. In this book, the authors present a different dimension. They focus first on democracy from an organizational culture perspective and then offer employees opportunities to understand and apply democracy from the company floor level.

The Company Democracy Model (CDM) is an industry-wide, practical methodology for knowledge management utilization under applied philosophical thinking. The model progresses through a framework in which an organizational evolutionary spiral method empowers the creation of knowledge-based democratic cultures for wise and effective strategic management and leadership. This new innovative methodology, supported with techniques and processes, can gain/create many ideas, insights, innovations, new products, and services that can benefit a company.

One purpose of using the model is to create a robust conceptual framework as a theoretical basis for a business strategy that promotes sustainable, continuous, and democratic development. Another purpose is to emphasize the importance of intellectual capital and compare capital-related and human-related business issues in shaping a company's competitiveness, profitability, productivity, performance, and shared value. A third purpose is to use its symbolic infrastructure that builds solid democratic systems for viable business development and management. Finally, the described purposes give the reader new ideas to change and improve the design of business activities in a collective and modern democratic way.

1 APPLIED PHILOSOPHY

Chapter 1 Science and Theory Precede Practice: A Scientific Framework for the Applied Philosophy Approach in Management and Leadership

DOI: 10.4324/9781003158493-2

Executive Summary

Humans must be in focus when companies improve their business productivity, profitability, and performance. The Applied Philosophy approach in Management and Leadership places humans in the company context as living entities aligned with Business Management and Leadership Objects in the conscious experience of the company workforce. Starting from the Hellenic philosophy and drawing on more modern philosophies relevant to everyday business, the Applied Philosophy approach in Management and Leadership can harness business ontologies, taxonomies, classes, and other knowledge classification techniques to create added value in companies. New theories, approaches, and practices can be generated by interpreting knowledge from the Delphic Maxims as the basis for many new and alternative management and leadership objectives. The Holistic Concept of Man and the Circles of Mind metaphors open up the human mind and redefine Situationality by giving unique, alternative ways to understand how humans, as decision-makers, behave in a company context. This chapter introduces the Applied Philosophy approach for management and leadership and provides the philosophical background needed to better understand the Company Democracy Model.

1.1 Introduction

For a long time, creating a democratic company culture has been regarded as ideal for companies that try to achieve harmony in management and leadership. Over time, this ideal has come closer for many business people and company executives searching for a democratic company culture that can be applied in practice. Bennis and Slater wrote two articles for the Harvard Business Review Classic series, which claim that democracy is inevitable as it has solid fundamental effects in societies (Slater, Bennis, 1990). They describe democracy as the only system that can successfully manage contemporary civilization’s changing business and government demands. They also see that democracy contains the ability to prosper and provides a fresh and modern way to survive in a continuously changing society.

Bennis and Slater provide many examples of companies moving toward democratization and consider this progress to be based on a system of values, such as the following: (1) full and free communication (regardless of rank and power); (2) a reliance on consensus (rather than coercion or compromise when managing conflicts); (3) the idea that influence is based on technical competence and knowledge (rather than on the vagaries of personal whims or prerogatives of power); (4) an atmosphere that permits and even encourages emotional expression (as well as task-oriented behavior); (5) a fundamental human bias (one that accepts the inevitability of conflict between organizations and the individual, but is willing to cope with and mediate this conflict on rational grounds) (cf. Slater, Bennis, 1990).

Applying such values to an ordinary business world can be complex and problematic. The main point is that companies have to create a democratic company culture first, which will help their employees behave democratically after that. Leaders must perceive, interpret, understand, and internalize the democratic company culture before applying it in the organization. Likewise, employees must first learn what democracy means and how to use it in their daily activities.

Democracy in a business context does not have to be an ideological concept. It can only be a way of working together by sincerely respecting one another. Respect is an easy way to communicate because it effectively allows everyone to share visions, ideas, knowledge, and solutions democratically. The practical meaning of democracy must be understood at all company levels, outside the business world, and throughout society.

The system of values that forms the basis of democratization in Bennis and Slater’s description is connected partly to the systemic view of a living system (Miller, 1978). Their reports raise many how-do-you-do-it (implementation) questions, such as:

• How do you keep the system in operation through full and free communication, regardless of rank and power?
• How do you reach and improve the reliance on consensus in the decision-making process?
• How do you appreciate how technical competence and knowledge can influence change without any whims or prerogatives of power?
• How do you encourage people to express their emotional intelligence and their task-oriented behavior?
• How do you minimize the inevitable conflict between organizations and individuals? (cf. Slater, Bennis, 1990)

According to Bennis and Slater, democracy is the only organizational system compatible with perpetual change (Slater, Bennis, 1990). All the values that characterize an organization are based on individual behavior. Therefore, this chapter starts by regarding the human being as a holistic system in a situation. According to Rauhala, human beings can be described through a metaphor, viz., the Holistic Concept of Man (HCM) (Rauhala, 1995), and can be regarded as a living system within another living system, i.e., a living company or organization (Miller, 1978, Samuelson, 1978, Osterlund, 1994, Markopoulos, Vanharanta, 2015). Therefore, this chapter presents how basic democratic principles and other essential democratization issues are applied to various organizations and companies. It also explores how management and leadership used in philosophy can support the practical description of the Company Democracy Model (CDM). The CDM is the first outcome of the Scientific Framework of Applied Philosophy in Management and Leadership. Other results presented in this chapter are based on the above fundamental principles.

1.2 Creation of the Scientific Framework

The scientific framework covers the general areas of ‘Episteme,’ ‘Sophia,’ ‘Techne,’ and ‘Phronesis.’ It applies various sciences, creates a robust theoretical framework based on different management and leadership theories, uses available technical experience and skills, and produces, in the end, a practical understanding of democratic business management and leadership.

1.2.1 Scientific Background (‘Episteme’)

Episteme provides the creation of a solid, human-focused base to exploit the knowledge that derives from ...

Table of contents

• Cover
• Half-Title
• Series
• Title
• Copyright
• Dedication
• Contents
• List of Figures
• List of Tables
• Preface
• Acknowledgments
• Authors
• Book Structure
• SECTION 1 APPLIED PHILOSOPHY
• SECTION 2 HUMAN FOCUS IN LIVING SYSTEMS
• SECTION 3 THE COMPANY DEMOCRACY MODEL
• Conclusions
• Glossary
• Index