New Prospects for Organizational Democracy? How the Joint Pursuit of Social and Financial Goals Challenges Traditional Organizational Designs

Some interesting exceptions notwithstanding, the traditional logic of economic efficiency has long favored hierarchical forms of organization and disfavored democracy in business. What does the balance of arguments look like, however, when values besides efficient revenue production are brought into the picture? The question is not hypothetical: In recent years, an ever increasing number of corporations have developed and adopted socially responsible behaviors, thereby hybridizing aspects of corporate businesses and social organizations. We argue that the joint pursuit of financial and social objectives warrants significant rethinking of organizational democracy’s merits compared both to hierarchy and to non-democratic alternatives to hierarchy. In making this argument, we draw on an extensive literature review to document the relative lack of substantive discussion of organizational democracy since 1960. And we draw lessons from political theory, suggesting that the success of political democracy in integrating diverse values offers some grounds for asserting parallel virtues in the business case.