Participative Management refers to as an open form of management where employees are actively involved in the organization’s decision making process. Participative Management can also be termed as ‘Industrial Democracy’, ‘Co-determination’, ‘Employee Involvement’ as well as ‘Participative Decision Making’. The concept is applied by the managers who understand the importance to human intellect and seek a strong relationship with their employees. They understand that the employees are the facilitators who deal directly with the customers and satisfy their needs. Involvement of employees and other stakeholders who will be influenced by management decisions in helping to make those decisions. Participative management can increase employee commitment to an organization's goals at the same time it offers fresh insights into how the organization can become more effective. The idea behind employee involvement at every stage of decision making is absolutely straight. Open and honest communication always produces good results both for organization as well as workers. Freedom and transparency in company’s operations take it to the next level and strengthens the basis of the organization. On the other hand, there are several companies that straightway rule out the possibility of participative decision making process. According to them, employees misuse their freedom of expression and participation in decision making as it provides higher status to employees and empowers them. However, there are many companies who have embraced this particular style of management and are now getting positive results. Toyota is the best example. The company has been following suggestion schemes and employee involvement procedures for over a decade now. The management receives almost 2,000,000 suggestions and ideas every year and around 95 percent of these are implemented by the company. Who is not aware of Toyota’s success rate? Around five thousand improvements per year have made Toyota one of the fastest growing organizations globally. The need is to develop and implement a comprehensive company policy and everything works well. Employee participation at each level of decision making process is not at all harmful if managed efficiently. The whole process can be well coordinated and controlled by the sincere and honest efforts of human resource managers.
2. Concepts of Participative Management:
The traditional logic of organizing is to give simple work to employees at the bottom of the pyramid who then report through a supervisor up a hierarchical chain of command to senior executives who provide direction, coordination, and control. This does not work well for organizations managing knowledge intensive tasks. As the number and visibility of high knowledge-based organizations increases, the need for a “new logic” of management has gained currency among both academics and managers (Lawler 1996; Beer et al. 1990; Case 1998). Lawler (1996:22) summarizes some of the principles of this new logic, as shown in Table 1 Old Logic Principle| New Logic Principle|
♦ Organization is a secondary source of competitive advantage| ♦ Organization can be the ultimate competitive advantage| ♦ Bureaucracy is the most effective source of control| ♦ Involvement is the most effective source of control| ♦ Top management and technical experts should add most of the value| ♦ All employees must add significant value| ♦ Hierarchical processes are the key to organizational effectiveness| ♦ Lateral processes are the key to organizational effectiveness| ♦ Organizations should be designed around functions| ♦ Organizations should be designed around products and customers| ♦ Effective managers are the key to organizational effectiveness| ♦ Effective leadership is the key to organizational effectiveness| There are five different perspectives and rationale for workers participation in organizations: A) The...