The vision of democracy derives from the Greek words “demos” and “kratein” which translates to the “rule of the people.” It is an important concept that believes everyone should have an equal say in a particular decision. In management it translates to a democratic style of leadership where the manager still holds final responsibility for decisions but also delegates authority to the team by encouraging them to contribute, give suggestions and challenge the ideas of the manager (Pride, Hughes, et al, 2009). This type of management, also referred to as participative leadership, encourages employees to discuss the issues and find alternatives to problems a manager may be facing (Gitman & McDaniel, 2008). The principle role of the Manager is to utilize the resources within an organization as efficiently as possible to achieve the organization’s goals. The way in which they achieve depends greatly on many factors such as the organizational model of the company, the industry it operates in and the overall organizational culture. The traditional models of decision-making have appeared to be over ruled by a new democratic culture. In today’s complex business environment, democratic decision-making is an appropriate strategy that can improve the quality and effectiveness of an organizations management for a variety of different reasons that will be explored.
Firstly, it is important to address the disadvantages of democratic decision-making. One apparent difficulty that undermines successful management is that the decision making process can be very time consuming and draw the focus away from the core work. Too much consultation time can significantly decrease productivity and cause the business to underperform. Tannenbaum and Schmidt (1958, 1973) suggest that the extent to which leaders use autocratic or democratic leadership depends on the circumstance. They concluded that a democratic leadership style is less appropriate when there are time constraints and the manager needs to make a quick decision. This evidence suggests that when a manager is under a lot of pressure, for example in a crisis, he/she should avoid making decision democratically as it is too time consuming and an opportunity to react may be missed.
Another drawback of democratic decision-making is that it only works well with highly trained professionals (Gitman & McDaniel 2008.) The employees need to be highly experienced to understand the processes before they can begin to participate in decisions. If not, the manager will be wasting time collecting the employee’s amateurish ideas where instead he could have made the more appropriate decision initially. More often then not, the manager leading the employees will be the most experienced in the field so it would appear the most logical to appoint him as the sole person with the responsibility to make a decision. A successful manager knows when to draw the line between democracy and autocracy in order to make the more important decisions. It is far too risky to implement the participative style of leadership for the important decisions where there is a high risk of failure. This applies to small business start-ups where the manager has to take an autocratic role in order to give the business direction. In this example, the few sub-ordinates in a star-up should have less say in what goes on as the entrepreneur is the sole person who holds the vision of the firm and should make the decisions for the business.
However, there are many positives that democratic decision making has to offer. One of the most important responsibilities of the manager is to be as efficient as possible with the available resources. Employees are arguably the most important resource and their motivation has an enormous impact on the effectiveness and quality of work, which has a direct impact on the overall company performance. A recent study by The Gallup Organization publicized that only 21% of employees in the global workforce...
Please join StudyMode to read the full document