Are leadership and democracy truly compatible?

Can true democracy really be practiced in a business? Would one employee – one vote make it possible not only to run a company but also make sure it’s profitable? Definitely, if you are a small jointly owned company. But how about a huge multinational with say, 250,000 employees?

leadership, democracy, company, government

Is democratic leadership that makes everybody happy just an illusion?

Imagine if all employees had to vote before a decision was made. Everybody would be looking after number one and the company would not only be ungovernable but lose money as well.

Fair decisions based on dialogue

Different stake holders having their say and aiming for fair and emphatic decisions based on dialogue is definitely not only possible, but already practised in a multitude of companies.

Democracy – next fad in leadership theories?

With all the current emphasis on empathy in leadership I can’t help wondering if democratic leadership will soon become fashionable? The timing is right because many employees feel they have been badly treated by management during the economic crisis.

Leaders are solely responsible

As a leader you are responsible to the board, share holders and all employees. There are no excuses for chosing the wrong path. You, and only you, are accountable and pay the price if your decisions fail. Or as President Truman put it, the buck stops with you.

Show me a truly democratic government

In all democratic countries politicians are elected because they promise the electorate they will do X,Y and Z. However,  once in power they frequently proceed with doing something else. Sometimes because they discover that what they would like to do isn’t possible for, usually, financial or legal reasons. Isn’t democracy more of a concept than reality? How much say does the electorate really have? The fact that a lot of politicians say what the electorate wants to hear and then do something else, doesn’t help. To get votes by pretending you stand for something you don’t is not how democracy should workk. But that is what happens in most countries.

In fact I don’t believe you can find any democratically elected government in the world that hasn’t failed to deliver on quite a few of their promises. As we all know, private companies operating that way would eventually cease to exist.

Staff can’t have more influence than board and shareholders

It’s impossible to allow employees to have more impact on decision making than the owners and board of directors do.

Sometimes taking decisions can be severely difficult and you will have to defend them not only to shareholders but colleagues as well. It’s particularly hard if you don’t agree with some of the decisions implemented. But you still have to be able to handle criticism for them and make sure as many as possible understand, accept and are motivated by your decisions.

Do you believe perfect democracy exists in any company or government in the world? How much more democratic can the corporate world get without jeopardizing the businesses? Is it possible to ever satisfy all and sundry and still be profitable and grow? A bit of a Catch 22, isn’t it?

(Photo: yeowatzup – flickr)

108 responses

  1. A true democracy is rare and idealist. Even here in the United States we don’t have a true democracy. Can you imagine how quickly business would come grinding to a halt if it had to take into consideration the thoughts, wishes and opinions of every employee? It’s just not feasible and most people realize and accept that.

    • Absolutely it's impossible in businesses, apart from small jointly owned companies, Susan. Democracy doesn't work well when it comes to politics either. But the United States is increasingly becoming a travesty of democracy. Switzerland probably has the best form of democracy with their constant referendums.

  2. Hello Catarina

    I think this post truly speaks for situation of Pakistan.
    You are saying about the worth of one vote, but what can be situation, when a single person is stamping 1000 of votes for one person. Rigged elections can bring what type of results and I really like, when you said,”However, once in power they frequently proceed with doing something else”. The reasons are right, it can be when there are financial constraints etc. But I am wondering when in a poor country like Pakistan few families rule the country and come to stage turn by turn, promise people to bring back the looted money and then after establishing govt. what constraints are there, that stop them to do what they say in their campaign. Secondly, why we Pakistanis are so stupid that every time believe same person. What do you believe that democracy is solution for country like Pakistan?
    I am sorry, may be I am bit off the post, but as you have vast experience with international politics, may be you can shed some light on these questions. I hope I make sense as well.

    • Pakistan is a perfect example of how democracy should NOT work. But unfortunately it's far from the only country. Not even in the West is democracy perfect. By the way, democracy is not perfect but, so far, it's the most palatable system of running a country we have invented. Pakistan has also had military dictators. Was that better for Pakistan?

  3. An interesting discussion. Democracy at the corporate level has no chance of succeeding without an engaged employee base that feels invested in the company that they work for. I think it has become less common for employees to think in terms of growing with their employer. Instead they often are looking to use their position as a stepping stone to move on to something else. I don't know that you can come up with a perfect democracy in a corporate environment but you can make meaningful moves in that direction which may pay off in terms of the commitment of the staff.

    • Thank you. Glad you agree with me. Democracy is far as politics is concerned is so far the most palatable option when it comes to governing a state. Pity it's far from perfect.

  4. You can't have a true democracy in a company. You can try to achieve consensus but the final decision always rests with the leadership, otherwise you will have chaos. What concerns me is that the leadership is not always looking out for the best interests of the organization. They enter into illegal practices. Citicorp, JPMorgan Chase & Co., Barclays PLC, The Royal Bank of Scotland plc and UBS AG have agreed to plead guilty to felony charges brought by the U.S.Department of Justice for conspiring to manipulate the price of U.S. dollars and euro. What does that say about our leadership in business — and government where scandals are reported every day.

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