Participative Management Concept - The History, Theory and Practice

One of the significant concepts in contemporary management is participative management (PM), their origin of which is traced by most writers in the academic literature to the post-World War II writings of scholars, such as Kurt Lewin, Douglas McGregor, Chris Argyris, H. Igor Ansoff, and Michael Porter (Kaufman , 2001). However, a number of management scholars have also written at more length on the origins and history of PM, such as Carroll and Schuler (1983) said that participatory management can be traced to the early 1960s, the writings of behavioral scientists, such as Douglas McGregor and Rensis Likert. Furthermore, Stanton (1993) believes that the origins of PM to two behavioral scientists, Lester Coch and John French, who wrote in the late 1940s but on the issue of organizational change (Kaufman, 2001). Another opinion is stated that the writings of social psychologist, Kurt Lewin, inspired the concept of participatory management Cotton (1994).

Participation as a management style was suggested in the classical Hawthorne experiments of the 1930s. The experiments represent that when small groups of workers feel their work environment is supportive, gain more satisfaction and work better (Crane, 1979). Another story explained the origin of participatory management as the idea of industrial democracy, stated by Rockefeller, gained currency in the late 1910s and translated to idiom of participatory management in management field (Kaufman, 2001). However, researchers in the academic field had little success in interesting management in this concept (Chang and Liu, 2008).

“Participative management should be looked at as an evolution of the organization that will ultimately lead to achievement of corporate objectives” (Yohe, 2003). In the 21st century, research shows that employees are starting to make more demands on their employers. They want to be parts of a team and they want more involvement in decision-making (Shagholi and Hussin, 2009). Undoubtedly, today, in order for an organization to be successful, it should care its employees as important assets and keep them satisfied. Since the increasing pressure of world stiff competition and the complexity of decisions, organizations should shift to more cooperation and participation to increase their performance. It seems that PM as an alternative to the traditional ”command and control” (Kaufman, 2001) likely be applied in a great number of organizations in future, as the improvement in this case can be seen.

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Shifting to Employee participation

“Employee empowerment or participative decision making is neither a new or simple management concept”. Employee participation is a complex management tool which can be effective in improving performance, productivity and job satisfaction when applied properly (Nykodym et al. 2008). With increasing globalization, industry is under intense pressure to produce high quality, specialized ‘high-tech’ products and services, all of which require a flexible and highly trained workforce. The one of the intent of participation is developing cooperative and strong workforce. (Howcroft and Wilson 2003) Employee participation can be interpreted in three distinct ways. First, it can be seen as ‘industrial democracy’. Second, it may represent that subordinate employees involve more in one or more aspects of organizational decision making. Third, it may show a specific evolutionary development to promote greater employee influence within the organization. Salamon (1992) (Huang, 1997)

Why participative management?

On the basis of Likert’s findings, Keith Davis in his supportive model mentioned that when employees feel a sense of participation and task involvement (in a psychological supportive climate), they will identify with the organization, take responsibility, and strive to contribute to the organization’s objectives (Crane 1979). So, it seems that in order to reach the goals in the organization with better performance, participatory management can be a good choice. Participation will provide employees, who are motivated and trained to initiate their own decisions, to work effectively in teams (Howcroft and Wilson 2003). Another important reason for social transformation to participation is that participation as both a means and an end seeks to strengthen people’s capacity to make decisions and their ability to create an environment for change (Vernooy, Qiu, and Jianchu 2008).

What is the meaning of participatory management?

Styles of leadership

Management style is believed to be another determinant of system success and user participation (Lu and Wang 1997). Different level of leadership styles leads to different levels of job satisfaction. Subordinates feel more satisfied when leaders show high levels of consideration and supportive behavior (Chen and Silverthorne 2004)

The four quadrants in SLT represent four basic leadership styles: high task and low relationship

(S1, telling); high task and high relationship (S2, selling); low task and high relationship

(S3, participating); low task and low relationship (S4, delegating) (Chen and Silverthorne 2004). In addition, Likert broke management styles into the four systems in related to the extent of employee’s participation (Shagholi and Hussin 2009).

There are several styles of leadership such as: autocratic, bureaucratic, laissez-faire, charismatic, democratic, participative, situational, transactional, and transformational leadership (Mosadeghrad 2003b, 2004). Not everyone agrees that a particular style of leadership will result in the most effective form of organizational behavior (Mohammad and Rad, 2006). Victor Vroom and Philip Yetton found that to be effective, leaders should fit their style to the demands of the situation (Controversy, 2008), but participative leadership is one of the alternatives that if it be selected in appropriate situation, it can perform a miracle in the organization.

Participatory management definition

Participative management is a practice that managers use as an attempt to satisfy employees and increase productivity (Yohe 2003). By ‘participatory’ means various types and degrees of involvement of employees in, control over, and decision making in an activity (Vernooy, Qiu, and Jianchu 2008) “Participative management, rooted in the management approach, focuses on decentralization of educational decision making and sharing of power” (Sidener, 1995). As the term of participation becomes famous, the definitions and meanings of the term have grown diverse and each research concentrated on some of the specific dimensions of this concept (Somech 2002). All of the areas, methods and forms of participation illustrate the fact that participative management is a multidimensional concept (Nykodym et al. 2008).

It seems that participatory management has been suggested as a critical means to transform the culture of a typical governmental bureaucracy (Jongjoo, D, and Houston 2009). Bolman and Deal (1997), implied that that participatory management is a popular remedy because they find more opportunities to participate in decision-making about their work and working conditions.

Generally, participatory management theory assumes that employee prefer to affect their work by playing a role in making decisions about their work. So, by the means of participatory management, it is tried to balance the involvement of both superiors and subordinates in information-sharing, problem-saving and decision making (Jongjoo, D, and Houston 2009). Most authors agree that conferring greater decision-making authority and responsibility to front-line employees is the essence of participatory management, so” they, too, have some involvement (albeit often at a nonstrategic level) in the control and coordination of the basic activities and functions of the enterprise” (Cotton, 1994). “Participatory management typically requires greater sharing of information, rewards, and power with front-line employees, as well as considerably greater investment in training” (Kaufman, 2001)

It is indicated that participative management is one of the most important as well as most widely utilized strategies for developing organizations (Anon 1997) which emphasize on the employee development (Anonymous, 2007). (Glosser, 2001) believes that participatory groups is more than putting individuals in groups, it needs not only physical presence, but also mental involvement of them. The theme of participative management involves employees’ ability, skill and interest in business decision making. Participatory management is characterized as a style under which managers have complete trust in subordinates, and much of the decision making is accomplished by group participation.(Shagholi and Hussin 2009)

Definitions of PM also vary. Participative management is a kind of management style in which the subordinates share a significant degree of decision-making power with their superiors (Robbins, 1991: 243). “Participative management is a term used to describe an approach to management in which the subordinates, in a particular situation, are allowed and encouraged to participate in decisions which will affect them” (Crane, 1979). Knoop (1995) defines participative management as joint decision making or a least shared influence in decision making by a superior and his or her employees (Benoliel and Somech 2010)

Participatory manager

Ten characteristics declared for participatory manager which ranked in order from the most to the least participative are as follows:

• “Gives subordinate a share in decision-making
• Keeps subordinates informed of the true situation, good or bad, under all circumstances
• Stays aware of the state of the organization’s morale and does everything possible to make it high
• Be approachable
• Counsels, trains, and develops subordinates
• Communicates effectively with subordinates
• Shows thoughtfulness and consideration of others
• Tends to make changes in ways of doing things
• Tends to support subordinates even when they make mistakes
• Expresses appreciation when a subordinate does a good job” (Albanese, 1975) (Shagholi et al. 2010a)

Participative management dimensions

According to (Somech 2002) participative management consists of several dependent yet distinct dimensions. In other words, participatory management has an influence on many items which are PM’s dimensions. Shagholi in her research attempts to identify the participatory management’s components, considering PM as a multidimensional concept. 15 items she found are as follows: 

1. Trust which has effect on participatory management and vice versa, 
2. Decision making, 
3. Team work, 
4. Share power, 
5. Motivation, 
6. Communication, 
7. Involvement, 
8. Collaboration 
9. Democracy which is a benefit of participatory management, 
10. Transparency, 
11. Innovation, 
12. Respect, 
13. Problem solving, 
14. Identify common goal,
15. Equalitarian (Shagholi et al. 2010b).

(Somech 2002) stated five dimensions for participatory management, decision domain, degree of participation, structure, target of participation, and rationale. I will mention some of these dimensions.

Decision domain

There are four broad areas of participation. In each of them employee may participate in some actions. First, taking part in setting goals or designing the job, second, in making decision, third, in solving problems, which involves defining the issues and setting the alternative courses of action and last in making changes, such as setting company policies that might involve hiring, layoffs, profit sharing or investments (Nykodym et al. 2008).

Degree of participation

According to the levels of control by employees over their works and organizations, three paradigms of participative management are defined, industrial democracy, employee participation and employee involvement (Anon 1997). There is a continuum indicates the degree of involvement in decisions making. Decisions are made unilaterally by the manager with no involvement of other employees at one extreme and at the opposite extreme; employees are empowered to decide definite matters. In between, the degree of employee’s participation in decision making is different. (Somech 2002) define four kinds of decision making in organizations as follows:

1. Autocratic decision making: the superior makes the decision on his or her own without attaining information from his o her subordinates.

2. “Information sharing: The superior obtains the necessary information from the subordinate and then makes the decision on his or her own.

3. Consultative decision making: The superior shares the problem with the subordinate, getting his or her ideas and suggestions. Then he or she makes a decision.

4. Democratic decision making: The superior shares the problem with the subordinate, and together they analyze the problem and arrive at a mutually acceptable solution.”

Structure

Participatory management can have formal or informal structure. Some evidence suggests that formal structures lead to higher degrees of participation than informal structures (Somech 2002).

Considering the five dimensions mentioned above, participative management can be classified into six types: 1) participation in work decisions; 2) consultative participation; 3) short-term participation; 4) informal participation; 5) employee ownership; and 6) representative participation. (Anon 1997)

The effects of participatory management

Two theoretical models are widely used to explain the effect of the participative leadership behavior of superiors on subordinates’ work performance. The motivational model and the exchange based model. “Recognizing the mechanisms by which participative leadership influences performance will help practitioners better designing training and development programs aimed at enhancing participative management”. The motivational model states that employee through participating in decision making are provided with greater reward from work. Therefore, they try to improve their work performance by higher levels of psychological empowerment. The exchange-based model implies that since participative leadership behavior means more respect and concern for the subordinate and higher level of trust in the superior, the subordinates are likely to reciprocate their superiors by exhibiting a higher level of work performance. Usually it is said that motivational mechanisms is for managerial subordinates (middle managers who have both superiors and subordinates) and exchange-based mechanisms for non-managerial subordinates (employees who have supervisors, but no subordinates) (Huang et al. 2010)

The effect of participative management has two dimensions:”tangible means productivity, quality of product, turnover rate, absenteeism rate and labour-management dispute rate and intangible includes work morale, organizational climate, employee motivation and job satisfaction” (Anon 1997)

Some of the positive effects of participative management are as followed:

• Increasing the degree of “we” feeling or cohesiveness in the organization;
• Providing the participants with an overall organizational point of view
• Decreasing the amount of conflict, hostility, and cut throat competition among the participants;
• Increasing the individuals’ understanding of each other which leads to increased tolerance and patience toward others;
• Increasing the individual’s free expression of his personality
• Developing more innovative and creative work climate (Press 2010).

Participative management practices are popular motivational techniques, along with appraisal and incentive systems, for improving employee performance (Gilberg, 1988) (Yohe 2008).

Some negative effects of employees’ participation are mentioned by some researchers. Reducing the controlling power of the manager, which leads to decrease the speed of decision making process and increase costs, is one of the main result of participation. In addition, making wrong decisions because of the lack the experience and knowledge of management of employees can be another problem (Anon 1997). Group problem solving and conflicts in the group because of different interests in individuals in the group are also the key issues (Controversy 2008). The organizational situations, however, may either strengthen or restrict the effects of participation (Anon 1997).

The relationship between participatory management and organizational behavior’s elements

Organizational behavior seeks to determine some indicators to evaluate the organization in related to its human resource. The main ones are job satisfaction, organizational commitment and organizational citizenship behavior. The ultimate objective of choosing these indicators is increasing job performance by trying to care employees through improving these indicators. Since the humans are the main cause of organization’s success or failure, keeping them satisfied and making them committed, generally speaking, providing them mentally and financially are important in organizational performance. Additionally, job stress is a growing problem resulting in substantial cost to individual employees and to work organizations because it has a great influence on job performance (Benoliel and Somech 2010). Thus, it should be noticed.

A great number of researches tried to find any relationship between participatory management and organizational behavior elements. There is not any consistency between researchers in this field which can be justified by the contingency theory. In another words, the context or organizational situation is really important in the effect of participatory management in the organization.

The leader’s directive, participative and supportive behaviours have positive and significant relationship with organizational commitment (Yohe 2003). Participatory management has recently been hailed as one possible solution to reduce high staff turnover (Jongjoo, D, and Houston 2009) , workers’ mental health (Yohe 2008) and job motivation (Scott-ladd, Travaglione, and Marshall 2008) . In addition, participatory management enhance job satisfaction (Yohe 2008) (Jongjoo, D, and Houston 2009)(Brownell and Chenhall 1988) (Scott-ladd, Travaglione, and Marshall 2008) and commitment (Scott-ladd, Travaglione, and Marshall 2008) (Pearson and Duffy, 1999) (Huang et al. 2006) organizational citizenship behavior and job performance (Lau & Lim 2002; Ming 2004). However, (Brownell and Chenhall 1988) stated that participatory does not affect job performance.

(Nykodym et al. 2008) believed that participatory management leads to greater job satisfaction since the employee feels more valued and trusted, and also gains a better understanding of management difficulties by dealing with some of the same problems. Kim found participative management and employee empowerment techniques in leadership training programs as a way of improving communication and job satisfaction (Yohe 2008)

Benefits of participatory management

A number of benefits that can be derived from PM are as follows:

A major source of pleasure and happiness for highly extroverted individuals because PM means more social interaction (Benoliel and Somech 2010)

“Participative management has been found to promote such things as customer orientation, continuous learning, and improvement in quality and control” Roberson, Moye, & Locke) (Yohe 2008)

Promotes teamwork, cooperation in solving problems, and combining knowledge (Benoliel and Somech 2010)

PM is critical to the struggle to improve the effectiveness of projects

Enhance the Feelings of being needed and wanted and that everyone’s opinions count will promote ownership

Decision making therefore benefits from wider range of knowledge, information, experience and increasing choices and opportunities

PM promotes the adoption of problem solving, rather than a predictive blue print approach to management to ensure flexibility, and maintain the ability to adapt to constantly changing realities

“PM increases local capacity and empowerment. PM has to be introduced in which power is shared, everyone is given an opportunity to participate, work is conducted by consensus and multidisciplinary teams are utilized to implement processes”. (Shagholi et al. 2010b)

Improvement of organizational productivity with new ideas discovered by employees from practical experience;

Giving employees a chance to exercise creativity in their jobs and thus strengthen their motivation as well as increasing job satisfaction;

Ensuring that wages, bonuses and other remuneration are given on the basis of merit (Anon 1997)

The feeling of hostility towards orders from the top level of organization will be eliminated or decreased

Helps employees to feel able to drop their defenses and expand their energy productively instead (Shagholi et al. 2010a)

Provides more valid viewpoints because persons closest to the situation are involved develops interest and enthusiasm of subordinates (Controversy 2008)

Implementing participatory management

Parnell, Carraher, & Holt (2002) found that the propensity of managers to employ participative management styles was found to positively influence the degree to which strategies were perceived as part of the organization (Yohe 2008). So, right implementing the participatory management in the organization has positive influences on many aspect of organization and should be noticed.

Using participatory management in the organization requires some points. First of all, PM is not always the proper style to be implemented in the organization and the organizational situation should be considered. Studies suggest that participatory management is not always suitable for developing countries which believe high power-distance. For instance, research shows that employees in Chinese state-owned enterprises may not appreciate participative leadership because they have been exposed to authoritarian and command-based leadership for decades and they tend to take for granted the inequality between the powerful and the powerless (Huang et al. 2006).

Second, It has also been shown that many organizations have had difficulty in implementation of participative management, due to managerial or employee attitudes, poor communication, training inconsistency, and lack of good leadership (Yohe 2003).Therefore, if participatory management is chose to implement, some points should be noticed in implementing PM to prevent the occurrence of some problems. In this section, first, when PM is the best way to achieve organizational objectives and second, the important factors influencing the successful introduction of participatory management will be mentioned. Third, some points, notable to achieve participatory management will be stated. I tried to review all the literature in this field and collect all the main points.

As Kanter[6] said in some situations when organizations seek new sources of expertise and experience, tackling a problem that no one “owns” by virtue of organizational assignment, studying the problem in depth, specialist or expert advice is needed a decision has multi‌departmental implications problems are unique and require innovative approaches to their solution the commitment of all employees is critical to the outcome of the decision, participation works best (Controversy 2008).

Totally, the psychological attitudes of employees and managers, the climate of the organization, the environmental conditions, the issues, the situation, and the kind of problem to be addressed determine first if participation is the method to use, and if so, what factors will have an effect on its success (Nykodym et al. 2008).

Which Factors should be considered in introducing participatory management in the organization?

Participatory approach requires investments of time and money which should be accepted. Also, top management should believe in the benefits of participatory management (Controversy 2008).

The plans developed for implementing PM should not be viewed as static but rather evolutionary (Sharpe 2010).

A clear definition of objectives is vital. However, developing goals, objectives, and indicators is not an end in itself. It is just the beginning of the process.

The executives’ feelings and attitudes about participative management have a leading role. So, employees and management should be trained about this concept and also perseverance on the part of them is necessary (Yohe 2008). Training for PM is iterative, ongoing, and based on learning-by-doing and interaction (Vernooy, Qiu, and Jianchu 2008).

The kind of presenting the program of participation in the organization is really important. “Leaders sometimes present participation as a gift rather than a results-oriented tool. Presenting participation as a luxury is insulting to employees” (Nykodym et al. 2008). However, introducing participation along with clear explanations of what management hopes to gain from this concept is more readily accepted by employees.

The structure and management. The kind of organizational structure is also crucial (Howcroft and Wilson 2003). A clear structure is important for making an empowering process like participation work. From the beginning, ground rules and boundary conditions need to be established. “Too many choices can be frustrating, and the fewer constraints placed on a team, the more time they will spend defining their structure than accomplishing the task”. Organic rather than mechanistically oriented structures are more appropriate (Management and Issues 2000).

A system of rewards should be performed. When economic incentives are divorced from the situation; there can be no benefits from participation. Additionally, rewards need to be equitable to performance outcomes (Cordery et al., 1993)

All the organization’s individuals should be held accountable for their actions (Controversy 2008).

Participatory management should be introduced to the organization during times. Changing organizations from autocratic management to participatory management over night is impossible (Controversy 2008).

In order for an organization to implement and achieve participative management it should note some points as follows:

Maintaining a constant dialogue with employees is one way of avoiding misunderstandings and promoting positive outcomes. (Scott-ladd, Travaglione, and Marshall 2008) (Shagholi and Hussin 2009)

Employees should be given power, information, knowledge, and rewards (Yohe 2003)

Preserving individual employee rights (Yohe 2003).

Giving continuous feedback, both positive and negative to employees, on their decisions (Controversy 2008).

Totally speaking, organizations which have a culture, or environment, that is accepting of change. (Yohe 2003), follow certain guidelines (Nykodym et al. 2008), the role and level of participation in them is transparent and well understood and the participatory processes and expectations match the organizational context and employee capabilities (Drehmer et al., 2000) are more successful at implementing and achieving participatory management.

What factors affect the prosperity of participative management?

Some factors affect the participatory management success are as follows:

The degree to which participative behavior was encouraged or discouraged by the organization, the prevailing culture of the organization and the cultural norms and attitudes (Yohe 2008)

The design of the actual work to be done. If workers are mutually dependent on each other to get the work done, encouraging autonomous individual participation would be counterproductive.

Trust: if employees do not trust their managers, it is unlikely that participation from pairing workers and managers would succeed. (Nykodym et al. 2008)” top management is powerless without the support of those lower down when managers and employees have little respect for each other, efforts that go into communicating the corporate strategy, promoting the company to employees or building customer awareness are likely to be wasted” (Davis and Nance 1967).

The environment. With rapidly changing technology, governmental regulations, and intense competition, group participation may prove to be the most effective when members have the technical up-to-date and necessary skills (Nykodym et al. 2008)

Main barriers

Barriers to PM are usually of three types: controllable, uncontrollable and capable of being influenced. “Controllable factors may include inadequate time with employees as well as lack of training and interest on the part of employees. Uncontrollable factors may be the reputation of the department, structure of media services, and the area of service within the organization.” (Schmid, 1980) Barriers you can influence may be lack of knowledge in PM by a supervisor, organizational climate that is not conducive to PM, and a supervisor who is unwilling to spend the time to practice PM.

Participative management is often accompanied by conflict and struggle (Yohe 2008). The major barriers to implement participative management processes are as follows:

1.”Organizational bureaucracy and structure that focuses on uniformity, consistency, and control from the top.

2. A culture that does not include participative management as a value or norm.

3. Subordinates that lack the desire or knowledge and thus, don’t feel competent to participate in decision-making.

4. Increase in workload and job stress.

5. Lack of incentives for participation.

6. Fear of making incorrect decisions.

7. Conflicting managerial priorities.

8. Poor or lack of communication (Shagholi et al. 2010b). “

Some of the above barriers suggest that a contingency approach to participation may be the best method. All geographical areas, sectors, industries, corporations, departments, and people have different societal cultures (contingencies) that make them unique, and all of these different situations cannot be treated similarly. By identifying the barriers to participative management it allows management to be better prepared for future challenges so that the corporation can change, with fewer disruptions, in the implementation of participative management. (Yohe 2003)

The barriers to participative management can be overcome with the proper implementation, training, and communication by management on corporate objectives. Communication, managerial and employee attitudes, leadership, training, and human resource strategy are all significant moderating factors to participative management, that if not minded will create barriers to participation. (Press, 2010).