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industrial democracythe participation of employees in the decision-making of a work organization. The participation may be total or shared with owner and managerial interests. Moreover, the decision-making may concern the organization as a whole, or only sub-groups within it. The main types are workers’ self-management (e.g. the former Yugoslavia), producer cooperatives (e.g. Mondragon in the Basque province of Spain), and codetermination (e.g. Germany). At the shop-floor (i.e. sub-group) level, the creation of autonomous work groups and quality of working life programmes are examples of industrial democracy of a partial kind (Poole, 1986).
The general concept of industrial democracy has been much criticized by both pluralist and Marxist writers. The pluralist argument is that participation in management dilutes trade unions’ ability to represent their members effectively in collective bargaining (Clegg, 1960). The pluralist critique amounts to an alternative definition of industrial democracy based upon opposition (through collective bargaining) rather than participation (see also COUNTERVAILING POWER, PLURALISM).
The Marxist criticism is that it is not possible within a capitalist society to incrementally gain workers’ control through employee participation in business enterprises (Hyman, 1984).
Historically, industrial democracy has its roots in French syndicalism which influenced early socialist thinking and trade unionism in the US and UK in the early decades of the 20th century. In the UK, the movement transmuted into guild socialism in the inter-war years (Pribicevic, 1959) and reappeared as a force in the 1960s largely as a consequence of the agitation of the Institute of Workers’ Control (Coates and Topham, 1972). This group was active in supporting the establishment of cooperatives and worker directors on the boards of nationalized industries. In the UK, however, the biggest impetus towards implementing industrial democracy on a wide scale came in the 1970s, with the publication of the draft Fifth Directive of the EEC Commission in 1972. The British government's response was to set up the Bullock Committee of Inquiry on Industrial Democracy. This committee's principal recommendation was that workers should be represented, via trade union channels, on all companies employing over 2,000 workers. The proposals, however, were almost wholly ignored as none of the interested parties (government, employers, trade unions) found the recommendations palatable to them. In the 1980s there was (managerial) interest in participation on management's terms (i.e. quality circles) and in some extension of ownership through share schemes.