The Formally Participative Organization

DONALD V. NIGHTINGALE”

The Formally Participative Organization

RESEARCH ON PARTICIPATION is entering a new era. The human relations perspective on participation, from its beginnings (Mayo, 1945) to its contemporary interpretations (Likert, 1967), has focused on a form of participation that takes place within the existing’ hierarchical structure of the organization. In recent years, however, there has emerged a growing interest in forms of participation that are based on a substantial redistribu- tion of power to organization members at lower hierarchical levels.

Participation in the human relations tradition is called informal when it describes a supervisory style characterized by supportiveness, openness, and trust between superior and subordinate. Informally participative superiors are under no obligation to share decision-making power with their subordinates (they do so for reasons that are largely their own), and the issues subject to participation, for the most part, concern the shop floor and not organizational policy. Informal participation has no statutory base.

Formal participation, on the other hand, describes power sharing which is organization-wide and which extends to lower level members decision- making rights that are explicitly recorded and have de jure status. These rights may be codified and sanctioned by legal arrangements outside the organization, as in Yugoslavia and the Federal Republic of Germany, or decision-making rights may be codified in the organization’s charter or collective agreement.

The distinction between “formal” and “informal” participation has been made by Tannenbaum (1974) and Dachler and Wilpert (1978) and is similar to Walker’s (1974) “structure” and “living” participation; French’s (1964) “objective” and “psychological” participation; R o y ’ s (1973) “institutional” and “interpersonal” participation; and Emery and Thorsrud’s (1969) “real” and “apparent” participation.

*Associate Professor of Business, Queen’s University, Kingston, Canada.

INDUSTRIAL RELATIONS, Val. 18, No. 3 (Fall 1979). 1979 by the Regents of the University of California. 0019/8676/79/1025/310/$1.00

310

The Formally Participative Organization / 31 1

This study uses data collected from questionnaires, interviews, and field observations conducted in 20 Canadian firms to compare two contrasting theoretical models - the formally participative and the hierarchically structured organization - across four categories.’ Comparisons of the values of organization members, the structure of the organization, interpersonal and intergroup processes, and the reactions/adjustments of the sample organization members reveal consistent and predictable differences between the two types of organizations.

A Theory of Formal Participation Research on formal participation has suffered from the ab-

sence of an analytic framework which integrates the diverse concepts that are known to be relevant to organizational study.

From the theory of Nightingale and Toulouse (1977), two contrasting models of organization are proposed - the formally participative and the hierarchically structured organization. For the forinally participative organization, the theory predicts congruent relationships among the following:

Values- a value system shared by organization members at all hierarchical levels based on the following beliefs: the average employee desires responsibility and will willingly pursue organizational objectives when given a hand in creating them: the average employee should be free to make choices and decisions on his own; the average employee is hard-working and can be trusted to play a productive and creative role in the management of the organization.

Structure - participative decision-making structures which give employees at all levels the right to participate in major organizational decisions; few rules and regulations limiting and constraining organization members; absence of control and surveillance mechanisms to monitor employee performance and behavior; structural opportunities for employees to exercise initiative and discretion in the conduct of their work; de-emphasis on the chain of command and hierarchy of authority; broad spans of control; and a “flat” organizational hierarchy.

Process - high levels of communication between superiors and subordinates and among peers; little distortion of communication between superiors and subordinates; group relations characterized by openness, trust, cohesiveness, friendliness, and participativeness; reduced conflict,

‘This research was supported by grants from The Canada Council (S77-1111); Canada Department of Labour-University Research Program; the Associates’ Workshop in Business Research, School of Business Administration, University of Western Ontario; and the School of Business, Queen’s University. Pierre Daragon and Gilbert Terrab of the Universite de Quebec B Montreal assisted with data collection.

312 / DONALD v. NIGHTINGALE

tension, and stress among groups and individuals in the organization; conflict resolution practices which emphasize problem solving and de- emphasize hierarchical forcing, avoidance, and smoothing; supportive and participative supervisory practices; and high informal participation and influence among organization members at all levels.

Reactionsladiustments-high member satisfaction with organizational conditions (job satisfaction, satisfaction with peers, satisfaction with work opportunities, satisfaction with wages and benefits); high loyalty to the organization and commitment to its objectives; high levels of motivation; reduced alienation; high levels of general life satisfaction; trust in management and workers; high levels of employee involvement in voluntary organizations and in social and political affairs outside of the organization; and frequent social interactions outside of the work place.

The hierarchically structured organization is defined by a contrasting set of characteristics:

Values-a value system based on the following assumptions: the average employee is apathetic, irrational, and easily swayed by group pressure; the average employee is incapable of assuming responsibility and will avoid it if given the opportunity; the average employee will not willingly pursue organizational objectives and cannot be trusted to work on his own without supervision; the average employee is incapable of making responsible choices; workers perform best under strong and forceful leaders; the average employee is not highly motivated and cannot be trusted to play a productive and creative role in the management of the organization.

Structure - formal decison-making structures which limit the rights of employees to participate in organizational decisions; emphasis on codifica- tion of rules, job descriptions, and role behavior; use of hierarchical referral to handle contingencies; minimal opportunities for employees to exercise initiative on their own; controls, checks, and regulations designed to monitor employee performance and behavior; narrow spans of control; and a “tall” organizational hierarchy.

Process - high levels of communication from superior to subordinate, but limited communication from subordinate to superior and among peers; absence of confidence in the accuracy of communication; relations among work group members characterized by little openness or participativeness, but possibly with high friendliness and cohesiveness; high levels of conflict among groups in the organization; conflict resolution practices emphasizing hierarchical forcing and avoidance, and de-emphasizing open confrontation and problem solving; nonsupportive and nonparticipative supervisory practices; and little informal participation and influence sharing among organization members at all levels.


Reactions/adjustments - low levels of satisfaction with organizational conditions; little loyalty to the organization or commitment to its objectives; low levels of motivation; high alienation; low levels of general life satisfaction; absence of trust in management and workers; little member interest in participating in the affairs of voluntary organizations; and disinterest in political affairs.

The formally participative and hierarchically structured organizations are ideal types. The extent to which an existing organization possesses the characteristics of either model depends upon its size, the nature and stability of its leadership, environmental pressures, technology, and the characteristics of the workforce.

Methodology Sample of organizations. The sample consists of 10 formally

participative organizations and 10 formally nonparticipative organizations all located in Canada. The formally participative organizations must have had power sharing programs for at least three years-a strategy that elim- inates “Hawthorne effects.” The nonparticipative organizations are of conventional design, and do not permit participation in decision making beyond that normally permitted in collective agreements.

The formally participative and nonparticipative organizations are matched on the following criteria: number of employees, geographic location, products and technology, union/nonunion status, ethnic composition of the workforce, and plant type (parent or branch plant). The matching of organizations is outlined in Table 1.

Among the formally participative organizations are two producer coop- eratives, one autonomous work group organization (no direct supervision, employees hire and discipline co-workers, and determine work assignments); one organization with a multiple management board (McCormick, 1973); one organization with a Scanlon Plan; and five organizations with works councils which give employees the right to set their wages, job classifica- tions, and salary grades, determine work assignments, hire workers, and participate in the formulation of organizational strategy. Seven of the 10 formally participative organizations have some form of profit sharing, and employees in five of the 10 formally participative organizations own at least 25 per cent of company stock. These 10 firms are among the most formally participative in Canada.

The formally participative companies were identified a priori on the basis of decision-making structures which give employees a significant voice in organizational decision making. No assessment of the degree to which the


TABLE 1

MATCHED SAMPLE OF FORMALLY PARTICIPATIVE AND NONPARTICIPATIVE ORGANIZATIONS

Union EthnicC Matched pairs of Number of organizations Products employees Locations Plant typeb status composition

P1 hulk 550 U B no E NP1 distribution 450 U B Yes E P2 machining- 150 U P no E NP2 assembly 145 U P no E P3 aluminum 375 U P no E NP3 fabrication- 183 U P Yes E J

P4 fine paper 560 S B yes E,F NP4 617 S B Yes E,F P5 Metal/wood 47 M P no E NP5 machining 40 M P no E

P6 waferboard 148 M B no E NP6 118 M P Yes E,F P7 automobile 125 M B yes E NP7 parts 162 M B Yes E P8 food 136 M P no E NP8 processing 234 M P no E P9 transport 110 S P yes F NP9 short/medium 60 S P Yes F P10 foundry/ 70 M P yes F NPlO machining 125 M P Yes F

assembly

assembly

tU=urhan (large city); M=medium sized city; and S=small town.

‘E=English; F=French; and l=Italian. B=branch plant, senior manager title-Plant Manager; P=parent plant, senior manager title-President.

P=formally participative organization; NP=formally nonparticipative organization.

organizations actually are participative was made when the organizations were selected. Organizations were sampled on the basis of formal participative structures, not on the extent to which the day-to-day decision-making process is participative.

Sample of respondents. Within each organization, 50 respondents were selected from three levels: (1) upper hierarchical levels-including the chief executive officer and all of his immediate managerial subordinates; (2) middle hierarchical levels - including all other managerial and supervisory personnel; and (3) rank-and-file employees.2 The average numbers of respondents at upper, middle, and lower hierarchical levels are 7, 12, and 3 1, respectively, in the formally participative organizations, and 6, 11, and 33, respectively, in the formally nonparticipative organizations?

Respondents at upper, middle, and lower hierarchical levels in each organizational type are compared on the following dimensions: age, sex,

2The sample design is described in Nightingale and Toulouse (1977). ?Two per cent of the respondents refused to participate in the study and were replaced by random

selection. Of the 20 refusals, 15 were in participative organizations and five were in nonparticipative organizations.

The Formally Participative Organization / 315

education, company seniority, job seniority, salary, and nature of work (white-collarlblue-collar). Of the 21 comparisons, three are statistically significant: (1) middle level respondents in participative organizations have more formal education than their counterparts in nonparticipative organizations (12 years versus 11 years, respectively); (2) lower level respondents in participative organizations have more formal education than their counterparts in nonparticipative organizations (1 1 years versus 10 years, respectively); and (3) there is a lower percentage of males at the rank-and-file level in participative than in nonparticipative organizations (73 per cent versus 89 per cent, respectively).

Measurement. Data were obtained from a 27-item interview and a 122- item questionnaire completed at the work place.4 The reliability of the questionnaire and interview, corrected by Spearman-Brown, is .83.

Results Tables 2 to 5 summarize the comparisons of values, structure,

processes, and reactions/adjustments in participative and nonparticipative organizations. T-test comparisons of the two organizational types are reported separately for respondents at upper, middle, and lower hierarchical levels. Mean scores are reported in the tables. Significance levels are one- tailed.

Values. A comparison of the six measures of values in participative and nonparticipative organizations is presented in Table 2. Fourteen of the 18 comparisons are statistically significant, and all statistically significant comparisons are in the predicted direction. The value system in formally participative organizations can be characterized as more Theory Y (McGregor, 1960) than the value system in the nonparticipative organizations. Respondents in formally participative organizations, compared with their counterparts in nonparticipative organizations, believe people have participative potential (e.g., “If you give the average person a job to do, and leave him to do it, he will finish it successfully”); hold more optimistic beliefs about the honesty, trustworthiness, and motivation of the average person; support participative leadership practices (e.g., “A person shouldn’t delegate a decision to his subordinates when he is competent to make it himself”- reversed scale); and endorse egalitarian values (e.g., “Everyone should have an equal chance and an equal say in most things”).

The values of upper level respondents in formally participative organizations are the most Theory Y, followed in order by rank-and-file respondents

4A full description of the measures is reported in Nightingale (1978).


Upper

TABLE 2

Middle Rank and file

Upper

P NP

P NP I P NP I P NP

Middle Rank and file

P NP P NP

Participation potential 3.23 3.01" Motivation of average person 3.53 3.29' Honesty of average person 2.97 2.74" Leadership qualities 3.44 3.25' Trust in people 3.24 3.17 Equality 2.91 2.66'

Rule emphasis (4.59) (4.16') Surveillance 2.74 2.76

Hierarchy of authority 3.55 3.80 Opportunities for initiative 4.32 4.15

3.05 3.06 3.43 3.16'' 2.75 2.59' 3.12 2.98' 3.26 2.93'

~ 3.08 2.85'

(4.94) (4.60') (5.37) (5.06'"') 3.19 3.50" 3.69 4.22"" 4.17 3.87" 4.13 3.84" 3.96 4.04 4.30 4.65"'

2.89 2.77' 3.45 3.31'' 2.82 2.72' 3.14 3.10 3.27 2.88" 3.62 3.52

Measured on a 5-point scale. *p < .05; 04p < .01.

in formally participative organizations, middle level respondents in formally participative organizations, rank-and-file respondents in nonparticipative organizations, upper level respondents in nonparticipative organizations, and middle level respondents in nonparticipative organizations.

Structure. The structural differences are less consistent and of less magnitude than the differences in values (see Table 3). The three comparisons for the "rules emphasis" measure of structure (e.g., "Whatever situation arises, we have procedures to follow in dealing with it") are statistically significant in the nonpredicted direction. Participative organizations keep more written records of employee performance and place greater emphasis on rules and procedures to cover contingencies than nonparticipative organizations. This greater emphasis on rules is not perceived, however, as in- hibiting personal initiative and discretion.

Respondents at middle and lower hierarchical levels in nonparticipative organizations experience more surveillance of activities and fewer oppor-

TABLE 3

COMPARISON BY LEVEL OF STRUCTURE OF PARTICIPATIVE AND NONPARTICIPATIVE ORCANIZATIONS~

Respondents' hierarchical level

I I

a Measured on a 7-point scale. Statistically significant comparisons in a direction opposite to those predicted by the

'p< .05; "p < .01; 'liop < ,001. theory are in parentheses.


tunities to exercise personal initiative than their counterparts in participative organizations. The differences at the upper hierarchical level are, in general, not statistically significant. Respondents at upper and middle hierarchical levels in both types of organizations view their companies' organization as less "hierarchical" than do respondents at lower hierarchical levels.

Processes. Table 4 summarizes the comparisons of conflict resolution practices, relations among work group members, influence, and communication in participative and nonparticipative organizations. For participative organization members at middle and lower hierarchical levels, problem solving is used significantly more often to resolve conflicts, and ignoring is employed significantly less often. Surprisingly, middle level managers in participative organizations feel that the smoothing mode of conflict resolution is employed significantly more often than in nonparticipative organizations. Perhaps the greater amount of socializing among organization members (see reactions/adjustments comparisons) and the friendly relations among them results in this emphasis on smoothing. (This finding contradicts

TABLE 4

COMPARISON BY LEVEL OF GROUP AND INTERGROUP PROCESSES IN PARTICIPATIVE AND NONPARTICIPATIVE ORGANIZATIONS~


P NP

Conflict resolution practices Problem solving 2.89

Smoothing 2.33 Forcing 2.49

Relations among work group members

Cohesiveness 6.01 Friendliness 5.63 Participativeness 5.52

Ignoring 1.82

Openness 4.85

Influence Plant manager Managers and supervisors Workers Employee representatives Personal

Peers Superiors Subordinates

Communication re work

4.49 3.65 3.52 3.48 3.73

4.49 3.81 4.42

2.84 1.95 2.48 2.84"O

4.68 6.09 5.77 5.44

4.39 3.81 3.15O" 3.18" 3.93

4.55 4.20"" 4.44

Middle

P N P

2.80 2.580° 1.79 1.95'

(2.41) (2.25") 2.51 2.54

5.09 4.49"" 6.05 5.840 5.72 5.14" 5.31 5.04"

4.34 4.21 3.44 3.56 3.28 3.17 3.39 3.38 3.21 3.05

4.32 4.32 4,07 4.10 4.18 3.87"

Rank and file

P NP

2.70 2.37""O 1.87 2.16"'" 2.43 2.40 2.25 2.22

5.08 4.81' 5.86 5.489" 5.42 5.23 5.03 4.44000

4.19 4.08 3.65 3.54 3.15 2.74"'" 3.02 3.06 2.53 2.30"

4.12 3.920° 3.45 3.18'" - -

a Conflict resolution practices are measured on a 4-point scale; relations among work group members are measured on a 7-point scale; influence and communication are measured on a 5-point scale. Statistically significant comparisons in a direction opposite to those predicted by the theory are in parentheses.

'p < .05; *'p < .01; ***p < .001.


the greater degree of openness among middle level managers found in participative organizations.)

Relations among work group members in participative organizations at middle and lower hierarchical levels are seen as more open, friendly, and participative and the work groups as more cohesive than in nonparticipative Organizations.

The influence measures of process indicate that the formally participative organizations are significantly more participative at the shop floor level than are the nonparticipative organizations. However, what participative and nonparticipative organization members perceive as the amount of influence wielded by other employees does not always differ. The decision- making authority of plant managers and their immediate supervisors and other managers and supervisors were evaluated similarly by members of both organizational types. On the other hand, upper and lower level members of participative organizations see workers as significantly more influential over decision making than do their counterparts in nonparticipative organizations. Middle level organization members in participative organizations do not see workers as more influential than do their counterparts in nonparticipative organizations. This finding is surprising, since the formal arrangements in most of the organizations in this sample provide workers with significant influence over decisions that are normally made by middle level managers.

A second surprising finding is the absence of a significant difference in the influence of employee representatives in participative and nonparticipative organizations. Differences in employee representative influence are ob- served only by upper level managers.

The comparisons of communication patterns in participative and nonparticipative organizations are less consistent than expected, although all significant differences are in the predicted direction. Middle and lower level organization members communicate with each other significantly more often in participative organizations. As well, lower level organization members in participative organizations communicate more frequently with their peers than do their counterparts in nonparticipative organizations; upper level organization members communicate more frequently with their superiors in participative than in nonparticipative organizations.

Reactions and adjustments. A comparison of organization member satisfaction in participative and nonparticipative organizations reveals large and consistent differences in the predicted direction (see Table 5). The differences are most pronounced for members at lower hierarchical levels (15 of 18 comparisons are significant beyond the .01 level). Gradients of satisfaction are greater in nonparticipative than in participative organizations.5

The Formally Participative Organization / 319

TABLE 5

COMPARISON BY LEVEL OF MEMBER REACTIONS/ADJKJSTMENTS IN PARTICIPATIVE AND NONPARTICIPATIVE ORCANIZATIONS~

P NP

Attitudes toward management Commitment to organization Alienation Life satisfaction Job upgradingb

. Voting in political electionsb Voting in union electionsb Satisfaction

Pay Fringe benefits Job security Participation Freedom on the job Opportunities

Promotion Learn new things Develop skills Accomplishment

Respect from co-workers Social relations

6.47 6.19' 6.41 6.45 2.63 2.54 6.04 5.93 51% 34% 97% 97% - -

6.15 5.78" 6.11 5.95 6.19 6.07 6.27 6.22 6.47 6.42

5.90 5.49" 6.12 5.98 6.26 5.85'' 6.38 6.24 6.24 6.15 6.27 6.37


Middle

P NP

5.98 5.66' 6.24 6.01' 2.82 2.98 5.91 5.86 50% 52% 91% 85% - -

5.41 5.07' 5.50 5.37 5.87 5.33" 5.84 5.40"" 6.22 5.91"

5.23 5.09 5.81 5.64 5.82 5.65 5.85 5.68 5.97 5.75" 6.06 5.86'

Rank and file

P NP

5.44 4.63 "O"

6.02 5.67"' 3.32 3.71 "" 5.87 5.60"' 20% 15% 79% 78% 68% 70%

5.28 4.76'' 5.31 4.75"'" 5.59 5.01'" 5.00 4.330" 5.29 5.42""

4.78 4.30"' 5.30 4.78"" 5.23 4.77"" 5.55 4.95"' 5.69 5.34" 5.98 5.58""

aMeasured on 7-point scales. bQuestions on job upgrading. and voting in union and political elections are answered "yes" or "no." 'p < .05; **p < .01; "'p < ,001.

Upper level organization members, in general, are more satisfied than middle level managers who, in turn, are more satisfied than lower level members. However, lower level members in participative organizations approach the levels of satisfaction expressed by middle level managers in nonparticipative organizations. This convergence is interesting because it differs from attitudes expressed in other studies. In the Israeli kibbutzim and Yugoslav self-management organizations, the degree of satisfaction expressed by lower level respondents was significantly below the level asserted by middle level employees in nonparticipative firms in the U.S., Austria, and Italy (Tannenbaum e t al., 1974)!

Finally, the absence of a significant difference in organization members' voting behavior contradicts Pateman's (1970) hypothesis that organization members who are given the opportunity of participating in organizational decision making will be more effective contributors to the democratic process in the larger society. As the data in Table 5 indicate, organizational partici-

5This finding confirms Tannenbaum, et al. (1974). &These levels of satisfaction and reactions/adjustments for lower level members of formally participa-

tive organizations are as high as those reported by Tannenbaum, et al. (1974) for kibbutzim and Yugoslav organizations.


pation and participation in the political arena are not mutually reinforcing. Overall, the differences in reactions/adjustments between participative

and nonparticipative organizations are strongest for organization members at lower hierarchical levels, weakest for organization members at the upper hierarchical level, and intermediate for organization members at middle hierarchical levels. This finding may result from a “ceiling effect” for responses for upper level members, but may also suggest that formal participation affects most strongly organization members at lower and middle hierarchical levels.

Work conditions. The psychological attributes and physical conditions of work were assessed in an earlier study (Nightingale, 1978), using field observation and interview methods to determine whether the tasks per- formed by organization members are different in formally participative and nonparticipative organizations. Ten characteristics of tasks (physical working conditions, autonomy, skills, task completion, variety, concentration, feed- back, uncertainty, conflicting demands, and required interdependence with others) were compared by level in both types of organizations. Data, not reported here, indicate that six of the 30 comparisons were statistically significant beyond the .05 level (two-tailed). These comparisons suggest that, for respondents at the lower hierarchical levels of formally participative organizations, there is greater autonomy, required interdependence among workers, and fewer conflicting demands than in nonparticipative organizations. For middle level respondents, tasks have greater variety in participative than in nonparticipative organizations; for upper level respondents, physical working conditions are less desirable and tasks involve a less complete cycle of activities in participative than in nonparticipative organizations.

The similarity of tasks in participative and nonparticipative organizations results from the matching of technology/products in the two types of organizations, and indicates that formal participation does not substantially affect task attributes. Differences in the reactions/adjustments in participative and nonparticipative organizations cannot, therefore, be attributed entirely to differences in task attributes.

Conclusion The data suggest that predictable and statistically significant

correlates of formal participation do exist: the formally participative organizations sampled possess the properties of the “formally participative” model and the nonparticipative organizations resemble the “hierarchically structured” model. The differences between participative and nonparticipative


organizations are strongest for organization members’ values, next strongest for interpersonal and intergroup processes, next strongest for the reactions/ adjustments of organization members (very strong for measures of job-related satisfactions), and weakest for measures of structure (although the relationships are strong for lower level organization members).

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in Organizations: A Critical Evaluation,” Administrative Science Quarterly, XXlII (March, 1978), 139 .

Emery, Frederick and Einar Thorsrud. New Designs for Work Organization. Oslo, Norway: Tannum Press, 1969.

French, John R. P. “Laboratory and Field Studies of Power.” In E. Boulding, ed., Power and Conflict in Organizations. London: Tavistock Publications, 1964, pp. 33-51.

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Study,” Human Relations, XXVIII (December, 1975), 863-883. McGregor, Douglas. Human Side of Enterprise. New York: McGraw-Hill, 1960. Mayo, Elton. The Human Problems of Industrial Civilization. New York: Viking, 1931. -, The Social Problems of Industrial Ciuilization. Cambridge, Mass.: Harvard University

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Administrative Science Quarterly, XXII (June, 1977), 264-280. Pateman, Carole. Participation and Democratic Theory. London: Cambridge University

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Tannenbaum, Arnold S. “Systems of Formal Participation.” In George Strauss, Raymond E. Miles, Charles C. Snow, and Arnold S. Tannenbaum, eds., Organizational Behavior: Research and Issues. Madison, Wisc.: Industrial Relations Research Association, 1974,

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The Formally Participative Organization