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worker participationthe involvement of employees in the decision-making processes of the FIRM that extends beyond those decisions implicit in the specific content of the jobs that they do. Worker participation most commonly refers to those processes or activities that occur at the workplace, in particular, the devolution of work planning to work groups or QUALITY CIRCLES.
The term ‘industrial democracy’ is often used as a synonym for worker participation, but industrial democracy in fact denotes power-sharing by the workers with management in corporate decisions decided at higher levels in the organization (that is, up to board of directors level). Whereas worker participation implies the direct involvement of all employees, industrial democracy suggests a system of representation and joint consultation between managers and worker representatives and with worker directors (that is, worker representatives sitting on the board of directors). See TWO-TIER BOARD. Employee share ownership through EMPLOYEE SHARE OWNERSHIP PLANS (ESOP)
can enhance worker participation by providing workers with additional information and commitment as shareholders in the firm.
There is some controversy about the effects of the extension of worker participation upon economic efficiency. At the operational level, worker participation can improve PRODUCTIVITY (output per man) by instilling a greater commitment to, and sense of achievement in, group activities. At the strategic level, major decisions relating to new investment, etc., may be impaired by the involvement of too many vested interests when what is required is a more detached longer-term view of the issues involved.
standards of structure
- A large or an appreciable number of suppliers, none of whom dominates the market, or at least as many as scale economies permit.
- No artificial barriers to entry.
- Moderate and price-sensitive quality differentials.
standards of conduct
- Active competition between rival suppliers, avoiding collusive agreements to fix prices, market shares, etc.
- No use of exclusionary or coercive tactics (exclusive dealing, refusal to supply, tie-in contracts) aimed at harming rival suppliers.
- Sensitivity towards consumers’ demands for product variety.
standards of performance
- Minimization of supply costs.
- Prices consistent with supply costs, including a ‘fair’ profit return to suppliers in relation to efficiency, risks, investment and innovation.
- Avoidance of excessive promotional expenses.
- The introduction of new technology and new products.