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Industrial democracy is an arrangement which involves workers making decisions, sharing responsibility and authority in the workplace. While in participative management organizational designs workers are listened to and take part in the decision-making process, in organizations employing industrial democracy they also have the final decisive power (they decide about organizational design and hierarchy as well) ]
In company law, the term generally used is co-determination , following the German word Mitbestimmung . In German companies with more than1000 employees (coal and steel industries) resp. more than2000 employees (other industries) half of the supervisory board of directors (which elects management) is elected by the shareholders, and the other half by the workers.
Although industrial democracy generally refers to the organization model in which workplaces are run directly by the people who work in them in place of private or state ownership of the means of production , there are also representative forms of industrial democracy. Representative industrial democracy includes decision making structures such as the formation of committees and consultative bodies to facilitate communication between management , unions , and staff .
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The industrial democracy in the organization of industry on democratic foundations, with the participation of management and workers in industrial operations planning and control; and that by committees of production, and committees dispute resolution committees, proposals; what prevents disputes between employers and workers, verifies social peace.
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Industrial democracy : Is participation of employees' representatives from all or most levels of an industrial organization in its decision making process, responsibility and authority.
So it is about the ability for workers to have some say and some control in the workplace and to be able to work with employers to further their interests. an effective system of industrial democracy begins from an awareness from both parties (employers and employees) that in fact their interests are often broadly shared.
For that it increases productivity and service delivery from a more fully engaged and happier workforce. Other benefits include less industrial dispute resulting from better communication in the workplace; improved and inclusive decision making processes resulting in qualitatively better workplace decisions, decreased stress and increased well-being, an increase in job satisfaction, a reduction in absenteeismand an improved sense of fulfillment. Other authors regard industrial democracy as a consequence of citizenship rights.