We all make decisions constantly: whether to cross the street at a red light or wait for a green one, which school to put own child to, how to find an interesting and well-paid job, and many others. Decision making is a process that an individual or organization undertake in order to improve their future state. The objectives of the decision making include choosing the best option in the case of existing of several options, such as alternative designs, plans, and forecasts; choosing the best candidates from the collective point of view when voting at meetings of shareholders of the company, in the elections to the board of directors, etc.; making political decisions by voters in elections, political parties, factions in parliament, or political leaders; optimal allocation of resources; choosing the strategies of development for the organization; choosing the rules of coordination of interests in communities for achieving social goals.
Over the last 50 years, the theory of decision making has become a very effective tool for supporting the management at various levels. There is a variety of reasons for introducing participative style of management in organizations. Thus, PDM helps to make the best use of human intellectual and emotional capital. Through participating in the decision making process, the employees receive a psychological satisfaction. Participatory management gives employees a sense of pride for a chance to make decisions, thus retaining the best talents in the industry. An industrial democracy and employees’ having a say in decision making, help to increase productivity of any company. It is known that the success of any organization depends on its human resources and only the team-oriented employees will do their best for the company. Namely PDM assists in establishing of harmonious relationship between the workers.
It is evident that the leader has the right to make the decision on his or her own. In such a case, the leader takes all responsibility for the outcome. For avoiding this disadvantage, a manager or a chief can involve members of the organization in decision making. This management method can present many benefits to the companies and organizations that choose to apply it. For better understanding the process, readers should be aware of four sub-types of participative decision making (PDM). Thus, democratic decision making is a type of leadership style in which the majority decides the action through voting. Thanks to this type, the decision can be made fast and all members of team participate in the process. Autocratic, as follows from the name, is the type of decision making when the leader himself makes decisions and takes responsibility for them. It is the best choice to use the autocratic style in the emergency situations. However, the members of the organization may feel displeasure if the outcome for the decision is not positive and the leader may lose credibility. The other type of decision making is consensus. It occurs when the complete group is involved in the decision and the complete organization is responsible for the outcome. “This style is a joint effort between leaders, subordinates, and/or other stakeholders who provide the input to make a shared decision” (Department of Human Resources, n.d., p.8) If the members of the team cannot find the general consensus, the decision becomes democratic. It is not easy to obtain a total agreement; therefore the process can slow down the decision making. This style might be a considerable disadvantage when speed is critical. Collective-participative decision making is when employees of the organization are involved in the process. The leader encourages others for participating. Therefore, during collective-participative decision making, each team member can share the ideas, solve problems and make use of the acquired skills for improving the team effectiveness. However, taking into consideration all the ideas of the team, the leader alone decides.
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All styles of PDM have their advantages and disadvantages. Therefore, a good leader must analyze a situation and choose the most appropriate style of decision making for the benefits of the company. Why is PDM so effective and important? What is positive in the involvement of the personnel in decision making? How does employee involvement influence the businesses? These are the questions to be answered for understanding the importance of PDM and for providing successful management by the leaders.
One of the benefits of PDM creating positive effects for the company is instilling a sense of pride in employees. Participative management promotes increasing retention rates in employees. If the workers feel own importance while participating in decision making, it helps, as a result, to promote better productivity. The other specificity of participative decision making is its encouraging of communication among all levels of company staff. Communication results in more effective resolution of problems and better team work among employees. “Organizations that encourage a participative management style and more communication also find that their employees are more receptive to changes in the workplace, which helps maintain a satisfactory degree of productivity” (Jensen, 2011, n. p.). Besides the abovementioned benefits involving the employees in decision making, PDM promotes creativity and innovation increasing in the company. Taking part in decision making, the workers are allowed to speak openly and freely. This, as follows, fosters originality, variety of thoughts, out-of-the-box solutions and the unexpected way outs. Therefore, participative management that provides freedom of thoughts and ideas helps to create a motivating environment in the company.
There are two models of how participating works or how it benefits. The first one is the Affective model or, in other words, “Human Relations” theory, which proposes that PDM is an organizational practice satisfying higher-order needs of employees. The model is supported by the idea that happy workers are effective workers. It is meant that the participation will lead “to higher levels of productivity through intervening motivational processes” (Miller & Monge, 1986, p.9). It can be described in such an order: participation fulfils the needs, those needs lead to satisfaction, satisfaction strengthens motivation, and increased motivation improves productivity of employees. The second model is a Cognitive model, which is often called the “Human Resources” theory of participation. If workers participate in decision making, the resolution will be reached with a better pool of information. This can be explained by the fact that workers have more knowledge of their work than management. Thus, this model proposes that PDM improves the upward and downward flow of information in the organization. These, in their turn, factor into better decision making, increasing productivity and satisfaction of the personnel. “Increase in productivity and satisfaction in this model is attributable to the inputs from subordinates on issues in which they are interested and knowledgeable” (Miller & Monge, 1986, p.8).
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For some companies the concept of PDM is still a foreign subject. The management in such companies does not use the idea of PDM in their working environment. It is worthy of note that Participative management has some disadvantages. Thus, when many people are involved in decision making, the process considerably slows down. Another unfavorable fact in PDM concept is the apprehension of leaking out information of the company. Despite these drawbacks, the advantageous sides are evident. For good reason participative management can be termed as an ‘Industrial Democracy’. In modern companies, the managerial approach is to create democracy within the organization. Leaders run themselves democratically: they not only pay attention for the organization’s needs and goals, but also notice what people of the company require. This encourages an individual contribution in the things the company is doing. Democracy supposes that all levels of the organization work together for modifying activities and policies of the latter. Many companies have embraced participative style of management and, as a consequence are getting positive results. Thus, British Airways is a great example of PDM scenario. During economic downsizing, suggestions of employees “helped the company cut annual cost of its operations by 4,5 million pounds” (Management Study Guide, n.d., p.1). Thus, employee participation in decision making provides many benefits to the businesses and their members when managed efficiently. Innovative ideas, thoughts and concepts from the workers can help the organization stay ahead in competition of the market.