Archive: INDUSTRIAL DEMOCRACY: The Prospects for a Boardroom Revolution in Nigeria By Prof David Iornem

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For too long, managers have assumed that all wisdom resides in the minds of a managerial elite. This assumption flies in the face of grave realities. It is known that many employees know more about their jobs than their bosses. This fact of life should not be taken in bad spirit by mangers. After all, a manager has not necessarily got to know how to perform a particular function to be the manager of those performing that function… Managers should build respect for the employee’s workplace-the shop floor or the general office. Managers are quick to point to their open-door policy, meaning that any employee can come to see them at any time. Managers should now operate an open-floor policy. They should conduct part of their business at the employee’s “office”.

Worker participation or industrial democracy remains a subject of considerable interest, particularly as a return to free politics and the consequent emancipation of labour unions may well lead to demand on the part of workers to participate more actively in the affairs of the enterprises in which they work. Workers’ demands for a voice in the affairs of their place of work is as old as organized workers’ movement.

In the context of labour movement, industrial democracy has become popularly defined as a sharing of power by the majority of workers in decisions which affect them and which previously were regarded as the prerogative of a minority interest, that is, management.

As David Basnett has observed, the whole history of the development of the trade union movement has been mirrored in the history of the extension of worker participation.

Industrial democracy is a coagulated term. It means many things to different people. Several other terms are used to describe industrial democracy among which are worker participation and co-determination. The French literature on industrial democracy also makes reference to “autogestion”, meaning self-government.

Participation, in view of the Confederation of British Industry (CBI) covers a whole range of possibilities. It can be on a joint basis between management and workers with matters as mundane as canteen, welfare and parking facilities.

It can concern itself with conditions of employment that do not come within the normal purview of collective bargaining. It may, in appropriate circumstances, involve profit sharing schemes, and it must have an increasingly important role in the development of job enrichment, job satisfaction and motivation schemes.

In its most highly developed and sophisticated forms, it may include not only the disclosure and dissemination of information about a company’s finances, but joint determination of certain aspects of its organization, investment, employment, training and manufacturing activities.

Parker et al state:

“The concept of industrial democracy embraces at one extreme the demand for workers’ control involving an economic and social revolution of ownership and management. At the other extreme it may be a somewhat grandiloquent description of quite modest steps taken to meet the demand of workers for more participation in the running of otherwise conventional enterprises”.

Participation can be ownership in which case workers on shares in the enterprises; or it can be in government where workers are represented on the governing board of the enterprise.

Yet another form involves workers jointly (with managers) taking decisions in the affairs that directly concern their jobs on a personal or departmental level.

It should be pointed out that participation involving workers in the boardroom does not ipso facto involve workers in the other forms of participation.

Following indigenization, workers have had the opportunity to own shares in some companies. However, no company as far as it is known has done so much as to bring workers’ representatives onto its board. It is understandable that owners of an enterprise who take the risk would want to be in control of everything affecting it including decision-making. It is, however, morally questionable to exclude workers from the decision making bodies of the firms whose operations affect their daily lives immensely.

Through collective bargaining which the 1978 Trade Union Act made possible, joint control (workers and management) has been established over a whole range of issues – from rates of pay and hours of work to pension rights.

Over the years and through the collective action of the trade union movement, more and more issues have ceased to be the prerogative of management.

The balance of this century is going to witness yet greater pressure on management by workers wanting to be more involved in the affairs of the enterprise in which they work. Several factors will force management to surrender to such pressures.

First of all, the balance of the century will witness the growth of many more giant industrial enterprises of the order of UAC, Lever Brothers and the like.

This would mean that real economic power will rest with few individuals in the persons of directors and managers whose single decision in a single board meeting can have serious consequences on the fortunes of this country and its workforce.

When this situation is realized, the country and workers would seek to partake in such decisions. One way of doing so would be to seek the extension of areas of participating in the body politic and decision-making process of the enterprises.

Secondly, the concept of social responsibility of the industry will broaden to include worker participation in all its ramifications.

Already it has been noted that the power and complexity of the industrial enterprise and the remoteness of decision-making have led to demands for large companies to be more responsive to the needs of society in general and of their workers in particular.

Nigerian mangers must avoid the prospect of having to be forced by legislation into industrial democracy. Companies would be wise to prepare the ground before chance are thrust upon them.

The Nigerian industry will come more and more under pressure to consider the wider effects of decisions it takes in pursuit of profitability; and more and more companies will accept that they have responsibility not just to shareholders but also to employees, customers, suppliers, creditors, the local community and to society at large.

In a publication entitled “The Responsibility of the British Public Company”, the CBI states:

“The responsibility of the board to its employees are today different from but no less important than those which it must accept to its shareholders. It might be said that they are even more important, at least in the short term, as failure to achieve satisfactory working relationships with employees can put a board in a position where it will have great difficulty in fulfilling its obligations to its shareholders”.

This is a clear recognition of the increasing influence of employees through their trade unions.

But as Lord Bullock (1977) noted, it is also an acceptance of the principle that a socially responsible company in a democratic society cannot operate without taking account of the interests of its employees.

Thirdly, the imminent change in the composition of types of managers in the boardroom will also bring industrial democracy in Nigeria.

The next decade will see a gradual replacement on the board of the paternalistic managers whose traditional African ideology or culture makes them think and autocratically.

In other words, the new generation of directors and mangers will be different because of their education and their exposure to more social systems as a result of the explosion in communication and ideas.

Also, it is to be expected that women will find their way in higher places within the hierarchy of industrial management.

As women in Nigeria are not autocratic in nature, they will constitute a force that will water down the traditional autocraticism of Nigerian males.

One of the by-products of such a development might be more delegation of executive powers coupled with greater accommodation of employees on the board and in all matters of the enterprise in which employees may seek to have a say.

Further, it may be argued that workers will gradually improve their lot during the next decade to a point where they will no longer be satisfied with merely making a living from a wage.

If such a development comes about, the hierarchy of needs theorized by Maslow tells us that they will move up the ladder; which means they will ask for more and more of these things that were hitherto largely regarded as abstract in the context of workers.

These may include things such as having a voice in the affairs of organizations in which they work.

The Massive educational programmes being undertaken will also ensure that Nigeria gets a much more educated workforce in the not too distant future.

As democratic values seems to appeal to the generality of Nigerians, it is contended that no business can survive in Nigeria in the future unless it is run democratically.

The attitudes of such workforce will differ in many significant ways. In terms of more demands for democracy, they are likely to ask for a lot more than can be imagined today.

The effect of these social changes outlined above will be an increasing desire among workers to control their working environment and to have a say in decisions which affect their working lives.

The new breed of workers will become less prepared to accept unquestioningly unilateral decisions by management, and will show a readiness to challenge a decision if it seems to have ignored their point of view or to affect them adversely.

What we regard as traditional management prerogatives will, therefore, come under attack, and the new breed of management, if it wants to succeed, will have to develop a new style of management that promotes participative management which will recognize the necessity and benefits of involving employees in decision-making rather than imposing decisions upon them without adequate consultation.

Finally, legislation is likely to force industry to practice certain forms of participation. Already we have witnessed the case whereby the indigenization act has made it possible for workers to own equity in enterprises in which they work.

Recently a trade union act also created industrial unions and employers, associations for the purpose of joint negotiations. This is an important step towards collective bargaining which is a form of participations.

The industrial unions are going to seek to broaden matters that can be negotiated. Workers will no longer concentrate exclusively on questions of pay and conditions.

They will press for the extension of collective bargaining to cover decisions which have been traditionally regarded as the prerogative of management.

It is widely believed that people who are committed to the aims and goals of an organization perform better.

Examples have been given concerning the behavior of soldiers in wars. It is said that if soldiers do not believe in war, they are bound to lose.

It has been suggested that Americans, with all their military might, lost the war in Vietnam because there was very low morale among its forces. This low morale has been their combat as well as near total lack of backing by American people.

Jenks (978) states:

“Every generation in modern times had its war to contend with. But with the (American) Civil War, none of our other wars had been as stressful to combatants and combatants alike as Vietnam”

There seems to be a difference between being shot at in a “good” war and being short at in a “bad” war.

Whereas America had entered other wars with high ideals, patriotic fervor, flag-waving, and varying degrees of enthusiasm to save the world, they crept into the Vietnam conflict with half of the American people against it.

In this way the United States put its soldiers under severe stress of wondering why on earth they were in the predicament even before they came under fire.

Commitment is, therefore, as important in management as it is in war. Commitment, it is felt, can be obtained by the various ways ranging from simply allowing workers to decide when “tea-time” should be, share ownership, collective bargaining, to the more coveted and controversial board representation.

Further, it is considered a democratic imperative to involve workers in the affairs of their organizations. If Nigerian business is to survive without any kind of crippling power effect that characterizes autocratic organizations, then it must mirror the social values of the society in which it exits.

As democratic values seem to appeal to the generality of Nigerians, it is contended that no business can survive in Nigeria in the future unless it is run democratically.

Far more important, participation in some countries such as West Germany has, to all outward appearances, worked well. This record is connected to many, perhaps most observers with the harmony in industrial relations which the country has for so long enjoyed; and which has contributed greatly to the general prosperity of the nation, the profitability of business, and the high personal living standards of the Germans. Therefore, if there is need to improve the quality of life of Nigerians, there is a way and this participation.

If one accepts the premise that workers on their own will be forced by the forces of change to become gradually aware of the need, benefits and necessity of participation, one must equally agree that progressive management should anticipate participation.

This can be done by producing concrete proposals and strategies of implementing participation.

Participation should not be allowed to happen to management. It should be seen as receiving the enthusiastic support of managers.

How should management set about this?

Some companies already have what they call joint Consultative Committees hose membership usually comprises the personnel people and employee representatives.

The range of issues which come under discussion when these committees meet cannot be compared to the broad issues which industrial democracy implies.

To a large extent, these committees are mere gestures of a benevolent management. However, joint Consultative Committees are a good beginning and should serve as nuclei and a basis for further experimentation in participative management.

Managers should build respect for employee’s workplace – the shop floor or the general office. Managers are quick to point to their open-door policy, meaning that any employee can come to see them at any time. Managers should now operate an open-floor policy. They should conduct part of their business at the employee’s “office”.

Of greater meaning to the workforce is what can be termed “Relevant Participation”.

Managers should start including an appropriate cross-section of workers in meetings that are held to discuss matters which directly affect workers concerned and their conditions of work.

This would be an important way of industrial democracy in the sense that it can be considered perhaps to be more meaningful to the worker than any other form of participation in so far as it directly relates to his work or job situation.

This form of participation is likely to promote commitment, recognition and improved morale leading to increased productivity.

Managers should extend their so-called open-door policy to include matters such as designing jobs. Workers should be involved in designing their jobs.

For too long, managers have assumed that all wisdom resides in the minds of a managerial elite. This assumption flies in the face of grave realities. It is known that many employees know more about their jobs than their bosses. This fact of life should not be taken for in bad spirits by managers. Afterall, a manager has not necessarily got to know how to perform a particular function to be the manager of those performing that function.

The chief executive, in most cases, know next to nothing about secretarial duties and perhaps entirely nothing about typing both of which are tasks that may be performed by his very secretary.

Involving workers promotes commitment and also ensures that the reservoir of knowledge available within the section or department concerned has been adequately explored and probably sufficiently drawn upon. This form of participation also eliminates communication barriers and promotes understanding among employees, and between management and employees, of the implications and results of decisions.

Employees will execute decisions, having already known their roles and perhaps how to play them as well.

Participation by direct involvement in the employee’s work situation is probably the most fertile of participation grounds and certainly the most susceptible to easy implementation.

It can be practiced at all levels and stages of management.

It also does not require the approval of top management for its implementation since it is already a widely accepted fact that managers must delegate.

Before implementing industrial democracy in any form in an enterprise, the managers concerned should avail themselves of the rich experience of some countries in both the West and East.

The virtues of co-determination or “mitbestimmung” (German word for industrial democracy) practiced in the Federal Republic of Germany have been extolled by several observers.

It I left to Nigerian managers to study this and similar experiences with a view to seeing if there is anything to learn from such experiences.

It should be pointed out, however, that no foreign ideas should be imported into the country without intelligent discrimination. A wholesale transplant of foreign structures may not be ideal for the success of experiments in industrial democracy in Nigeria, since these structures are based on foreign cultures.

For instance, experiments in participation in the United States are based on their 200 years of democratic culture. This has made some firms to voluntarily go into participation agreements with their employees.

In most of Western Europe, however, the heritage of feudalism in the allocation of power, authority and wealth has created such an authoritarian management that only the powerful weapons of government are considered adequate to force the adoption of industrial democracy.

Nigerian managers must avoid the prospect of having to be forced by legislation into industrial democracy. Companies would be wise to prepare the ground before changes are thrust upon them.

WORKERS, individually and collectively, will have to choose to either remain outside the orbit of management decision-making and by that choice retain the right to question and, sometimes, veto management decisions; or they may choose to join the new democratic order and seek to influence those decisions and accept responsibility.

Where experiments in industrial democracy have been initiated, unions have sought to eat their cake and have it. They have wanted to be represented on the board and yet retain the right to question and reject decisions taken by the board in which they are represented. This is a case of authority without accountability which tantamounts to dictatorship.

Workers, whether on the individual level or collectively through their unions have to avoid giving this impression.

Trade unions purport to be championing the cause of socialism as can be observed from the recently published Workers Charter of Demands by the Nigerian Labour Congree (NLC).

If workers, individually or through their unions, agree to participate especially in ownership of enterprises and at board level representation in the management of capitalist organisations, it might be seen as amounting to a contradiction of their ideological stance.

This basic ideological conflict runs the risk of exacerbating industrial disharmony in the future. This line of thinking may probably work against the acceptance of industrial democracy by unions.

It is contended that this resistance will not go down well with the ordinary Nigerian worker for several reasons.

Although much is heard from some quarters about the need for a socialized state, a democracy with a left-wing bias and an attitude of hostility to private enterprises in general is highly unlikely to come into existence in Nigeria for many years to come – at least not within the balance of this century.

The typical Nigerian worker rarely dreams of a Marxist Elysium. More often he dreams of being a wealthy entrepreneur in a free society.

On the other hand, if workers own a good proportion of the equity in the companies where they work, and at the same time they are represented on the boards of such companies, the end result could be the watering down of the effects of capitalism on their lives.

It seems reasonable to say that a closer working relationship between management and the workforce is the only solution to some of the problems which Nigerian industrialists will face in managing the new breed of workers that is imperceptibly emerging.

Any company that ignores this will be putting its very survival at risk.

Unless the workforce is more involved in and informed about the operations of the company, it is unlikely to moderate wage demands, to agree to any changes affecting productivity levels that the company requires in order to stay economically viable, or to accept changes in work practices necessary to reap the full benefit of investment programmes.

Workers, individually and collectively, will have to make a historic decision. They will have to choose to either remain outside the orbit of management decision-making and by that choice retain the right to question and sometimes, veto management decisions; or they must choose to join the new democratic order and seek to influence those decisions and accept responsibility.

In other words, without a radical change in attitudes by management and workers, many companies could be brought to their knees after introducing industrial democracy.

The concept of participation implies radical changes in the roles of both managers and workers.

Effective participation can be achieved only through patient experimentation. This may take several years and that is why managers should evolve a system of participation of their quite independent of legislation.

Middle managers should have the force and commitment to act as catalysts in the process of initiating and implementing participative management precisely because they are the board members of tomorrow who are going to have to absorb the shocks of legislated participation.

Participation means hard work for employees, especially their representatives. They will have to acquire new skills if they are going to make their contributions and communicate with the people they represent.

Managers themselves will have to develop new attitude towards workers.

Some autocratic managers may find participation a better pill to take as it requires them to delegate much more than they are used to now. But since participation is going to be forced on organisations with time in one way or another, it is better to start experimenting now.

Nigeria is poised for developing into a strong democratic republic, and no business can survive in a democratic republic unless it is run democratically.

-Also Available at https://commonwealthuniversityblog.com/2016/09/14/archive-industrial-democracy-the-prospects-for-a-boardroom-revolution-in-nigeria-by-prof-david-iornem/

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