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Industrial democracy is an arrangement which involves workers making decisions, sharing responsibility and authority in the workplace. In company law, the term generally used is co-determination, following the German word Mitbestimmung. In Germany 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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Rationale

Advocates often point out that industrial democracy increases productivity and service delivery from a more fully engaged and happier workforce. Other benefits include the following: 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 absenteeism; improved sense of fulfillment.

Codetermination

In a number of European countries, employees of a business take part in election of company directors. In Germany, the law is known as the Mitbestimmungsgesetz of 1976. In Britain a 1977 proposal for a similar system was named the Bullock Report.

Industrial democracy history

In late 19th century and at the beginning of the 20th century industrial democracy, along with anarcho-syndicalism and new unionism, represented one of the dominant tendencies in revolutionary socialism and played a prominent role in international labour movements. While their influence declined after the defeat of the anarchists in the Spanish Revolution in 1939, several unions and organizations advocating industrial democracy continue to exist and are again on the rise internationally.

The Industrial Workers of the World advance an industrial unionism which would organize all the workers, regardless of skill, gender or race, into one big union divided into a series of departments corresponding to different industries. The industrial unions would be the embryonic form of future post-capitalist production. Once sufficiently organized, the industrial unions would overthrow capitalism by means of a general strike, and carry on production through worker run enterprises without bosses or the wage system. Anarcho-syndicalist unions, like the Confederación Nacional del Trabajo, are similar in their means and ends but organize workers into geographically based and federated syndicates rather than industrial unions.

The New Unionism Network also promotes workplace democracy as a means to linking production and economic democracy.

Representative industrial democracy

Modern industrial economies have adopted several aspects of industrial democracy to improve productivity and as reformist measures against industrial disputes. Often referred to as "teamworking", this form of industrial democracy has been practiced in Scandinavia, Germany, The Netherlands and the UK, as well as in several Japanese companies including Toyota, as an effective alternative to Taylorism.

The term is often used synonymously with workplace democracy, in which the traditional master-servant model of employment gives way to a participative, power-sharing model.

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