Should Businesses Be Democracies?

Last Updated Nov 1, 2008 7:00 AM EDT

CEO as dictator
A recent CEO Magazine poll revealed that CEOs favor McCain over Obama by a 4 to 1 margin. (This was first mentioned on BNET in the "Corner Office" blog.)

That business leaders (unlike doctors, lawyers, scientists, and most other educated professionals) favor the Republicans party is hardly news, of course. But nobody seems to be pointing out that there's an amazing irony here.

Two stated goals of the Republican party (and the Bush/McCain governing philosophy) are the promotion of free market economics and the extension of democracy throughout the world.

However, if free market democracy is such a good idea, why are most businesses run like military dictatorships?

Think about it! Most companies:

  • Are controlled by a junta of corporate "officers."
  • Strive for tight top-down financial controls.
  • Spy upon employee emails and activities.
  • Obsess endlessly about the chain of command.
  • Dictate rules and regulations from the top.
By contrast, I've seen very few companies that encourage internal competition beyond initial R&D efforts, and I've NEVER seen a company where the employees get to vote for the new President. Heck, even the stockholders don't get to do that.

It seems to me that if CEOs really believed the Republican "talk", they'd "walk the talk" and voluntarily set up their companies with internal free market economies and hold regular elections to determine who should manage each function.

However, since no CEO is willing to put his money where his mouth is, it's logical to assume that most CEOs secretly believe, consciously or unconsciously, that organizations are better off when they're run like military dictatorships.

With all due respect, I disagree. In my view, most corporations are successful in spite of top-down management, rather than because of it. In fact, I think that most businesses would benefit if the employees were running more of the show.

For example, we'd see a lot less obscene excess in executive pay packages (and the dysfunctional behaviors they drive) if the compensation had to be ratified by a majority of the employees before actually being paid out.

And if the "wisdom in crowds" theory is correct, harnessing the brainpower of a thousand sales reps, for instance, would result in better decision-making than simply relying upon the all-too-human reasoning of a CEO generalissimo.

But enough of my theorizin'. I'm curious what YOU think. Here's a poll:

[poll id=47]