Who’s in Charge: Power and Authority in Organization’s Using Consensus Decision-Making By William Holland ABSTRACT The desire for non-hierarchical, participatory decision-making structures has prompted some organizations to adopt consensus in their decision-making . This paper examines three organizations, private for-profit, governmental, and religious, currently using consensus in some aspect of their operations. Consensus decision-making implies a more egalitarian distribution of power. While this has advantages, it raises questions. The advantage of ceding power and control is increased participation, but this is challenging in goal-oriented firms. There is a trade-off between efficiency and participation. Using interviews with managers and participants three issues are examined: 1) how are power and authority negotiated; 2) what is the role of the executive or manager who has responsibility for the decisions and 3) how do participants perceive power relations within this context. In the past four years, 30,000 articles have appeared in the print media highlighting the movement within American business to empower employees. Employee participation ideology advocates investing employees with the autonomy and authority to independently make important decisions to further the organization’s interests. (Wetlaufer 1999). The public and management press is largely positive, workers are empowered, top-down bureaucracy is being removed and a new, flat organization is emerging. Understanding how individuals and organizations are evolving into new forms of business organization is, in itself, an appropriate topic for sociological inquiry. The new forms of management that are emerging reflect the latest adaptation to the fundamental question of the relationship between labor and management that has characterized inquiry since Karl Marx, Adam Smith and Max Weber. This project will examine how consensus – a particular form of worker participation - has arisen in three organizations and is presently being managed. This examination will be considered in light of the new employee and employer relationship and highlight the sociological dynamics at work in this changing relationship. Organizational Structure In the period from the 1950’s to 1980’s, America’s principle industrial enterprises were large bureaucracies. Characterized by written rules, specialized offices, a multi-tiered hierarchy, professional staff and universalistic tendencies, they typified the iron cage of classical sociological theory (Weber1958[1946]). The principle of rationality and organization appeared to be the most effective way to organize all forms of activity. Centralization of control and multi-leveled systems were inadequate to meet the fast changing demands of a consumer market, technology and a world market. While careful and redundant management and control were its principle attributes, the demand to create new, more loosely connected systems arose as a the ideological paradigm for organization. The multi-tiered system was ineffective in moving rapidly to respond to market demands. Reorganization, mergers and changes in organizational structure have resulted in massive changes. As management and employees seek to find a new dynamic tension, new sets and forms of relationships are emerging. On the one hand, reorganization has led to massive restructuring, downsizing and loss of employment security. On the other, the desire for increased competitiveness has led to calls for greater worker participation and empowerment in the workplace. As part of industrial reorganization and in the face of global competitions and shareholder demands for increased profitability, employers have engaged in a lengthy period of downsizing, labor force reductions, reorganizations and mergers that have changed many of the familiar firms in the United States. Two million jobs were eliminated in the 1980’s, one million of them in middle management. Half of the firms on the 1980 Fortune 500 were absent from the same list in 1990. More than 85% of the Fortune 1000 firms downsized their white-collar workforce between 1987 and 1991 (Noer 1993). This process has transformed the relationship between employers and employees with continuing ripple effects into loyalty, and job attachment. Predating this period of workforce reduction and continuing through it, many firms were adopting and promoting a variety of activities calling for greater worker participation. These calls were bolstered by an ideology that continuous quality improvement and team solidarity improves market position. These initiatives were aimed at encouraging greater employee attachment to and support for the productive processes and goals of management. While apparently contradictory, downsizing and worker participation, are interrelated responses of business enterprises to changing market conditions and represent the creation of new business standards. The substantial downsizing of the American workforce during the 1980’s, continuing to the present has substantially rewritten the employee contract between American workers and the firms that employ them. A new employee contract Historically the relationship between managers, professionals and their firms has rested upon understandings that date to the period when organizations were growing in size. Loyalty, commitment and dedicated work were rewarded with careers, security and meaningful work (Kunda and Van Maanen 1999). Long-term job security was a central part of this bargain. This historic understanding of the mutual commitments between employers and their managerial employees has been radically rewritten over the last two decades. As firms have reduced their white-collar work force, they have also voided the implied contract of work-place security and the expected normative behavior attendant to that understanding. While layoffs have been used by firms to control their blue-collar employment for decades, white collar and central employees were relatively immune to these labor fluctuations. The termination of employment of middle managers and central employees altered this understanding. Increasingly, tasks once carried out by central staff of the firm are being contracted outside the firm, completed by short-term employees, or by increasing the work loads of remaining employees. The emphasis is now on making employees “marketable,” that is, obtaining skills that will provide advantage in internal or external job markets. Rather than corporate loyalty and dedicated work, employees are encouraged to think of themselves and their units as products or services to be sold in internal and external markets. Emotional commitments are not solicited for the firm, but for the short-term projects being undertaken. Orderly career ladders give way to transient employment, often across multiple firms. In this new schema, the once privileged white-collar and middle management employees have more in common with blue collar and pink-collar employees. Consensus Consensus building is defined as “a process of seeking unanimous agreement. It involves a good faith effort to meet the interests of all stakeholders (Susskind 1999:6)” or “coming together of the sense of the group (Downey 2000).” While total agreement is the ideal, many practitioners agree one should “settle for overwhelming agreement that goes as far as possible towards meeting the interests of all stakeholders (p. 7).” The idea of consensus is not new. Many tribal societies work to create general agreement. Religious sects use it frequently. The Religious Society of Friends (the Quakers) since its establishment in Cromwellian England has used it most consistently. Quaker religious bodies and the educational and service institutions under their auspices have practiced consensus in their organizational decision-making (Sheeren 1983, Dandelion 1996). Even faculty bodies at Quaker colleges use consensus (Lacey 1982)! Efforts have been undertaken to teach this process in other settings (Snyder, Gibbs, Hillman, Peterson, Schofield and Watson 2001). In the 1960’s consensus and participatory democracy was touted as a means to create greater egalitarianism. Since the 1960’s two threads converged to bring consensus building into a broader public consideration. First the field of conflict resolution and research into teams has increased the visibility. Consensus building is gaining increasing prominence in contentious public policy debates, most notably in ecological mediation and community planning circles. The development of processes in which stakeholders can participate to seek agreements outside of the confrontational and litigious environment has resulted in some notable successes. Consensus building processes have been used in a variety of settings for affordable housing (Susskind and Podziba 1999), environmental planning (Innes and Connick 1999, Scher 1999), city planning (Parr 1999, Azel and Layton 1997) and health care (Hughes, Forester and Weiser 1999). The medical community has been promoting consensus building as the means to establish standards of practice. In 1995 the Uniting Church of Australia changed from Robert’s Rules of Order to consensus for their corporate deliberations (Wood 2001) and the World Council of Churches (Grace 2001) is presently considering adopting it. Second, consensus building is an essential part of the Japanese management ideology and has been imported into the United States through the Total Quality Management system. The initiatives to incorporate the Quality Circle approach have in part been driven by an ideology of participation and of consensus. While using consensus in decision making among a number of independent stake holders is one thing, implementing consensus decision making within an organization has a different dynamic. Organizations are bureaucracies and the hierarchical arrangement of offices and allocation of authority and responsibility lead to top-down decision making. Consensus models on the other hand, tend to encourage broad participation and power sharing. TQM and employee participation has been critiqued by both management and unions for its failure to deal directly with the issues of power. Management critiques argue that employee participation hampers management from making the decisions needed for economic competitiveness. Unions argue that such programs attempt to make employees part of management without additional compensation or power. The attempt to meld these two processes together goes to the heart of how power is allocated and how roles are mediated. At other times, consensus building processes are implemented in firms as an attempt to gain greater employee ownership and participation in the firm while the critical decision are retained by management. Levi-Strauss has received very positive press for its employee participation program. Mares- Dixon, McKay and Peppet (1999) report on implementing a conflict resolution program at Levi-Strauss at the same time an employee lay-off was being initiated by management. The desire of management for employee empowerment was subverted by its commitment to downsizing for profitability. Method and Organizational Descriptions In hour long interviews we explored patterns of decision making, how consensus is currently understood in the organization, what has been the experience of using consensus and an exploration of case examples. A limited review of records and policies has been initiated. Three organizations have been examined. 1. First, a small for profit Internet support company currently uses consensus among its management team. On establishing the organization, the owner, a member of a religious group practicing consensus, decided to incorporate the practices in the management decision-making. While the owner holds veto power and reserves the right to make decisions in the absence of a consensus, this has rarely been invoked. 2. Second, a religious service organization makes its policy decisions by consensus and provides three different alternative decision making processes for its staff – consensus, consultation and hierarchical. Organizational policies have been developed which lay out the three options. Less clear is the appropriateness of different processes to particular decisions, resulting in repeated conflicts. Many employees are political activists and organizers with both international and domestic work experience. 3. Third, an international public health organization has used consensus in its relationship with partner organizations and some managers engage in consensus in internal decision making. Employees are largely trained professionals many with advanced degrees in medicine and the social sciences. To date interviews have been conducted with the second and third organizations, and an exploration has been undertaken with the first. Three questions are explored: How are power and authority negotiated, what is the role of the executive or manager who has responsibility for the decisions and how do participants perceive the power arrangements within this context. Initial Findings While organizations appear to be embracing the ideology of participation and teamwork in relationship with their employees, real power sharing is not occurring. As a result, a three-stage process appears to be underway: 1. In order to improve employee morale and reflect current management thinking organizations embrace the current ideology of participation and consensus decision making. 2. While management claims to want employee input and collaboration, power is not distributed. When employee objections or alternative proposals are voiced, management asserts its authority. 3. Employee cynicism increases, job satisfaction decreases and job attachment decreases. Employees are deeply cynical about management efforts to establish consensus decision making. Respondents reported incidents of consensus being asked for a decision already made. Second, when objections were voiced and an alternate recommendation developed, the issue was withdrawn and a hierarchical decision made. Management espouses an ideology of participation in an effort to solicit and engage workers for the productive purposes of the organization. Listening sessions are held and employees are encouraged to be engaged in the processes. Direct line managers are often in the middle of conflicting demands. On the one hand, upper management demands accountability and production, on the other they demand inclusiveness and participation. The result is a classic role conflict. How do people manage in this setting? One successful strategy has been to adopt a more Japanese method. Rather than attempting to craft an agreement in a meeting setting, to meet individually with stakeholders, constantly modifying a proposal until all that is needed is a formal meeting to verify agreement. This is similar to the single text procedure propounded by Fisher, Ury and Patton (1991). Conclusion Organizations seeking to use consensus hope to garner advantage through the initiative and involvement of their employees. However, they have not been successful in ceding power. The result is that managers seek to have it both ways, retaining power and authority, while encouraging collaboration and consensus decision making. Unfortunately, this leads to inevitable conflicts as the curtain is pulled back. References: Bishop, Azel and Robby Layton. 1997. “Crafting Consensus on Controversial Parks.” Parks and Recreation 32(8):38-46. Dandelion, Pink. 1996. A Sociological Analysis of the Theology of Quakers: The Silent Revolution. Lewiston, NY: Edwin Mellen. Downey, Mary Ann. 2000. 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Susskind, Lawrence. 1999. “An Alternative to Robert’s Rules of Order for Groups, Organizations and Ad Hoc Assemblies that Want to Operate by Consensus” Pp. 3-57 in The Consensus Building Handbook, edited by Lawrence Susskind, Sarah McKearnan, and Jennifer Thomas-Larner. Thousand Oaks, CA: Sage. Weber, Max. 1956[1946]. From Max Weber: Essays in Sociology. Ed by H.H. Gerth and C. Wright Mills. New York, N.Y.:Oxford University. Wetlauger, Suzie. 1999. “Organizing for Empowerment: An Interview with AES’s Robert Sant and Dennis Bakke.” Harvard Business Review 77(1):110-123. Wood, Darcey. 2001. On Consensus Procedures. Geneva, SZ: World Council of Churches. Interview Schedule What decision-making process is most often used in your center? How is consensus presently understood in the organizations context? Wht has your experience been with the use of consensus? Can you give a specific example of when it was well used, used correctly? Can you give a specific example of when it was poorly used and/or misused? What would need to change for consensus process to be used more effectively? How are people currently being training in the consensus process? Does a group using consensus have the authority to make the decision? © William Holland, 2001.