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Germans want companies to become more democratic

Two-thirds of Germans would like to see companies be managed more democratically through them electing their own bosses and having a say in the corporate strategy, according to study findings presented at an international conference held in Munich. Entrepreneurs, trade union officials, politicians and scientists met in Munich to discuss models and their impact at ‘The Democratic Company – Dawn of a New Humanization in the Working World?’, a conference organized by TUM, ISF München and the Human Resources Alliance.

Technische Universität München (TUM) and ISF München presented the study findings were the Federal Labour Minister Andrea Nahles called for the potential of digitalization to be used for greater freedom. Andrea Nahles, Federal Minister for Labor and Social Affairs, emphasized that, “democracy begins wherever employees are taken seriously as ‘citizens in the workplace’. Digitalization in particular has changed the working world and offers huge opportunities and potential for more freedom and a better work-life balance.” “A closer look is needed, however, all too frequently, autonomy in the world of increasingly interlacing areas is more illusion than reality. This is why we need a fresh compromise on flexibility. Institutionalizing co-determination at work is indispensable for sustainably anchoring this flexibility trade-off in companies, based on Germany’s Works Constitution Act, which is without a doubt one of the most important moves towards democratization that companies in Germany have ever experienced,” he added. According to Thomas Sattelberger, CEO Human Resources Alliance and former board member of German Telekom: “democratic companies are a new option for corporate development and lead to systemic competition, which Germany’s rigid business world will have to deal with. Especially companies that live from innovation or are in need of disruptive change are now challenged to empower talent. Social innovation in the work culture goes hand in hand with technological innovation.” The research results from TUM and ISF München presented at the conference confirm that employee expectations, company strategies, and effects of new forms of organization are often (still) incompatible. In a representative survey by TUM involving around 1,000 Germans aged between 18 and 65 years, some two-thirds of the respondents agreed with the notion, either fully or partly, that companies should be managed more democratically. The majority found the idea of choosing their own managers attractive, and even more so the thought of participating in determining corporate strategies. On average, however, they nonetheless viewed the possibility of their wishes coming true as fairly unrealistic. A third TUM study showed that in the competition for personnel and funding: the features of a democratic organization structure make a positive impression, both in terms of employer attractiveness and in the decision to invest in a company. Test subjects were around 200 students and young professionals, as well as 78 investors. Said Professor Isabell Welpe, head of the TUM Chair for Strategy and Organization, “wherever people’s perspectives differ, and where it’s important to bring knowledge together that is shared by numerous individuals, that’s where the democratic approach works well.” “Technical change alone, unsupported by social and organizational change, cannot work,” she concluded.

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