67 Pages Posted: 19 Jan 1999
Date Written: September 28, 1998
Participatory management--the philosophy of involving employees in corporate decisionmaking--arguably is the most important industrial relations phenomenon of the last three decades. It has been endorsed by such disparate figures as President Bill Clinton and Pope John Paul II. Thousands of U.S. firms have adopted one form of employee involvement or another. Insofar as the academic literature on participatory management is concerned with normative questions, it is dominated by calls for some form or another of government-mandated employee participation in corporate decisionmaking. Normative analyses of participatory management by pro-mandate scholars have developed two justifications for government intervention: One sounds in the language of economics, typically arguing that participatory management is an efficient system of organizing production that is nevertheless being thwarted by various market failures requiring governmental correction. I have explored this argument elsewhere, concluding that government-mandated employee involvement cannot be justified on economic grounds [Stephen M. Bainbridge, Privately Ordered Participatory Management: An Organizational Failures Analysis, Del. J. Corp. L. (forthcoming 1998)].
In this Article, I evaluate the other set of pro-mandate arguments; namely, the claim that employees have a right to participate in corporate governance. On close examination, much of the normative literature on employee participation amounts to little more than "rights talk," i.e., political rhetoric dressed up in legal and/or moral rights terminology. For ideologically motivated proponents of employee participation, this is a useful debating tactic because our culture's fixation with individual rights imbues any rights-based claim with an air of legitimacy and incontrovertibility. Using rights-based terminology to phrase the question, however, often impedes or even precludes meaningful analysis. The task before us is thus two-fold. First, we must subject the claim that employees have a right to participate in corporate governance to a rigorous process of specification and assessment. Second, we must ask whether this right--as so specified--merits codification into positive law. I have two principal foils in this article. The first is Roman Catholic social teaching on work and capitalism, which offers the most fully realized statement of natural law principles applicable to the problem at hand. The second is a body of literature to which I will refer as secular humanist. This literature consists mainly of rights talk drawing on precepts of humanistic psychology. Although scholars approaching the problem from this angle thus are not working within a natural law paradigm, their work deserves examination both because it has certain superficial similarities with Catholic social teaching and because it represents the other dominant theory upon which rights-based claims are made in support of government-mandated participatory management. Although both the relevant Catholic social teachings and secular humanist arguments are complex and nuanced, both fairly can be said to emphasize two basic claims. First, participation is asserted to be an essential mechanism for full development of human personality. Self-realization and self-actualization are the conceptual engines driving this claim. Second, participation is posited to be an essential feature of human dignity. I have identified three basic ways in which participation might be related to human dignity: Participation may promote trust between employers and employees. Participation promotes workplace democracy. Participation rights protect employees from opportunistic conduct by employers. I argue only the latter theory rises to the level of plausibility, and it cannot justify government-mandated employee participation.
JEL Classification: J54, K23
Suggested Citation: Suggested Citation
Bainbridge, Stephen M., Corporate Decisionmaking and the Moral Rights of Employees: Participatory Management and Natural Law (September 28, 1998). Available at SSRN: https://ssrn.com/abstract=132528 or http://dx.doi.org/10.2139/ssrn.132528