Third Necessary Component:
Sharing Management-Level Information

One of the most common pitfalls in the operation of democratization schemes is an insufficient release of management-level information to employees. Workers and their representatives must be able to obtain all of the information necessary to make or to judge management-level decisions. Without such information, workers quickly find themselves unable to evaluate independently the issue up for decision and so are put at a serious disadvantage. In effect, the withholding of necessary information displaces workers from their position as co-managers and thus leads to the downfall of the system no matter what other efforts are made to maintain it. A clear case was the experience of Belgian works councils, where managers' reluctance to supply information destroyed workers' confidence in the system and so ended the workers' participation (Potvin, 1958). The retreat from participation reported for workers at the American Cast Iron Pipe Company* is another instance, occasioned by management's holding back crucial information from their worker colleagues on the board of trustees. Not only does participation end when information is withheld, but suspicion and mistrust between managers and the managed are generated that can reduce the economic efficiency of the firm for a long time to come. Such companies are then perhaps worse off than if they had never attempted conversion to democratization in the first place.

As we found for the previous components, the forms practiced within this component-category can vary widely. Though more research is needed to establish with certainty the minimal threshold for this component, the cases we have examined so far suggest the following rule. Any degree of access for employee-participants that is less than guaranteed access to the company books will not sustain democratization. This is so because workers cannot be influential in decision-making if control over their information is left to someone else. Managers, owners, specialists in "staff relations" all will have their own reasons for coloring and restricting the information given to employees. And when that information is restricted so too will be the workers' decision-making power. Therefore, the crucial demarcation line between democratized and merely participatory information systems seems to be that the ruled must have a guaranteed, irrevocable right to all information they feel they need for decision-making.

This principle is actually twofold: (1) the guaranteed, irrevocable right — is fundamental, and for all occasions; (2) the information required for decision-making — is

*Chapter 3, in Part I.