On Form and Function in Organization Theory

In current organization theory, 'hierarchy' is often associated with absence of intra- organizational democracy. The emergence of hierarchy is frequently seen as the consequence of control and domination aspirations of power-holders in the organiza tion. But is the elimination of hierarchy a necessary condition for the achievement of democracy? As this essay tries to assess, it is necessary to separate the existence of hierarchical form from the question of to what extent the organization can function in a democratic way. Transaction-specific phenomena and other 'inner-logical' factors preclude the elimination of hierarchy. Democracy in organizations, however, is less tied to particular organizational forms than to e.g. equal possibilities among organizational actors to control mandator positions. Labour-managed enterprises derive their democratic character not from being non-hierarchical, but from allowing their members the constitutional right to exert mandatorial power. Mandator positions are strategic for decision-making on e.g. distributional issues within the organization.