Participative Bureaucracy and Productivity in Machined Durable Goods

Drawing on my analysis of survey data from 1991 on a large cross-section of establishments in the machined durable goods sector, I find that group-based participative structures are combined in a new organizational form, the participative bureaucracy. In a participative bureaucracy, a formal system of employee participation in group problem-solving activities provides the opportunity to reexamine old routines and to take advantages of informal shortcuts that employees have worked out on their own. An important goal of this process is the establishment of better procedures that retain the advantages of bureaucracy associated with a highly specialized division of labor, formalization and standardization. Older, larger organizations in product markets where collaborative ties between firms are important to innovation are more likely to have the features of a participative bureaucratic structure. Many large, bureaucratically structured organizations are demonstrating a capability for adaptation and change and achieving new productivity advantages through participative structures. For small firms where information technology is being used to automate the machining process, the participative bureaucracy also enhances performance