Employee Participation in Decision-Making: Evidence from a State-Owned Enterprise in Indonesia

Over the last decade an era of political reforms has been sweeping through Indonesian society. This has not just involved change at the level of how government is conducted but has seen a change in the whole social and political atmosphere. One of the most significant changes is related to democratization of organizational behavior. Many organizations are now trying to transform from the old custom of authoritarian organizational style to a way of working, which is more democratic and participative. They are allowing their employees to contribute opinions and some are beginning to involve employees more in the process of making organizational decisions. This article looks at two state-owned enterprises in Indonesia, to see what impact these trends actually have in the real life of both the organization and the employees. It reports the positive findings of a relationship between employee participation in decision-making and their motivation.1. INTRODUCTIONThere is a line of logic which supports the view that an organization will benefit from the collaboration between managers and employees. Scholars have long argued that there is a close link between organizational effectiveness and individual effectiveness (Cotton, Vollrath et al., 1988). This implies that in order to achieve organizational goals, managers must treat their employees fairly. In the hierarchy of needs, employee involvement in organizational decision-making finds an adequate place (Mitchell 1973; Vroom 1974). It might be expected that being involved in decision-making will be challenging for many employees and that at the same time it might increase their motivation (Ladd M Zainnudin & Isa, 2011), commitment of the employee as well as their motivation (Batthi & Qureshi, 2007). Recent studies in Indonesia have found that many organizations do not assign a high priority to gaining and using their individual employee's commitment as part of a strategy to increase their effectiveness and therefore their competitiveness (Yuliani, Prihanto et al., 2003). Furthermore, it has been found that although some organizations have implemented participatory programs, employee's commitment in gaining full involvement decreases as the organization structure is built. This commonly happens in Indonesian stateowned enterprises (SOEs) which traditionally have a highly structured bureaucracy. Other studies have found that managers in Indonesia are likely to view any policy to introduce a better corporate governance climate for workers in their organizations as a personal setback for them, and therefore are likely to find ways to ensure that the policy does not carried out/enforced. This accords with the generally held view by those in positions of leadership in Indonesia that workers as individuals are morally obliged to follow the rules of bureaucracy and that they need them to give them proper guidance (Moeljono, 2003). Where managers hold these views, they not only fail to look at the broader picture that involving workers in the decision-making process of a company will improve those processes but they also miss an opportunity to increase workers' motivation to work.Although this might be acceptable in a culture emphasizing individualism, it does not apply to the more collectivist cultural environment of Indonesia (Irawanto, 2007). The overall picture of Indonesian culture, following Hofstede's classification, is that is a culture of a high power distance, high ambiguity avoidance and a very feminist culture, which leads to dependency on the system/structure of the organization (Hofstede, 2007). Recent studies have also found that the collectivist dimensions of Indonesians working in the public service is rather high rather, as compared to their counterparts in the private sector (Irawanto et al. …