Workers' self-management

**Self-management** or **workers' self-management** (also referred to as **labor management**, **autogestión,** **workers' control**, **industrial democracy** and **producer cooperatives**) is a form of management that involves management of an organization by its workers. Self-management is a characteristic of many models of socialism, with proposals for self-management having appeared many times throughout the history of the socialist movement, advocated variously by market socialists, communists and anarchists.

There are many variations of self-management. In some variations, all the worker-members manage the enterprise directly through assemblies; in other forms, workers manage indirectly through the appointment of managers through election. Self-management may include worker supervision and oversight of an organization by elected bodies, election of specialized managers, or management without any specialized managers as such. The goals of self-management are to improve performance by granting workers greater autonomy in their day-to-day operations (self-directed activity), while reducing alienation and eliminating exploitation.

Self-management of an organization may coincide with employee ownership of that organization, but self-management can also exist in the context of organizations under public ownership, and to a limited extent within private companies in the form of co-determination and worker representation on the board of directors.

## Economic theory

An economic system consisting of self-managed enterprises is sometimes referred to as a *participatory economy*, *self-managed economy* or *cooperative economy*. This economic model is a major version of market socialism, stemming from the notion that people should be able to participate in making the decisions that affect their well-being. The major proponents of self-management and self-managed market socialism in the 20th century include the economists Benjamin Ward, Jaroslav Vanek and Branko Horvat. The Ward-Vanek model of self-management involves the diffusion of entrepreneurial roles amongst all the partners of the enterprise.
The economist Branko Horvat notes that participation is not simply more desirable but also more economically viable than traditional hierarchical and authoritarian management as demonstrated by econometric measurements, which indicate an increase in efficiency with greater participation in decision-making. According to Horvat, these developments are moving the world toward a self-governing socialistic mode of organization.
In the economic theory of self-management, workers are no longer employees but partners in the administration of their enterprise. Management theories in favor of greater self-management and self-directed activity cite the importance of autonomy for productivity in the firm, and economists in favor of self-management argue that cooperatives are more efficient than centrally-managed firms because every worker receives a portion of the profit, thereby directly tying their productivity to their level of compensation.

Historical economic figures who supported cooperatives and self-management of some kind include the anarchist Pierre Joseph Proudhon, classical economist John Stuart Mill, and the neoclassical economist Alfred Marshall. Contemporary proponents of self-management include the American Marxist economist Richard D. Wolff and Anarchist Philosopher Noam Chomsky.
Classical economics

In the 19th century, the idea of a self-managed economy was first fully articulated by the anarchist philosopher and economist Pierre-Joseph Proudhon. This economic model was called *mutualism* to highlight the mutual relationship among individuals in this system (in contrast to the "parasitism" of capitalist society) and involved cooperatives operating in a free-market economy.

Karl Marx championed the idea of a "free association of producers" as a characteristic of communist society, where self-management processes replaced the traditional notion of the centralized state. This concept is related to the Marxist idea of transcending alienation.

## Management science

In his book *Drive: The Surprising Truth About What Motivates Us*, Daniel H. Pink argues on the basis of empirical evidence that self-management/self-directed processes, mastery, worker autonomy and purpose (defined as intrinsic rewards) are much more effective incentives than monetary gain (extrinsic rewards). According to Pink, for the vast majority of work in the 21st century, self-management and related intrinsic incentives are far more crucial than outdated notions of hierarchical management and an over-reliance on monetary compensation as reward.