Participatory Management is the practice of empowering employees to participate in organizational decision making.

This practice grew out of the human relations movement in the 1920s, and is based on some of the principles discovered by scholars doing research in management and organization studies, such as the Hawthorne Effect.

While senior managers still retain final decision making authority when participatory management is practiced, employees are encouraged to voice their opinions about their working conditions in a safe environment, protected from the potential defensiveness of middle managers who they might criticize.

In the 1990s, participatory management was revived in a different form through advocacy of organizational learning practices, particularly by clients and students of Peter Senge.

There is some criticism of participatory management , particularly because it is difficult to combine this practice with a more financially oriented approach to restructuring that may require downsizing.

To ensure that a matrix based organization functions properly according to business processes, a wholesale change in management philosophy is needed. Participatory management has to be introduced in which power is shared, everyone is given an opportunity to participate, work is conducted by consensus and multidisciplinary teams are utilized to implement processes.

Working in teams is not easy if the current hierarchical culture is maintained.

In order for a work team to be successful, the following are required of supervisors and team members alike:

Team Respect

Each member of the team has been selected because he or she has something to contribute towards achieving the objectives that have been set. Accordingly, regardless of the person's hierarchical ranking or academic qualifications, he or she must be respected and must respect the other members of the team.

Team Confidence

Confidence must be placed in each person's capabilities and in what he or she is able to and undertakes to contribute.

Sharing of Skills and Knowledge.

Since the team is multidisciplinary, each team member has to share his or her own knowledge and skills by teaching them to the other team members, and has to learn from the others any skills and knowledge that he or she does not possess.

Active Participation.

The group has to create a working dynamic such that everyone is able to take an active part. Anyone who does not take part is superfluous: the group does not need that person.

Everyone's Role

The knowledge that everyone depends on the group and that the group depends on everyone. Everyone has to learn that success or failure does not depend on him or her alone, but on each and every member. Everyone needs to learn to rely on everyone else.

Responsibility 

If success or failure depends on each member of the team, each must possess the sense of responsibility necessary to do his or her part and not to detract from the group's performance.

Leadership

Any group, no matter how self managed it may be, needs a leader who can serve as a guide, who can coordinate all the areas mentioned above and who can serve as the link between the group and the company's top management.