The employees work together to find solutions that cut costs. That might involve sacking some people, but it might also involve people volunteering for a temporary pay cut, or renegotiating with a landlord, or a million of other things that reduce expenses.
What never happens, though, is that the CEO "sends people to the chopping block" to protect his own bonus.
I think it's the least bad form of governance for states because it seems to result in atrocities and genocide less regularly, but when it comes to other systems, (such as businesses) centralization and hierarchies are far more efficient and the decision makers are generally much more informed with the relevant data. With democracy, you spread the decision making across a vast number of under-informed people, which seldom results in superior outcomes.
Sure, incentives matter, I agree with you there. But the incentives aren't corrected when you add a democratic vote of all employees to the mix. The incentive alignment stay the exact same, where everyone is trying to save their own skin even at the expense of others or the firm as a whole. The only thing you've changed is reduce the liklihood of a data-driven decision, and increased the cost, complexity, and response time of dealing with dynamic and rapid changes affecting the organization.
Efficient at what? Dictatorships are efficient at maximizing centralization power (and therefore creating wars), not efficient at making citizens happy.
Private companies are efficient at maximizing profit for the shareholders, not efficient at making employees and customers happy.
> With democracy, you spread the decision making across a vast number of under-informed people, which seldom results in superior outcomes.
Wrong. You are trying to applying direct democracy at specific, technical decisions. This would be like passengers on a flight voting on what flap configuration to use.
But democracy is not the Borg and does not automatic mean "everybody decides everything together". Specific knowledge and division of labor can still exists.
See, I would argue the exact opposite. In a feudal hierarchy, the people making the decisions are usually the ones with the least relevant information -- or in the best case, with the most outdated information.
Hierarchies are great at distributing information downward, but not particularly good at aggregating it upward. This is often for power gradient reasons: people enhance the truth to look better when communicating upwards. Even when people communicate honestly, there's a lot of context and nuance that gets lost as a message travels from person to person.
In an actual democracy, you'll generally find that the people with the best view of the information and consequences of the decision (by virtue of being the ones affected by the decision) are the ones to make that decision.
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Edit: I think I see where the misunderstanding comes from! In your typical corporate hierarchy, the people at the bottom usually don't care about understanding the information that is needed to make a decision -- because they won't be asked to have an input on that decision anyway.
In a sense, the corporate hierarchy is a self-fulfulling prophecy. By dumbing down the role of the employees and preventing them from having any real responsibility, the employees turn into mindless ass-covering robots without responsibility, and then the corporate hierarchist uses the argument that "democracy doesn't work because employees are just mindless robots that cannot take responsibility."
My experience is that when you give people authority over their own selves with a "I dare you to be responsible" what happens is that most people, well, are very responsible.
People get together for common causes and sometimes they need to be reminded what that common cause is, but once they have that in mind, they're fairly good at cooperating productively.
Because of autonomy: The only people making a decision should be the ones effected by it.
