Leaders in emerging markets have a unique opportunity to shape not only the culture of the organizations they lead but also the broader societies in which those organizations operate in. In countries with authoritarian pasts, particularly, a democratic approach to business can encourage democracy beyond the business itself.
I have witnessed this firsthand in Iraq, where multinational corporations and non-governmental organizations from Western countries are contributing to broader shifts in politics, policy, and society as a whole. These Western organizations are already accustomed to business norms associated with democratic principles, such as transparent communication, financial disclosure, and proactive feedback loops. By introducing these customs to emerging markets, they set an example not only for businesses but also for government.
Such efforts don’t just benefit the societies they serve; they also benefit business. When foreign companies invest in the countries where they operate, rather than simply extracting resources, they are able to build lasting local relationships. This builds the cultural intelligence needed to avoid the misunderstandings and failed projects that plague companies taking a purely extractive approach. A positive cycle results, as both organizational performance and societal progress are strengthened.
Iraqi Voter Engagement Initiative: An Example of Democracy Building in Action
Democracy building is too big a job for any one person, organization, or government to accomplish alone. In historically authoritarian environments, private companies can help advance the cause. One powerful way to do so is through direct civic engagement. An example is the Iraqi Voter Engagement Initiative (IVEI), a privately led endeavor. Launched in 2021, IVEI was established with the goal of increasing citizen participation in democratic processes.
To this end, IVEI sponsored a field study to determine what Iraqis knew about the candidates in the 2021 parliamentary elections. The study revealed a limited understanding of the opponents in the parliamentary elections due to the limited information available.
To remedy this, the IVEI team created a website to help fill in the gaps, including information like what party each candidate was running for, their platform, and so on. By creating accessible information where none had previously existed, IVEI demonstrated that transparency was achievable, even in a country where it had historically been absent.
Three Business Practices That Build Competitive Advantage and Boost Democracy
I have seen many multinational corporations in Iraq engage in authoritarian leadership practices, usually to their own detriment. Instead of top-down, hierarchical approaches that mirror old authoritarian regimes, my experience has shown that a servant leadership-style approach is significantly more effective.
Servant leadership is more democratic than alternative top-down leadership styles. By flattening hierarchies and empowering team members, leaders model the same transparent, participatory principles that underpin healthy democracies. Here are three practices that can strengthen organizational performance while advancing democratic values:
- Proactively soliciting feedback: Authoritarian leaders don’t seek feedback—democratic-minded ones do. Establish systems for feedback, ranging from one-on-one meetings to anonymous suggestion portals. This helps to reduce the high power distance typically found in bureaucratic structures.
- Encouraging participatory decision-making: Go a step beyond soliciting feedback and invite team members to participate in decision-making to break down hierarchies further. To create the right conditions, avoid micromanaging and empower team members to call the shots when appropriate.
- Promote transparency and knowledge sharing: Instead of gatekeeping information, embrace transparency. Public companies in the United States are required to disclose financial records, for example, and many will disseminate news on project updates, leadership changes, and other key developments that can inspire investor confidence. Mirror this approach in business for greater transparency.
Building Sustainable Success through Democratic Practices in Emerging Markets
Internal business practices like inviting feedback and sharing project updates may seem small, but they can be significant in an emerging market like Iraq, with its history of authoritarian regimes. Such organizational democracy can also help spur change beyond the organization. Ultimately, both businesses and societies benefit, as stronger organizations help build stronger democracies, and stronger democracies create more stable, prosperous markets for business growth.