Earlier quoted context omitted.
Its a different industry, but take a look at Semco SA: http://en.wikipedia.org/wiki/Ricardo_Semler Their industrial democracy approach has scaled quite well, with 3000 employees.
Definitely a great example... but I find it disappointing that it is pretty much the ONLY example of this kind of company at that kind of scale that is brought up when topics like this are discussed. If it worked for Semler, why hasn't anyone repeated it?
http://en.wikipedia.org/wiki/Worker_cooperative
I think the biggest reason most companies don't recreate Semco's example is that nobody wants to think of themselves as expendable, especially people who can decide whether they're expendable or not, as the top management positions of a company are in a position to do so.
By saying "yes, our employees can make these decisions without us, we just have to give them the structure and support to do so", people at the top are admitting that they're not as important as our society tells them they are.
In Semco's case, Ricardo Semler was happy to admit that, because he felt the stress of running the business was killing him, and he welcomed the idea. A lot of people in his position would take anti-anxiety medication and something for acid reflux, and keep going, convinced that their position holding the reins is indispensable.