In different political theories, democracy is not reduced to state institutions, but includes the democratization of the whole society, its organizations and enterprises. This idea goes back to the beginnings of modern democratic theory and to Jean-Jacques Rousseau’s Social Contract. It was adopted by different socialist thinkers, later on by trade unions and, in the 1960s and 70s, by political scientists such as Carole Pateman and other promoters of participatory democracy. According to this tradition, workplace democracy is considered to be necessary for the realization of democratic ideals like individual autonomy, freedom, voice and participation in all relevant questions influencing citizens’ lives. Parts of this normative idea were realized by trade union movements and laws, especially in Western European countries. Nevertheless, workplace democracy in the sense of the above-mentioned theories remained far from becoming reality. In the 1990s, the idea was co-opted by organizational development and management studies and underwent a change: Workplace democracy, then mostly operationalized as limited participation, became a managerial tool that should help to increase employees’ motivation and efficiency and thereby contribute to entrepreneurial success. In the last few years, however, the original democratic ideal of workplace democracy seems to have been revitalized under conditions of a worldwide economic crisis. This article shows the development and the latest revival of the concept of workplace democracy, and discusses its innovative potential for today’s democratic societies.