Really enjoyed this post Harold. I'm not sure if you're aware but here in the UK there has long been a tradition of democratic education and support for home schooling on democratic principles. In the 90's I helped set up and run a 'flexi colllege' for kids 7-16 along these lines, and issues of spatial design and utilisation were constantly openly discussed and acted on with the learners themselves. We were once visited by Ricardo Semler of Semco, as he was keen to use our ideas for his Lumiar school in Sao Paulo that he was then in the process of setting up. One of the best examples of the UK tradition that continues to survive (despite a policy climate rigged against it) is Sands School in Devon - http://www.sands-school.co.uk although this is outside the state-funded sector. But of course the home schooling movement is perhaps an even more interesting example of 'schools without walls'.

In terms of organisations generally I agree with your conclusion: structure is primary - this is what Deming advised in Japan, and why he mourned the pieties of 'Quality Circles' that became a mere cargo cult following of his original ideas. Semler of course went further with his democratisation of the workplace.