Appropriate use of Transparency in Organizations
Transparency is often cited as a prerequisite for an organization to be deemed successful. Trust and transparency are also seen as the missing key ingredients in the workplace. In spite of all the efforts by managements to increase transparency in the organization, less than half of employees truly trust their employers.
However, there arises a myriad of problems when the leadership and the organization in general are too transparent. Transparency in the office should follow a distinct matrix to ensure that the right levels of transparency are administered in the workplace. The key for every manager is to exhibit behaviors that most people would associate with transparency and trust.
Good transparency involves sharing information about the company’s strategies and goals across the entire organization. Information sharing should not be limited to sharing the company’s financial records with the employees. Rather, information sharing encompasses sharing information on the corporate strategies being employed as well as the means the company intends to use so as to achieve its goals. Transparency of this nature helps all the employees build a relationship with the company because they trust the institution.
Good transparency fosters trust within the walls of the organization, builds loyalty amongst the employees and creates a unique and better working environment. Reverse accountability is also enhanced when there is an open and transparent business structure.
There are various ways in which the management can increase transparency in the organization. The management should identify the early warning signs that the workplace is an environment of distrust and disharmony. The management should also induct the employees on the value of creating workplace relationships based on trust as well as engage in trust building activities in the company. The leadership of the company should also always inform all the employees on its point of view on different work-related issues and welcome the rest of the staff to give their opinions on the same (Gjesdal, 1982).
Like with every other leadership concept in business, transparency does have its downside. For instance, some capable managers might shy away from managing institutions with high levels of transparency. They prefer to work in tight-lipped environments and this has fostered their managerial success in the past (Rayo & Segal, 2010).
There are also instances where too much transparency is a problem for the organization. Transparency is not a good strategy when the information being shared could be detrimental to the company’s competitiveness. Information such as this needs rigorous guarding even from employees for the business to remain competitive and viable in the market.
In addition, full disclosure on financial information especially about investors and shareholders can raise questions about some of the company’s partners. This may lead to unnecessary investigations into the investors revealing private financial information that they may not have wanted to be made public.
Gjesdal, F. (1982): ’Information and Incentives: the Agency Information Problem,’ Review of Economic Studies 49, 373-390.
Rayo, L. and I. Segal (2010): ’Optimal information disclosure,’ Journal of Political Economy, 118, 949-987