Morning Krishnan, 

Think of the institutional theory and its related concepts of information asymmetry, moral hazard and hidden action. It is an old theory but, as to me, it gives a clear answer why open and transparent should exist.

Concerning the product: think of the status and image of firms. Remember VW and the recent scandal of fuel usage by their cars. Had they communicated it directly, people would trust them more (buying products, investing in shares). Since they did not communicate it until the crisis appeared, the support of stakeholders disappeared.

A contrary example if Samsung GALAXY Note 7. Although they have lost some trust, they seem to manage it effectively through acceptance of the fact of the problem and through fast response to the situation.

Sincerely,

Eugene 

Thank you Yevgen Bogodistov, you had well laid down the recent incidences. May be there are many to come in the future.

Trust and transparency have become popular workplace demands as employees seek to be aware of what is real and true.   People have grown tired of surprises and want to exist in a work environment that allows one to have greater clarity of thought – by eliminating the unknowns that continue to creep into our minds with each decision we make or relationship we foster.   If you survey the workplace, besides the need for job security and career advancement opportunities – employees want to be a part of a workplace culture that puts a premium on delivering the truth.  They desire their leaders to be proactive in sharing where the company is headed and forthright about its future.   In other words, they just want transparency so they can plan and protect themselves.

Here are five powerful things that happen when a leader can be transparent:

1.     Problems Are Solved Faster

2.     Teams Are Built Easier

3.     Relationships Grow Authentically

4.     People Begin to Promote Trust in Their Leader

5.     Higher-Levels of Performance Emerge

Efficient problem solving + the ability to build teams easier + the development of authentic relationships + trust = higher levels of performance. 

http://www.forbes.com/sites/glennllopis/2012/09/10/5-powerful-things-happen-when-a-leader-is-transparent/2/#5d4171aa17ed

transparency should require in every aspect whether it is any business. if that was not shown to the people. they dint believe the product, company or any organisation.

once the customer or person got the satisfaction of services provided by the company, he trust the services then he will become loyal to that one.

so accuracy and transparency is very important in business.

Any organization which is transparent can never be deceptive. People will place their trust on such systems. In the melee, the system will run efficiently by doing good performance in terms of profit.

Dear Dr Krishnan,

Organizations rely on building Corporate Governance to align performance to corporate objectives, measure the said performance and even more importantly ensure basic performance in the organization. All the three goals require Good Corporate Governance which relies on transparency and honesty in Governance. All the successful Balanced Scorecard Performance derive their insight from honesty and transparency of links in the organization. Good Corporate Governance that can be measure by balanced and unbalanced indices or through forthright Econometric processes like PCA still rely on basic objectivity that derives from honesty in our dealings and fairness of treatment which is also a derived construct of honesty in dealing as well as accountability and responsiveness.

While these have bearings for all stakeholders including suppliers and employees, all these measure directly and through other stakeholders influence customer/client/consumer attitudes about us. While developed markets have multilayered institutional frameworks to design the appearance of honesty to the consumer/customer such as the FCC or the various Trade commissions and DoJ, Markets like India and China rely more on the Fourth estate or the media, voluntary organizations  and even the political establishment for the policing of such fairness and honesty measures at all interfaces. 

Brands are built on the values of honesty and fairness because performance is easy if what you are saying is also what you are doing. Episodes like Samsung Note 7 or the Hyundai / Honda recalls are more about testing the institutional interfaces for Transparency across International borders. That makes it difficult to organise the results in the silo for transparence. However transparency reflects in more than recall decisions. Transparency is reflected in each quarterly financial and indeeed every sale that a company makes. 

I think, in today's time, transparency must be practiced by organizations as a VALUE for the following reasons:

--Shows allegiance to CSR

--Ethics

--Shows honesty to customer; thus enhances her faith in the company

--Creates a peer pressure on all organizational members to uphold its sanctity

--It reflects the first step towards building a learning organization

--Helps build Firm brand

Why should organizations be transparent ?

Reasons why organizations need to be transparent (Berg, 2011) include:

See link below for detailed explanation:

http://www.cmswire.com/cms/enterprise-collaboration/3-reasons-why-organizations-need-to-increase-transparency-011886.php

Think following initiatives can contribute organizational transparency:

Friends please see the article on global cola company attached with the question, which is quite alarming. 

Nice Question. Thank you.

Transparency is the key to quality in each domain.

Yes, very alarming. It´s quite sad really, this time in history still feels really backwards. Products that nobody needed on the first place do become (self)imposed necessities which on the long run, might be hazardous at other levels too.  

Can you imagine what we´d think of an ancient culture built around the values that we´ve been promoting as producers and consumers for the last few decades ? 

Transparency starts within and might only happen through a change or paradigm - our collective consciousness must evolve to make of life-affirming choices and technologies a necessity, or at least a priority. The question must shift from ¨"is it financially viable ?" to "how would nature do this ?":

From degeneration (production of "goods" for profit) to regeneration (biomimicry and bioinspired innovation) 

I wonder how much longer we can continue suppressing this main challenge we all face (and that directly affects all those who come after).

Thanks for your question   

Organizations need to be transparent in order to gain trust and confidence of the stakeholders. Further transparency and ethics are inseparable. Thus a transparent organization is an ethical organization. Organizational transparency leads to ethics, sustainability and distinct corporate identity.

Transparent organizations stand on themselves and they have nothing to conceal. It is actually a sign of the strength and character of the organization.What is there to hide really?! The Annual published reports are available. Profile of key employees are available with all recruiters. So, by being transparent organizations have only to gain in terms of corporate image and a possible choice of entry for new recruits with good caliber.

Enclosed input of Cornelius Du Preez

Transparency is something that can address various issues in an organisation. This case appears to tough on the transparency between supply and customers.

In this day and age customers want to know what's in the products that they consume. There are many concerns these days, like genetically modified food band in EU but still strong on the bandwagon in the US. Livestock treated with growth hormones and weird steroids, without any consideration how to fix the consumer.

Besides the MEL-4 for colouring agent there is way to much sugar in it to be consumed. The concerning thing is that doesn't even stop there. It's competition Coca-Cola makes a whole heap of other drinks that's in my mind somewhat questionable. However I don't have any proof of it, and stop supporting either of the two companies long ago.

I have to say there supply chain distribution networks are amazing, and and they do what any great organisation would do that is to supply the demand. Let's face it how many people stopped smoking, since the printing brought on to the cigarette packets smoking kills.

I believe that suppliers must be transparent about the product they supply to the end user, so that the consumer can make a well grounded choice when they purchase a product. If the demand for a product reduces the manufacturer will look more seriously to fix fix what causes the reduction in market share.

This goes for the electronic sector, automotive Industry, and I bet you can think many more.

So in short shoot organisations be transparent to a close sell to the customer definitely use. An informed customer cannot blame the supplier for any risks after being warned.

One organisation should be transparent to become more responsible, accountable, beneficiary friendly, highly result oriented also.  

Transparency is critical to open communications.  Without it we are doomed to relationships based on control, leaving fiefdoms, and borders that inhibit productivity and innovation.  Dr. Hamel wrote a remarkable article about the topic, see:

Hamel, G. (2009, February). Moon shots for management. Harvard Business Review. 91-98. Retrieved from http://www.hbr.org

Dr. Dan Holloway

Dear Krishnan,

I tend to agree with you. But the problem is one of self regulation. This is the only solution to being transparent. Enforced Transparency will be transient!

Dr.K.R.Subrmanian

transparency is hard to capture in just one sentence. It is about sharing all the information the receiver wants or needs, and not just the information that the sender is willing to share. It is about putting all facts on the table, even when some of them are uncomfortable.Regulatory requirements, customer demands, media attention, non-governmental organization(NGO) advocacy, product recalls, and market opportunities are driving companies to know more about the chemicals in their products and supply chains. If companies employ passive strategy about chemical in their product,it  leaves  companies vulnerable to the hidden liabilities of chemical concerns in products and supply chains, and unprepared for swiftly changing market demands and regulations, where as the Active Strategy creates long-term value for companies and shareholders by enhancing brand reputation, increasing sales, creating innovative products, increasing supply chain reliability, and avoiding the high costs of chemical crises.

these are some of the excerpts from a report, which I am attaching here

Another way of looking at Transparency is to see what happens when the company is not transparent. The consequences of concealment of information from customer and public is everyone's knowledge. So, it appears to me that companies have no other way, because if not today, the regulators re sure to catch up. Then what ?!

Dr.K.R.Subramanian

Professor of Management and Ex- Vice President Reliance Industries.

You might be interested in the attache paper on open innovation alliances and communities.

Thank your Dr. K R Subramanian, for self regulation, it is the Independent guardian of the ethical needs of the organization to protect consumer, impose proactive corrections and be conscious of sustainable growth

I agree with you Dr.Krishnsan

Regards 

Dr.K.R.Subramanian

Transparency serves to assist in ensuring good corporate governance (Millar et al, 2005). Furthermore, as Kirby (2012) has pointed out, the greater the transparency, the greater the trust which is intertwined with transparency.

•  Kirby, J. (2012) Trust in the Age of Transparency, Harvard Business Review, 90, 7/8, pp. 158-159.
• Millar, C. CJM. , Eldomiaty, T. I., Choi, C. J. and Hilton, B. (2005) Corporate Governance and Institutional Transparency in Emerging Markets, Journal of Business Ethics, 59, 1-2, pp. 163-174.

There is an inherent link between transparency and good governance. If an organization can win employees' heart and trust this will translate into an intangible asset which no competitor can ever take. An engaged, motivated workforce in contemporary times  is a great strength.

People are living on risks by consuming

A government study has found five different toxins — heavy metals antimony, lead, chromium and cadmium and the compound DEHP or Di(2-ethylhexyl) phthalate — in cold drinks produced by two major multinational companies, PepsiCo and Coca Cola.

The study, commissioned by the top Health Ministry body, the Drugs Technical Advisory Board (DTAB), found that these toxins leached into five cold drink samples picked up for the study — Pepsi, Coca Cola, Mountain Dew, Sprite and 7Up — from the PET (polyethylene terephthalate) bottles they were in. Mountain Dew and 7Up are owned by Pepsico, while Sprite is owned by Coca Cola.

http://indianexpress.com/article/india/india-news-india/toxin-in-pet-bottles-of-soft-drinks-pepsico-coca-cola-mountain-dew-sprite-3067617/

Dear  Krishnan Umachandran,

Transparency is a comprehensive response. It is implemented through the alignment of policies, procedures, and the development of practices that allow citizens to have access to information, which manages power (public or institutional), the use of this information provides an understanding of it, and this information should be information nasyschenayu and controlled. To achieve the goals of transparency is also necessary that was built mechanism of feedback from the community to the government.

Transparency is a common requirement in a democratic society. The right to be informed and to have access to information is an important issue in today's society.

Transparency and ethics organizations defined measure of truth (if the truth is measurable and what degree of objectivity). Transparency also makes it possible to analyze how the organization is associated or affiliated with stakeholders. The impact on the organization of affiliated parties must be analyzed for how the organization acts in the best interests of society, such as ethical actions, and how these actions are institutionalized (integrated in the organization).

Public transparency enables citizens to be more aware of and encourages the disclosure of information, power, acting as a regulatory mechanism. It is based on ethics and governance principles, according to which the interests and needs of the authorities focused on citizens.

Regards, Shafagat

Krishnan:

There is am excellent article by Dr. Gary Hamel regarding the subject:  Moonshots for Management 2.0.  The article has depth and is a synopsis on the subject from business leaders and scholars.

Dr. Dan Holloway

Dear Daniel, can you pass me a copy of it, that could support my research article

Krishnan:

I'll need to find it.  It was reproduced and might be available with a general web search, try Moonshots for Management.DH

Please check if this is the one

Moon Shots for Management: Management 2.0

In May 2008 a group of 35 management scholars and practitioners – including such gurus as Chris Argyris, Henry Mintzberg, Peter Senge, Gary Hamel and Kevin Kelly – spent two days at Half Moon Bay, California, where they created an ambitious agenda for management innovation.

http://www.greatleadershipbydan.com/2009/04/moon-shots-for-management-management-20.html

It looks like the right one.

Dear Dr. Umachandran,

Transparency in organizations is a vital part of consumer protection systems and  became an inevitable necessity to business flourishing. This subject is gaining more interest by different community sectors. Please check the following links.

Best regards

SM Najim

https://weatherhead.case.edu/departments/organizational-behavior/workingPapers/WP-10-09.pdf

http://jom.sagepub.com/content/early/2014/03/06/0149206314525202.abstract

http://www.enpc.fr/ceras/jehiel/transp.pdf

http://dewconsultants.com/files/Organizational%20Transparency.pdf

http://www.forbes.com/sites/jacobmorgan/2016/02/10/too-much-transparency-organizations/#27f50baed265

It is very important to innovate. But there is a tendency to ape the western school of thought. and the other bottleneck is using time and tested methods in B-Schools which have become archaic. Encouraging new thoughts is not possible where hierarchies are rigid and rank and file is promoted while paying lip-service to creativity and insights.

Information systems need to supply allergy by work it possible to trace a piece of information back to its author.The information becomes more reliable.

 Regards

KS Al-Niaeem

From @Sheldon Weeks

Sixty years ago I supervised a project that took volunteers in to Manhattan State Hospital to participate in recreational therapy with psychiatric patients. Our most famous "client" was a man who was an habitual escapee and who occupied himself when free in New York City to writing on the opposite walls of subway stations in bold letters PEPSI COLA IS POISON. He was the first graffiti artist in the city's extensive network of subway stations. He would eventually be caught and returned to the hospital. Invariably he would find a way out and off Ward's Island and back underground to pursue his art. The moral of this story is "how did he know sixty years ago what is now being revealed as true?"

https://www.researchgate.net/profile/Sheldon_Weeks

Nice information Prof Sheldon Weeks, your recall of 60 year old information is much appreciated and valuable

regards

Sorry, dear Salah, Timira and Khalidah for responding late, thank you all for the informative posts.

regards

Pepsi & Coke were not transparent in the past , nowadays,  they are revealing facts.

There is an inherent link between transparency and good governance. If an organization can win employees' heart and trust this will translate into an intangible asset which no competitor can ever take. An engaged,

Sharing link:

https://www.entrepreneur.com/article/245461

Regards!

1. Make Information Actionable

The ability to act on information is what often separates successful companies from those less successful. Yet, many people don’t because they distrust information,

2. Enable Sharing and Collaboration

If organizations are to succeed in improving their responsiveness, productivity and ability to innovate, they need make full use of its main assets -- information and people -- wherever it may reside.

3. Avoid Unnecessary Risk Taking

When there is no transparency within an enterprise, the work being done at different organizational units, teams or individuals is hidden from other organizational units, teams and individuals. So are ideas, knowledge, expertise, talent, and -- most importantly -- risk.

Dear Krishnan Umachandran, Thank you very much for asking this very important question.

Question:

Why should organizations be transparent ?

this is a very important issue that requires scientific research.

This issue is current and very important in the efficient functioning of each country.

I answer an interesting question:

Therefore, that by society they can be considered reliable, that citizens can trust institutions to preserve the prevailing social, economic system, etc.

I invite you to the discussion.

to ensure than organizational , social and employee goal is ethical and matching with social standard

I see a lot of people saying be transparent which I agree with in many cases.

However, I think there are cases for institutions to be secretive. For instance if a company is releasing a new product. The company doesn’t want to share the usp of the product and risk a competitor getting to market quicker.

Article Is Your Idea Safe?