Lack of transparency

From CEOpedia | Management online
Lack of transparency
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Transparency is understood as open communication and explicit decision-making processes in the organization. Transparency is very important aspect in management. It brings many benefits for the employee, for the management and for the whole organization. Furthermore, it is one of the most important things in organizing teamwork. It has an influence on cooperation, efficiency and results of the company (Schwarcz D., 2013).

Lack of transparency is major ethical problem in management and leadership in complex organizations. It often leads to large consequences- not only for the employee but also for the management. Negative effects of lack of transparency include:

  • communication barriers, miscommunication, false information - for example: employees don't know how to perform the task / staff doesn't provide precise and clear information. Poor communication leads to gossip, quarrels, blaming others and, at worst, to long delays,
  • lack of trust between parties involved in negotiations or cooperation,
  • lack of loyalty between team members,
  • permanent damage to company brand and perceived value of product or services,
  • financial or production scandals (i.e. Volksvagen's dieselgate),
  • stricter government regulation and controls over untrusted industry,
  • decreased level of motivation, productivity and effectiveness,
  • alienation, lack of identification with the company,
  • etc.

Advantages of transparency

Each company and organization should be transparent. There are many economic and moral arguments why transparency is important in business, for example:

  • Clear atmosphere - at work, we spend an average of 8 hours per day. It's important to feel comfortable and have good communication with colleagues and management. Encountered difficulties and stress are better tolerated.
  • Higher quality - employee who knows exactly how to do his job has a chance to do it as well as possible. If the employee knows the scope of the work and the final goal, he can affect not only the performance of the current task, but also the work of colleagues or the action plan. With each subsequent task, he can do the work faster and better.
  • Motivation - transparency in company can increase integration. Employees are more willing to take part in projects. They try to do them the most accurately to achieve the set goals. They want to improve their results.
  • Involvement - organizations more often informing their employees about the basics and stages of project creation. They try to involve people as much as possible in all aspects of planning and decisions. Thanks to this increases responsibility and commitment, retains your best employees.
  • More loyalty - effective communication build a sense of identification between employee and leadership. Team who identifies with the company's values is hard-working and loyal (Dubbink W.,Graafland J.,van Liedekerke L., 2008).
  • Greater profitability - a lot of polls indicate at least two-thirds of consumers would spend more if it meant buying from a transparent company. Transparency means that the company is better perceived and attracts to contractors.
  • Control - when you encourage to be honest and the sharing of information on every level of your company, you build the way for understanding of company goals.
  • Enjoying the results - awareness of the work progress allows you to enjoy the achieved goals. One success is the desire to implement the next major projects.
  • Company image - employee who does his job well and respects the prevailing rules in the company is her best representative. Additionally, the company is better perceived by the environment. Thereupon it raises credibility and willingness to cooperate. Satisfied team = satisfied customer.
  • etc.


Author: Ewa Wójcik