Open-Book Management

Question

What will be an ideal response?

Answer 1

Executives often are proud of their newsletters, staff meetings, videos, and other vehicles of downward communication. More often than not, the information provided concerns company sports teams, birthdays, and new copy machines. Page 447 But here is a more unconventional philosophy: Open-book management is the practice of sharing with employees at all levels of the organization vital information traditionally meant for management's eyes only. This information includes financial goals, income statements, budgets, sales, forecasts, and other relevant data about company performance and prospects. This practice is dramatically different from the usual closed-book approach in which people may or may not have a clue about how the company is doing, may or may not believe the things that management tells them, and may or may not believe that their personal performance makes a difference.

Open-book management is controversial because many managers prefer to keep such information to themselves. Sharing strategic plans and financial information with employees could lead to leaks to competitors or to employee dissatisfaction with compensation. Father of scientific management Frederick Taylor, early in the 20th century, would have considered opening the books to all employees idiotic.