Making Transparency Transparent: The Evolution of Observation in Management Theory

Abstract

Observation is key to management scholarship and practice. Yet a holistic view of its role in management has been elusive, in part due to shifting terminology. The current popularity of the term "transparency" provides the occasion for a thorough review, which finds (a) a shift in the object of observation from organizational outcomes to the detailed individual activities within them; (b) a shift from people observing the technology to technology observing people; and (c) a split in the field, with managers viewing observation almost entirely from the observer's perspective, leaving the perspective of the observed to the realm of scholarly methodology courses and philosophical debates on privacy. I suggest how the literature on transparency and related literatures might be improved with research designed in light of these trends.KEYWORDS: transparency, privacy, performance, organizations, management theory ACKNOWLEDGEMENTS: I thank Julie Battilana, Ethan Burris, Tim Earle, Amy Edmondson, John Elder, Elizabeth Hansen, Rosabeth Moss Kanter, Joshua Margolis, Tsedal Neeley, Nitin Nohria, Shefali Patil, Kathy Qu, Ryan Raffaelli, Lakshmi Ramarajan, and Bradley Staats for feedback on prior versions of this work; Jim Detert, Sim Sitkin, and two anonymous reviewers for insightful and developmental feedback; and the Harvard Business School for financial support.Please cite as: Bernstein, E. S. Making transparency transparent: The evolution of observation in management theory. Academy of Management Annals, 11(1): 217-266. 2We are increasingly observed and observing at work. Fifty years ago, a typical manager might have tracked production, revenue, and expenses against budget and periodically observed workers during in-person audits (e.g., Dalton, 1959). Today, advances in technology, from smart cameras to wearable tracking devices, make possible a kind of real-time "SuperVision" (Gilliom & Monahan, 2012) far beyond any level of observability envisioned 50 years ago or when Frederick Taylor (1911) originally promoted managerial oversight through scientific management.Public attention is captured by extreme examples of observation at work, like handheld computers (Amazon) or wearable bands (Tesco) tracking and optimizing employees' every move (Head, 2014;Kantor & Streitfeld, 2015;Rawlinson, 2013), embedded sensors in large fleets of company-owned trucks (e.g., UPS) recording hundreds of measurements to capture every action of the truck and its driver to unearth and enforce time-saving tactics (Goldstein, 2014;Levy, 2015), cameras at Las Vegas casino Harrah's tracking the smiles of card dealers and wait staff as a proxy for customer service quality (Peck, 2013), point-of-sale systems scraping every transaction for signs of employee fraud (Pierce, Snow, & McAfee, 2015), and RFID (radiofrequency identification)-enabled workspaces automatically capturing factory worker progress (Ranganathan, 2015), how long employees spend at their desks (Zillman, 2016), and even who does and does not use hand-soap and hand-sanitizer dispensers ...

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“…Transparency and privacy stand in critical coexistence, which is particularly relevant for organizational design and the levels of transparency and privacy that define an organization concerning its internal operations and the external disclosure thereof (Bernstein, ). As transparency leads to an increased awareness of the observed, the observed is also aware of the observer, which can trigger hiding behavior, discouraging learning, control, and overall performance (Bernstein, ). Corporations face the risk of being observed and that the observers can abuse the gained knowledge, for instance in the case of false greenwashing accusations (Bernstein, ; Parris et al, ; Seele & Gatti, ).…”

“…As transparency leads to an increased awareness of the observed, the observed is also aware of the observer, which can trigger hiding behavior, discouraging learning, control, and overall performance (Bernstein, ). Corporations face the risk of being observed and that the observers can abuse the gained knowledge, for instance in the case of false greenwashing accusations (Bernstein, ; Parris et al, ; Seele & Gatti, ).…”

“…Trade data that includes information about a shipment’s origin, transport route, and the type of packaging material used, would allow for targeted surveillance, enabling authorities to intercept IAS more efficiently and to track down the source of an outbreak timelier. From a PCSR perspective, the voluntary provision of such data stands in line with PCSR’s normative demands of transparency and accountability going beyond “government firm surveillance” as a form of coercive or normative pressure (Bernstein, ; Scherer & Palazzo, ). In fact, the examples from Switzerland and Bavaria show that corporations are willing to give transparent insights into trade data and would support the forms of governmental or networked surveillance that contribute to addressing the ALB.…”

“…Transparency is often praised as a solution for corporations to reduce corruption and stakeholder distrust, illuminating "what is left in the dark" (Albu & Flyverbom, 2019;Bernstein, 2017;Parris et al, 2016).…”

“…As Bernstein (2017) highlights, transparency builds on the logic "that more-and more accurate-awareness of others improves learning and control and therefore improves performance." From a governmental perspective, corporate transparency-in other words the public disclosure of performance indicators-serves as a regulatory (self-disciplinary) tool, to control for sound financial and ethical business conduct, given that learning and positive institutional development are induced by the watchful eye of the public (Doorey, 2011;Flyverbom, Christensen, & Hansen, 2015).…”