Please do not quote or reference without citing the final publication (available at http://asq.sagepub.com):Bernstein, E. 2012 The Transparency Paradox: A Role for Privacy in Organizational Learning and Operational Control. Administrative Science Quarterly 57(2): 181-216.
AbstractUsing data from embedded participant-observers and a field experiment at the second largest mobile phone factory in the world, located in China, I theorize and test the implications of transparent organizational design on workers' productivity and organizational performance. Drawing from theory and research on learning and control, I introduce the notion of a transparency paradox, whereby maintaining observability of workers may counterintuitively reduce their performance by inducing those being observed to conceal their activities through codes and other costly means; conversely, creating zones of privacy may, under certain conditions, increase performance. Empirical evidence from the field shows that even a modest increase in group-level privacy sustainably and significantly improves line performance, while qualitative evidence suggests that privacy is important in supporting productive deviance, localized experimentation, distraction avoidance, and continuous improvement. I discuss implications of these results for theory on learning and control and suggest directions for future research. information flows up the organization, as well as reduce the risk that localized problem solving will fail to contribute to organization-wide learning (Tucker, Edmondson, and Spear, 2002). Transparency concurrently may enable operational control by ensuring access to richer, more extensive, more accurate, more disaggregated, and more real-time data by managers and employees, thus improving both hierarchical control (Taylor, 1911;Adler and Borys, 1996; Sewell, 1998) and peer control (Barker, 1993). Senior leaders are therefore redesigning their organizations to make more work more visible more of the time, embracing innovations such as advancements in surveillance and knowledge search technologies (Sewell, 1998;Levinson, 2009), open workspace design (Zalesny and Farace, 1987), and "naked" communication of real-time data via advanced information technology tools (Tapscott and Ticoll, 2003).
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2This trend toward transparency has been particularly evident in the design of the world's factories, where visual factory implementations have been "spreading . . . like a trail of gunpowder" (Greif, 1991: 1). Most modern-day facilities are designed to provide near-perfect observability of the actions and performance of every employee, line, and function. This observability serves as an important foundation for all aspects of the Toyota Production System DNA (Spear and Bowen, 1999) and is a necessary antecedent behind the seventh principle of the Toyota Way: "use visual control so no problems are hidden" (Liker, 2004: 149-158). Factory managers and employees need to see activity in order to improve it. Accurate observability also provides the basis for...