The Transparency Paradox

Abstract

Please do not quote or reference without citing the final publication (available at http://asq.sagepub.com):Bernstein, E. 2012 The Transparency Paradox: A Role for Privacy in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). Keywords 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...

Making Transparency Transparent: The Evolution of Observation in Management Theory

“…It might, therefore, be productive to revisit transparency and privacy at different levels of analysis within organizations-that is, in different zones of privacy (Bernstein, 2014).…”

“…The US Food and Drug Administration, suspicious of leaks, has tracked some scientists' emails "line-by-line as they were being written" (Johnston, 2016;Lichtblau & Shane, 2012). But even in ordinary workplaces, substantially increased use of observation-"the act of careful watching and listening, or paying close attention to someone or something, in order to get information" (Merriam-Webster Online Dictionary, 2016)-has become widespread over the last 3 15 years (Bernstein, 2014) through the use of "big data" digital tracking not only of our use of email, instant messaging, calendars, and social networks, but also of our location (through mobile phones, GPS, and RFID), our work (through real-time output monitors), our activity (through video), and even our moods (through facial recognition).These big-data developments, while viewed as cutting-edge, are in fact the latest phase of a long evolution of observation in management. Observation has always been a foundational element of management and, indeed, of daily life.…”

Big Data in Organizations and the Role of Human Resource Management

“…The HR department needs to implement the ability to have data transparency as a part of the HR daemon, allowing employees to use the data (and tinker with big data). The HR department also needs to evaluate the appropriateness of hiding certain data, avoiding a potential transparency trap (Bernstein 2014).…”

Producer Exploration can Generate Categories without Audiences

“…But in general, producers have only a very limited understanding of what their peers are doing or how their behavior translates into observed levels of success (White 1981;March, Sproull, and Tamuz 1991;Levinthal 1997). Producers may even have a poor understanding of how and why their own internal production processes work (Nelson and Winter 1982;Hannan, Pólos, and Carroll 2003;Bernstein 2012). Attempts to imitate dissimilar competitors may lead to crippling failures if producers fail to identify even a single key component of their competitor's strategy (Rivkin 2000).…”