We have grown accustomed to calls for transparency. Transparency, or accurate observability, of an organization's low-level activities, routines, behaviors, output, and performance provides the foundation for both organizational learning and operational control, and it has an untarnished reputation: rarely does one hear about any negative effects of transparency or problems stemming from too much transparency. Nonetheless, using data from embedded participant-observers and a field experiment at the second largest mobile phone factory in the world, located in China, 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.
We typically assume that the more we can see, the more we can understand about an organization. This research suggests a counteracting force: the more that can be seen, the more individuals may respond strategically with hiding behavior and encryption to nullify the understanding of that which is seen. When boundaries to visibility fall, invisible boundaries to accurate understanding may replace them at a significant cost. In my research, that cost was a 10–15 percent detriment to performance in a manufacturing context.
Hence the transparency paradox: broad visibility, intended to increase transparency, can breed hiding behavior and myths of learning and control, thereby reducing transparency. Conversely, this paper suggests that transparency can actually increase within the boundaries of organizational modules, or what the operators called zones of privacy, when the visible component of transparency is decreased or limited between them.
The careful design and implementation of zones of visual privacy within an organization is an important performance lever but remains generally unrecognized and underutilized. Paradoxically, an organization that fails to design effective zones of privacy may inadvertently undermine its capacity for transparency.
Innovation and Invention;
Organizational Change and Adaptation;
Groups and Teams;
Social and Collaborative Networks;
Financial Services Industry;
Consumer Products Industry;
Industrial Products Industry;