In theory ...Open-book management

Emma De Vita's weekly look at management-speak

There's a lot of talk at the moment in management circles about a controversial idea called 'transparency', a concept that was very fashionable a decade ago but is now falling out of favour. 'Open-book management' is a synonym for it. But what does it mean for a manager working in the third sector?

Open-book management is the idea that an organisation performs best if its accounts are made available to all its employees. The theory is that, by sharing the kind of financial information that is usually the preserve of only the most senior managers, all employees will assume a feeling of responsibility for the overall success of the organisation and understand their own small contribution to the cause.

John Case's Open-book Management, published in 1995, describes it as the idea that "companies do better when employees care not just about quality, efficiency or any single performance variable, but about the same thing senior managers are supposed to care about: the success of the business".

Once everyone - from the temp on reception to the chief executive - is in the know, a feeling of deep trust and togetherness supposedly comes into existence. This in turn creates a shared sense of purpose and determination to do your collective best.

This idealism is all well and good, but there's a big spanner that quickly gets thrown into the works of open-book management: salaries. If you're going to be totally transparent about your charity's finances, then everyone will know exactly what everyone else earns. Your charity may be graded along civil-service lines but, when it comes to money, every last pound counts, and if you find out that the lazybones next door is earning a couple of hundred quid more than you, the bitterness sets in.

This is a nightmare for the manager, who has enough on his or her plate. Far better to keep the account books under lock and key. Ignorance, as they say, is bliss.

 - Emma De Vita is editor of the books pages on Management Today

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