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Why is it that organizations publish annual reports every year where important financial information is made public? In some cases, information about salaries above a certain threshold is openly available. Details about investments and the amount of funding are also widely publicized.
These are some common examples of transparency in business. It may seem like an intimidating area but business transparency is more important to understand than ever. In fact, individuals are more likely to trust organizations that are transparent about internal data. Wondering how to be transparent and win the confidence of others? Read on!
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What Is Transparency In Business?
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The Importance Of Transparency In Business
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How To Be Transparent
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Find Balance
What Is Transparency In Business?
When businesses are open, honest and straightforward about their operations and internal information, it’s all part of transparency in business. The open sharing of information with stakeholders fosters a culture of trust, communication and social responsibility. Transparent organizations may share information related to
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Pricing
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Hiring practices
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Revenue
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Performance
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Business values
The Importance Of Transparency In Business
With greater transparency in business, there are many risks that come with it as well. However, by opening up to competition and scrutiny, an organization makes way for sustainable and long-term business growth. Here are just a few of the advantages of transparency in business.
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Establishes Trust
Customer happiness and satisfaction with products or services are essential for any organization. Studies show that consumers prefer brands that practice transparency. When organizations are forthcoming, it’s highly unlikely that people will seek that information elsewhere. Customer loyalty increases when they can trust and rely on your brand.
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Improves Performance
When employees are privy to all the relevant information, it’s easier for them to communicate, collaborate and cooperate. The decision-making process gets decentralized as well and you have multiple perspectives to guide your decisions. Trusting employees with important information encourages them as well because it shows that they’re reliable and valuable to the organization.
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Increases Efficiency
When various levels of management are aware of the mission, vision, goals, progress and profitability of an organization, it increases commitment to their roles. Transparency increases productivity as well as efficiency. Communicating critical information builds trust and every member is then fully invested in fulfilling their responsibilities. The more you invest in your people, the more they’ll invest in the organization. They may even exceed expectations.
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Strengthens Accountability
Sometimes, to meet unrealistic expectations and gain a competitive edge, organizations resort to unethical measures. Transparency prevents businesses from cutting corners by making data publicly available. It holds businesses accountable and ensures every step taken is in the best interest of everyone concerned. In fact, research suggests that consumers are willing to purchase more from organizations that are transparent.
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Encourages Flexibility
Opening yourself to stakeholders, clients, customers and investors not only enhances your organization’s brand image but also helps you develop an open mind. You’re likely to get feedback and suggestions for improvement with transparency. Such insights are beneficial as you can tailor business solutions and meet internal and external requirements. For example, if someone faces workplace harassment, they’ll feel safer voicing their concerns when you prioritize transparency.
How To Be Transparent
Transparency in business goes beyond sharing an organization’s ethical, financial and operational data. It also refers to how employers engage and collaborate with each other. Here are several ways in which you and your organization can practice transparency and strengthen business ethics.
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Always admit your mistakes as it’s the trustworthy and responsible thing to do; make sure to use clear and empathetic language and try not to appear defensive when admitting mistakes
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Provide everyone with accurate and updated information; whether it’s business reports or a social media post, make sure you avoid inconsistencies and provide a list of FAQs or helpdesk contact information
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Feedback—whether positive or negative—fuels growth; accept feedback as it comes and actively work toward implementing it to improve your product and/or service
Find Balance
In your attempt to be transparent, you need to learn where to draw the line. It’s unhealthy to be too transparent as someone may take unfair advantage of it. Don’t jeopardize your business by giving away trade secrets. Disclose only that which is necessary for business growth and success.
In order to influence decisions related to business transparency in the organization, you need to first understand the different kinds of people you’re dealing with. Harappa’s Navigating Workplaces course will help you identify your cultural fit in an organization. The Stakeholder Map will help identify decision-makers at work while the Power Structures framework will guide you in understanding the various types of powers people hold. Assess your workplace culture before you take measures toward improving transparency.
Explore topics such as What is Organizational Structure, Types of Organizational Structure, Aspects of Organizational Culture, Matrix Organizational Structure & The Difference Between Functional and Divisional Structure from Harappa Diaries and understand organizational culture and needs.
