Skip to content Skip to navigation
University of Warwick
  • Study
  • |
  • Research
  • |
  • Business
  • |
  • Alumni
  • |
  • News
  • |
  • About

University of Warwick
Publications service & WRAP

Highlight your research

  • WRAP
    • Home
    • Search WRAP
    • Browse by Warwick Author
    • Browse WRAP by Year
    • Browse WRAP by Subject
    • Browse WRAP by Department
    • Browse WRAP by Funder
    • Browse Theses by Department
  • Publications Service
    • Home
    • Search Publications Service
    • Browse by Warwick Author
    • Browse Publications service by Year
    • Browse Publications service by Subject
    • Browse Publications service by Department
    • Browse Publications service by Funder
  • Help & Advice
University of Warwick

The Library

  • Login
  • Admin

The value and motivating mechanism of transparency in organizations

Tools
- Tools
+ Tools

Brandes, Leif and Darai, Donja (2017) The value and motivating mechanism of transparency in organizations. European Economic Review, 98 . pp. 189-198.

[img]
Preview
PDF
WRAP-value-motivating-mechanism-transparency-Brandes-2017.pdf - Accepted Version - Requires a PDF viewer.

Download (726Kb) | Preview
Official URL: https://doi.org/10.1016/j.euroecorev.2017.06.014

Request Changes to record.

Abstract

The question how transparency in organizations affects performance has received considerable interest from researchers in management, psychology, and organization science. The widely held view is that transparency benefits organizational performance, because it reduces employee uncertainty. However, causal empirical evidence on the value of transparency and its motivating mechanism is still scarce. In this paper, we report the findings from an experiment, in which an agent has only probabilistic beliefs about the true state of nature and needs to choose costly effort that benefits the principal. The true state relates to his fixed-wage, which can either be high or low. The principal needs to decide whether to create Informative Transparency by disclosing the true state to the agent via a costly, fixed-form message. Our results show a considerable value of transparency: even if transparency involves the disclosure of ‘bad news’ (the low state), effort almost doubles relative to non-disclosure. Looking at the motivating mechanism, we do not find that transparency motivates primarily because it reduces uncertainty for the agent. Instead, we find that Uninformative Transparency that merely involves communication of already known facts is equally effective. Many principals, however, misperceive the value of transparency and disclose information too restrictively.

Item Type: Journal Article
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HF Commerce
Divisions: Faculty of Social Sciences > Warwick Business School > Behavioural Science
Faculty of Social Sciences > Warwick Business School > Marketing Group
Faculty of Social Sciences > Warwick Business School
Library of Congress Subject Headings (LCSH): Organizational effectiveness, Incentives in industry , Management
Journal or Publication Title: European Economic Review
Publisher: Elsevier
ISSN: 0014-2921
Official Date: September 2017
Dates:
DateEvent
September 2017Published
3 July 2017Available
19 June 2017Accepted
Volume: 98
Page Range: pp. 189-198
Status: Peer Reviewed
Publication Status: Published
Access rights to Published version: Restricted or Subscription Access
Funder: Universität Zürich
Grant number: Grant 53220802

Request changes or add full text files to a record

Repository staff actions (login required)

View Item View Item

Downloads

Downloads per month over past year

View more statistics

twitter

Email us: wrap@warwick.ac.uk
Contact Details
About Us