What are your thoughts concerning transparency when it comes to corporate ethics?  Can a company ever disclose too much?  To whom should companies provide a lot of detail?

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herappleness's profile pic

M.P. Ossa | College Teacher | (Level 1) Distinguished Educator

Posted on

Transparency is a hot-topic word, especially in today's fast-paced, high-tech society. Yet, when we move away from imagery and aesthetics, the heart and soul of the corporation remains untouched. This is where transparency plays a huge role: it is a combination of the TRUE and EXACT purpose and goal of the corporation, trying as possibly best to send an honest, clean message across the board in which they show what they are really about.

The idea behind corporate ethics is that any given organization has a set of standards by which they operate. These standards are often shown to the public in order to help them identify with the purpose and goal of the corporation. A GREAT example would be McDonald's. Take a look at their mission and values:

McDonald's brand mission is to be our customers' favorite place and way to eat and drink. Our worldwide operations are aligned around a global strategy called the Plan to Win, which center on an exceptional customer experience – People, Products, Place, Price and Promotion. We are committed to continuously improving our operations and enhancing our customers' experience.

In this case, McD is being honest about their lower-price initiative, combined with promotions. They are not lying to the public: they admit that they want to find the right people to whom they can sell their favorite products in a place where they can sit and eat the food that they love, at an affordable price, and with as many chances to repeat the experience. The promotion part comes in the commercials. Yet, notice how McDonald's corp does focus on the experience of sitting down to eat value priced meals with your family. All this being said, transparency is what keeps a business running, especially in a society where financial crises continue to occur. People no longer can "risk" their expenditures; they need to know what they get, at what price, how, and for what.

When it comes to corporate ethics, transparency is a must. All corporations should show what is going on within. American corporations are notorious for not telling the whole story about what they can do. Should they? Absolutely. Our country is way too needful in funds to feel as if people are wasting their money. Moreover, we need to understand what is at stake if we choose to invest in a corporation as far as stock in the market. Transparency also helps investors to clearly see what exactly they are getting into.

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pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted on

My main thought on this topic is that companies need to be able to strike a balance between excessive transparency and insufficient transparency.  Corporations that disclose too much can harm themselves in a variety of ways, but so can companies that do not disclose enough.

If a company does not disclose enough, it runs at least two important risks.  First, the firm might run afoul of laws concerning disclosure.  This would, of course, get the firm into trouble with the government.  Second, a lack of transparency might lead consumers to lose faith in a company.  If people think that a company is withholding information from them, they are likely to stop trusting it and, therefore, to shy away from patronizing it.  This will cause the firm to lose market share and profit.

However, if a company discloses too much, it can also hurt itself.  First, the firm might open itself to being spied upon by its competitors.  There is information in any firm that needs to be kept secret in order to prevent competitors from doing things like stealing trade secrets or knowing too much about a firm’s strategies.  Second, excessive disclosure can actually prevent customers from knowing the things they need to know about your firm.  If you disclose huge amounts of information, customers might simply ignore it all because they cannot possibly process the entire amount.  If they do this, they will miss out on important information and may lose trust in your firm just as they would if you did not disclose enough.

Thus, there clearly needs to be a balance between excessive and inadequate disclosure.

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