Managerial Economics & Organizational Architecture 6th Edition by James Brickley , Clifford Smith ,Jerold Zimmerman

Exercise 11

Recently a number of companies have adopted what is known as open-book management. Under this concept lower-level employees are given training to help them understand the company's financial statements and how their individual actions affect financial performance. They are given access to information previously known only to more senior management. They are also given detailed revenue and cost data as it relates to their jobs. For instance, one company gave delivery drivers information about the maintenance costs of the company's vans, whereas a building company gave employees detailed cost information on such items as a spoiled batch of glue. Why do you think this management trend is occurring now, rather than say 20 years ago Does this policy fit with other changes that are occurring in organizations Explain. Do you think all companies should "open their books" to lower-level employees Explain.