Wednesday, October 21, 2009

Transparency: Personal Vs. Public Companies

In my book review, I wrote about how the social networking technology helps facilitate a connector's ability to communicate with its large network. The technology also helps those who are not natural connectors learn to build that network. But the very benefits of a social site such as Facebook and LinkedIn are very similar to its downfalls. Being able to post our writing to a blog for the world to read allows us to be heard, to voice our opinions, and to develop our skills in front of the broadband. On the downside, everyone has the capability to read these blogs, to know our opinions, and to criticize our faults. I think these are all risks that make it difficult for me to be completely transparent in my writing.

In business, financial statements are said to be representative of how the company is doing. Transparency is "great". It helps investors learn which companies are doing well, which ones aren't, which ones to buy stock in. But is transparency good for the company? On one end, transparency allows companies to interact with consumers. If the consumers know what is actually going on, they can give feedback (one possible way of feedback being through the blogosphere). Consumers are more trusting of transparent companies, and that is a major benefit. However, companies are hesitant to be completely transparent in their disclosures because there is risk of others in the industry knowing too much, and this is similar to risk that we face.

Any kind of transparency or allowance of the public to see your work makes you liable. Having our blogs for the world to see makes us liable to criticism and labeling among other risks. First of all, as students, we need to consider who may be viewing our blogs and other public websites we may have, such as Facebook.

Employers may do a search on our name to see what comes up. I have my Facebook on extreme-privacy settings, and am even paranoid about anyone reading this blog and finding anything that could be misconstrued. It is risky to have your thoughts viewable to the public. When I was in high school, I kept a livejournal. I would vent, express concerns over classes, and discuss any challenges that I had day to day. One day, I wrote a long entry discussing my anger with my mom and how I thought she was being *completely unreasonable* with her punishment, etc. After having it up for 2 hours and having about 10 comments on it from my friends saying they agreed with me and my mom was being completely unreasonable, I realized that this was not the type of thing I should have on a public site. I think it reflected poorly on my temper and maturity. It also really displayed my mom in a negative manner that obviously was just due to the heat of the moment. It was not fair to her.

Another risk with blogs is that the repercussions do not only affect the writer, but can change other people's lives as well. One girl at my high school made a list of "people she hates" and listed about 30 people on her LiveJournal. This girl was suspended from school (for an amount of time that I can't remember right now), but even worse, one of the girls on her "hate list" developed an eating disorder. This was after being called overweight (among other less politically correct terms) on the hate list and who knows, the hate list could have contributed to her eating disorder. Having freedom of speech and the ability to easily spread our ideas to other people is a benefit of America and technology, but in this case, the consequence was a bigger cost.

President Obama took major advantage of the transparency of our current world. He used social media, blogs, networking sites--all which equate to free advertising. It worked for him, and it can work for us. On the other hand, being consistently in the lime light proves risks. For example, he is more vulnerable to people criticizing his policies. Putting your thoughts out for the world to see makes you accountable for them. If I put a subtle thought about how I don't like Kanye West, it could bring backlash and I would have to defend my opinion, even though I may not feel so strongly about it. This is a benefit because it promotes accountability, but at the same time, it is an automatic filter for the type of things that people may post. People know that others are reading their blog, so it is possible that some of the things they write could be catered to what they think the public wants to read. This parallels earnings management in companies ---when management manipulates financials to what the public (investors) wants to see.

Public companies get in trouble for earnings management because it gives off the wrong idea of how the company is doing. Public companies are regulated so that a certain level of transparency must be attained. Typically, the more transparent a company is, the more trust the investors have and the company earns a good reputation. What does our desire to be transparent or hesitations about our blog entries and say about our personalities?

1 comment:

  1. There may be a word choice issue here. The opposite of transparent is opaque. Are you deliberately trying to cloud issues in the way you write for the blog? I don't sense that at all. If you are avoiding topics altogether so those topics get no mention, that I could see. But I wouldn't describe that as a lack of transparency. I'd say, instead, that you aren't forthcoming with your ideas.

    There is a bigger picture question on the issue of what companies should disclose versus what they feel comfortable disclosing, in that they may not perceive all the risks. Clearly they guard against the risks they do perceive.

    When I worked in CITES there was a particular listserv, which still exists to this day, for IT professionals on campus to communicate among one another. There were a few IT pros on campus, now retired, who abused this privilege by voicing long rants on the listserv. Some staff in CITES opted to respond, really speaking for themselves rather than for the organization, but that wasn't obvious to those outside of CITES management. So an order was put in place to muzzle the internal response. It did solve that problem, but it also blocked potentially fruitful dialog between IT pros in and outside of CITES. That loss may have been greater than the gain that was achieved.

    Those who believe in open communication online typically make an argument of that sort when comparing it to the alternative.

    It might be useful to think of these issues in terms of the Argyris piece we read and whether the type of communication embraced helps influence whether Model 1 or Model 2 prevails. I do think there is a connection.

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