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Open Book Management: Should it be a Yes or No for the company?
Open book management, which was originated by Jack Stack and his team from Springfield Remanufacturing, was made popular in 1995 by John Case and has been defined in the past few years by small, entrepreneurial companies. Research conducted by The Non-Profit Quarterly states that OBM is a powerful way to run the organization and uses very little modification in conventional businesses. OBM means that a company will share financial and other information with all employees, educate them to become more knowledgeable in the business world, authorize them to use the information in the daily job and developing a trust with each one, as well as rewarding them when the company becomes successful (Barton 1999). This paper will discuss both sides of the still skeptical issue of open book management.
Many business owners have determined that the “management and labor” title for separation of employees limits productivity and that change is necessary (Case 2002). Companies who have opened their books will more likely be rewarded with greater productivity. A study conducted by the NCEO shows that highly participative companies achieved an 8-11 percent faster growth than expected. For each company in their study they used the average rates of sales compared to competitors and then subtracted the difference. They found that OBM really works and non-employee ownership companies saw a sales increase of 1.66 percent per year and employment rose 1.27 percent as well. Employee ownership companies got even better results with sales growth at 2.21 percent and employment increase of 1.14 percent (NCEO 2 ...