Does Privacy Make Groups Productive?

Abstract

Transparency is one of the great cross-disciplinary themes of management and organizations today. Increases in transparency, or accurate observability, of activities, routines, behaviors, strategies, output, and performance promises higher performance through improved learning and control, and thus collaboration and decisioning, inside and outside of the organization. Advancements in sensing, surveillance, search, and related `big data' technology have produced a renaissance in the meaning of the word "transparent," enabling a new generation of organizations in which broad access to real-time observation is the norm. Yet a foundational question about transparency remains unanswered: are there circumstances under which too much transparency might be detrimental to group performance? Put differently, are there circumstances under which privacy makes us productive?

I have three primary conclusions. The first is that transparency holds great promise for organizations, but to be effective, approaches for achieving transparency must extend beyond making environments more observable. Accurate observability is far more difficult to achieve than mere observability. For human beings, who are prone to changing behavior to regulate attention when either observed by others or observing others, increasing observability can have the result of reducing authenticity and thereby transparency, a result I call the Transparency Paradox. An organization that fails to design effective zones of privacy may therefore inadvertently undermine its capacity for transparency.

Second, the Transparency Paradox has been elusive not only because relatively few researchers have sought to rigorously study the performance implications of transparency, but also because those who have done so have used different methods, literatures, and even vocabularies. Transparency and privacy are interdependent opposites yet are studied separately. This dissertation is at least as integrative of existing, diffused literatures as it is built upon new empirical participant-observation, field experiment, and longitudinal survey findings.

My third finding follows from those two: a nuanced theory on transparency requires an appreciation for both the observation of activity and boundaries across which observation is limited. How such privacy boundaries are constructed, legitimized, and timed partially defines the level of transparency, and performance, an organization can achieve and are thus important, yet underutilized, managerial levers. Privacy can make groups productive.