Bernstein, Ethan2017-08-182012Bernstein, Ethan S. 2012. “The Transparency Paradox.” Administrative Science Quarterly 57 (2) (June): 181–216. doi:10.1177/0001839212453028.0001-8392http://nrs.harvard.edu/urn-3:HUL.InstRepos:33780569Using data from embedded participant-observers and a field experiment at the second largest mobile phone factory in the world, located in China, I theorize and test the implications of transparent organizational design on workers' productivity and organizational performance. Drawing from theory and research on learning and control, I introduce the notion of a transparency paradox, whereby maintaining observability of workers may counterintuitively reduce their performance by inducing those being observed to conceal their activities through codes and other costly means; conversely, creating zones of privacy may, under certain conditions, increase performance. Empirical evidence from the field shows that even a modest increase in group-level privacy sustainably and significantly improves line performance, while qualitative evidence suggests that privacy is important in supporting productive deviance, localized experimentation, distraction avoidance, and continuous improvement. I discuss implications of these results for theory on learning and control and suggest directions for future research.en-USrightsinterpersonal communicationmanagement practices and processesethicscorporate disclosureperformance productivityboundariesorganizationssocial and collaborative networkslabor and management relationspower and influenceJournal Article2017-08-18