Transparency in business life requires entrepreneurs to be honest and open on various issues. The leader of a company should be honest and transparent with its employees, customers and investors about the company's goals, history, performance, operation.
According to research firm Label Insight, 94% of consumers are more loyal to companies that operate transparently. 74% of the same people are willing to pay more for the products that are clearly stated how they are produced.
Internal transparency is also a very important issue. Being honest in the internal communication of the company and knowing the employees about the operations of the company increases the morale and motivation of these people and thus their productivity. This increases the sense of trust within the company, as employees feel that they are working for a company with high ethical values.
For these reasons, companies are now shifting towards a more transparent, more accountable management approach. For example, some markets clearly indicate where they get their products. Or large clothing companies transparently share with their customers how their clothes are produced.
Why is Transparency Important in Business Life?
Transparency is very important for both employees and customers. Transparency shows that the company has nothing to hide, which allows customers to make better decisions. In other words, when we compare a company that hides the production process and a company that shares the production process with the public, people prefer a transparent company.
So where did the transparency trend come from?
Distrust in Corporate Firms
According to corporate perception surveys, 36% of consumers think that corporate companies "sell dreams". In other words, there is a perception that something is spinning in secret. This rate is 84% in China. That's why companies are in a race to show that they have nothing to hide.
Why are people insecure? Much of the problem stems from the greed of CEOs and big corporations.
We've all witnessed the 2008 economic crisis triggered by greedy, fraudulent financial institutions. Then we experienced actions that highlighted the income injustice caused by capitalism. These events took place in many parts of the world because people understood that companies were focusing only on their own interests in unethical ways, while also stepping on society. This has made it mandatory for companies to operate more transparently and openly.
Voting and Review Sites
Online review sites were also effective in gaining transparency in importance. For example, the Şikayetvar from Turkey, the Sour Dictionary views and reviews about a product in such sites have become shows of the inner face of the company.
With the widespread use of the internet in the last 10 years, people have definitely taken a look at the comments on the internet before shopping. That's why companies chose a more transparent way of communication to avoid negative comments and opinions about them on the internet.
Social Media and Information Age
Most businesses today have at least one social media account. Twitter, Facebook, Instagram, Youtube… This situation enables customers to interact with companies 24/7.
Considering that information can spread like an avalanche in a short time, companies pay great attention to their online images. They find the news about them before anyone else and try to take precautions against an adverse situation; they announce their social benefit activities on the internet. In other words, in the context of PR, we can say that social media requires companies to be more transparent and informative.
It is also a fact that we live in the information age. We can learn the recipe of the food we eat in a few seconds, even the maiden name of the actress in the movie we watched in a few seconds. So we are under an incredible information bombardment. As such, companies prefer to share the raw materials and production methods of the products they produce in a transparent way in order to immediately satisfy the information hunger of consumers and to eliminate possible doubts.
All companies carry out various activities in order to gain the trust of consumers and eliminate their doubts.
But what future does transparency have?
What can happen if companies adopt a confidential and secretive approach?
Or are we moving towards a future where everything from A to Z is known and transparent?
Customer demand is increasing over time, and it seems unlikely that the demand for transparency will fall from the top of the priority list in the near future. We can say in advance that transparency will gain more importance if the Internet age will make communication more open and available to everyone. For this reason, it will be more beneficial for all businesses, whether small or large, to adopt a more transparent management and production approach.