Open-Book Management Goes Beyond The Bottom Line by Colleen K. Charles B.S., Management, Oakland University (1982) and Angela Negron S., Industrial Technology, Central Connecticut State University (1988) Submitted to the Alfred P. Sloan School of Management in partial fulfillment of the requirements for the Degree of Master of Business Administration (Charles) Master of S nce in Management (Negron) at the Massachusetts Institute of Technology June 1997 ©Colleen K. Charles & Angela Negron, 1997. All Rights Reserved. The authors hereby grant to MIT permission to reproduce and to distribute Publicly paper and electronic copies of this thesis document in whole or in part. Signature of Author: ‘Alfred P, Sloan School of Management May 2, 1997 Alfred P, Sloan School of Management May 2, 1997 Certified by: Janice A. Klein, Senior Lecturer Thesis Supervisor Accepted by: Susan C. Lowance Director, Sloan Fellows ProgramOpen-Book Management Goes Beyond The Bottom Line by Colleen K. Charles and Angela Negron Submitted on May 2, 1997 to the Alfred P. Sloan School of Management in partial fulfillment of the requirements for the Degree of Master of Business Administration (Charles) and Master of Science in Management (Negron) Abstract Sharing critical business information with employees is important to ensure that there is an alignment of thinking between the company and those who carry out the day-to-day tasks that effectively turn visions into reality. Much has been written about corporate strategies, visions, missions and transforming organizational cultural through providing clear messages and actions to the workforce. Critics of these modern management techniques say that the bottom line is what really matters and that stockholder returns are the proof of a well managed company. We cannot argue with this logic but feel that just looking at the bottom line is a too-simple measure of a complex system and we are not sure how sharing information translates to bottom line data. This thesis encompasses sharing business data and its power to affect behaviors in the organization's culture, employee decision-making, trust between employer and employee, and impact to the bottom line data. This thesis will attempt to answer questions such as: why implement Open-Book Management, how does sharing information impact an organization's culture, how do implementation processes occur within these varied businesses, how does a business determine what information should be shared, and is there an impact to the bottom line. Thesis Supervisor: Janice A. Klein Title: Senior LecturerAcknowledgments This thesis was made possible through the assistance and encouragement of a variety of sources that we would like to extend a sincere thanks to. We are grateful to General Motors Corporation and Pratt and Whitney for providing us the opportunity to further our education and we thank the many people at these two companies for their support throughout our careers. We are especially grateful to Jan Klein who agreed to supervise this thesis and to the many people who gave freely of their time to assist and embark on the learning journey with us. Last, but most important, our deepest appreciation goes to our families, friends, and pets who have supported us throughout the year. We are sure we would not be where we are today without their continual love, patience and understanding.