Activist and NGO calls upon companies to act in a more transparent fashion are fine, but only up to a point.

Although I am a business advocate, I’m absolutely not in favor of companies adopting questionable processes, cheating consumers, or raping the land. I am a business advocate to the point of business being necessary and beneficial for the larger society.

So when I hear calls for “transparency,” such as is the mantra of many a social media guru, I think that transparency directed at the interested consumer is good, but we can’t take those calls too far. As the adage goes, “Too much of anything is not a good thing.” Why would I say this? Let’s use the following quote as a point of illustration.

In a June 2008 Fast Company article entitled “Buying Local - Isn’t it really about Social and Environmental Responsibility?“, we see the oft-repeated call-to-action under the topic: Questions Conscious Consumers should ask:

Transparency and Accountability: is it possible for me to learn where the materials to make the good came from and who made, transported, distributed, and retails the good? Can I contact anyone of these organizations if I want to learn more?

Before I moved into the area of macro-marketing consulting and analysis of anti-corporate activism, I was a competitive intelligence (CI) analyst. I made my living by examining the strengths and weaknesses of my clients’ competitors. One thing that would have simplified my job as a CI analyst would have been more “transparency.” When I was a CI analyst, had I known: where my clients’ competitors sourced their materials, who transported them, who distributed them, and exactly who retailed them, my analyses would have been absolutely devastating to the competitors my clients were paying me to examine.

With that intelligence, I would have been able to easily zero in on the competitor’s cost profile and from there I would have easily been able to back into the competitor’s profit margin. Easily. Devastatingly. My clients would have been ecstatic. Good for my clients. Not so good for the competitor. That transparent competitor would have “shot themselves in the foot.”

In capitalist markets, and in America we still are a capitalist society at least for the time being, too much transparent information floating around can be bad for the business that releases that info. Excessive transparency can cause reduced competitiveness and with that reduction in competitiveness can go the company itself. “Self-imposed” transparency can cause a company to leave the marketplace, i.e. go out of business, taking the jobs of hundreds or thousands of individuals with it.

And with that company goes competitiveness across the industry. The companies left to compete in that marketplace, companies that are perhaps not as transparent, read that as “stupid,” become fewer, consolidating market power. With consolidation of power comes higher prices and fewer jobs through which the work force can finance those higher prices.

In other words, based upon my experiences as a CI consultant, what I can see as a product of too much corporate

Continue reading Will Too Much Transparency Be Bad for All of Us?