Question

What are the pros and cons of sharing information as a company?

1) Transparency is good, it creates a culture that is trusting
2) Investors will better understand the firm
3) Managers and employees will better understand the firm
4) Disclosure enhances the communication process both within the firm and with outsiders
5) As a company, you give away your competitive information
6) Performance failures can be hidden
7) Rivalry among segments can be reduced

Answer 1

Sharing information as a company has pros and cons. Pros include transparency, better understanding among investors, managers, and employees, enhanced communication, and reduced rivalry. Cons include giving away competitive information and the potential hiding of performance failures.

Step-by-step explanation:

Pros:

1. Transparency: Sharing information as a company promotes a culture of trust and openness.
2. Investor Understanding: When a company shares information, investors can better understand its operations and make informed decisions.
3. Manager and Employee Understanding: Sharing information helps managers and employees understand the company's goals and strategies, leading to improved alignment and productivity.
4. Enhanced Communication: Disclosure of information enhances communication within the firm and with external stakeholders, promoting collaboration and cooperation.
5. Rivalry Reduction: Sharing information among different segments of a company can reduce rivalry and promote collaboration between departments.

Cons:

1. Competitive Information: Sharing information may expose a company's competitive advantage to competitors.
2. Hidden Performance Failures: Companies may hide performance failures by selectively disclosing information, which can mislead investors and stakeholders.