Is It Good to Talk? Information Disclosure and Organizational Performance in the UK
| Author | Helen Bewley,Howard Gospel,Riccardo Peccei,Paul Willman |
| Published date | 01 March 2005 |
| Date | 01 March 2005 |
| DOI | http://doi.org/10.1111/j.1467-8543.2005.00343.x |
British Journal of Industrial Relations
43:1 March 2005 0007– 1080 pp. 11–39
© Blackwell Publishing Ltd/London School of Economics 2005. Published by Blackwell Publishing Ltd,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
Blackwell Publishing Ltd.Oxford, UKBJIRBritish Journal of Industrial Relations0007-1080Blackwell Publishing Ltd/London School of Economics 2005March 20054311139Articles
Is It Good
to Talk?British Journal of Industrial Relations
Riccardo Peccei and Howard Gospel are at King’s College London. Helen Bewley is at the Policy
Studies Institute. Paul Willman is at the Said Business School, University of Oxford.
Is It Good to Talk? Information Disclosure
and Organizational Performance in the UK
Riccardo Peccei, Helen Bewley, Howard Gospel and
Paul Willman
Abstract
The disclosure of information by management to employees varies significantly
between workplaces. The effects of this variance on organizational performance
are analysed using WERS98 data. The results show that the impact of infor-
mation disclosure on organizational performance is more complex than is often
assumed in the literature. Overall, there is a significant impact, both direct and
indirect, and this varies depending on the level of employee organizational
commitment, the type of information disclosed and the performance outcome
involved. On the whole, the positive effects are less in union settings and in
situations where unions are strong.
1. Introduction
Disclosure of information by firms to their employees and representatives is
encouraged as good practice by academics focusing on voluntary behaviour,
and increasingly by policy-makers focusing on legal requirements. For many
of the former, information-sharing or disclosure is seen as an element in
management transparency, yielding benefits in employee satisfaction, com-
mitment and motivation, and thereby in organizational performance (Lawler
1995; Lawler
et al
. 2001; Pfeffer 1998). For policy-makers, particularly in the
European Union (EU), disclosure of information, mandated through consul-
tation or negotiation institutions, is part of the fabric of legislation underpin-
ning human resource and industrial relations practice (DTI 2002; EU 2002).
Despite the growing interest on the part of both academics and policy-
makers in information-sharing/disclosure, we still know relatively little about
the effects of disclosure on organizational level outcomes. Empirical work
focusing specifically on organizational, as opposed to individual, level out-
comes is limited, and existing findings in the area are variable. For example,
12
British Journal of Industrial Relations
© Blackwell Publishing Ltd/London School of Economics 2005.
research by Lawler
et al
. (1998, 2001) on a sample of Fortune 1000 companies
in the USA suggests that information-sharing is positively related to various
overall measures of firm quality and financial performance (see also Benson
and Lawler 2003). Other US research, however, shows disclosure benefits
primarily for employees, in the form of wage gains (Kleiner and Bouillon
1988). Japanese research, on the other hand, shows benefits accruing to the
firm in terms of process advantages in negotiation duration, as well as out-
come benefits in productivity and profitability (Morishima 1989; 1991). Some
of these differences might easily be assigned to national cultural differences
working through institutions and the embeddedness of firms in national
institutional contexts. Equally, as suggested by Morishima (1991), it may be
that different consequences reflect different forms of underlying ‘game’ —
broadly either co-operative or conflictual — between employers and employ-
ees and the effect that such games have on the propensity to disclose, although
we would concede that national institutions may generate different games.
More generally, the arguments of Kleiner and Bouillon (1988) and
Morishima (1991) direct attention to the possibility that the impact of
information-sharing on key organizational outcomes may vary depending
on the specific context involved, so that even within the same country similar
disclosure practices may generate different outcomes in different firms or
workplaces. This contingency type argument in the labour economics litera-
ture provides a rather institutionally embedded perspective, more akin to an
industrial relations (IR) type approach. Such an approach is in contrast to
the generic universalistic argument advanced in some of the human resource
management (HRM) literature, which suggests that voluntary provision of
information by management to employees can be expected to have a consis-
tently positive impact on organizational performance (Pfeffer 1994, 1998).
In this article we use a large UK data set, i.e. the 1998 Workplace Employee
Relations Survey (WERS98), to explore competing universalistic and contin-
gency explanations of the impact of information disclosure on organizational
performance, which we operationalize in terms of labour productivity and
product/service quality. Specifically, we develop alternative universalistic and
contingency hypotheses and then test them on the WERS98 data.
The structure of the paper is as follows. Section 2 summarizes the key
arguments of universalistic and contingency perspectives on information
disclosure and presents the main hypotheses to be tested. Section 3 outlines
the data set and the methods used in the analysis. Section 4 presents the
key findings, and Section 5 concludes by discussing theoretical and policy
implications.
2. Theoretical perspectives and research hypotheses
2.1 Universalistic Approach
Central to the universalistic approach is the idea that it is good management
practice — associated with benefits accruing to the firm — to keep employees
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