Concept of Open Book Management

Subject: Management
Pages: 3
Words: 826
Reading time:
3 min

This paper primarily targets to analyze an article devoted to the concept of Open Book management. Since the beginning of the century, this idea has been implemented in the management of enterprises all over the world. Within the complexity of the modern market, it is necessary to recognize the competitive advantages of innovative management approaches. The article presents the historical experience and the theoretical basis of this concept. The author also emphasizes the connection between this particular concept and effective corporate responsibility and sustainability strategies of modern enterprises.

The idea of open management was first introduced by the company president and CEO of Springfield Remanufacturing Corporation, Jack Stack. At the begging of the century “SRC Holdings Inc.” became one of the most successful small businesses in the US and had an annual turnover of over $150 million (Greer & Schmelzle, 2020). As many enterprises are now on the edge of bankruptcy, Jack Stack’s experience acquires special relevance and can be used not only to preserve workplaces but also to ensure survival and prosperity in the future.

The key issue, according to Jack Stack, is the huge gap that separates workers and managers. The goal is to create a system that would allow everyone to unite and fight for a common goal. To achieve this, it is necessary to destroy the structural barriers that separate people from each other. He deems transparent communication as the most vital factor of success.

Thus, Open Book management is based upon the distribution of the information at all levels within the chain of command. According to Jack Stack, an understanding of the current financial situation can drastically improve the performance of all employees, regardless of their status or position. The task is to provide employees with all the relevant financial data about the company so that they can adjust their work accordingly.

In an Open Book company, all staff members are highly aware of how their work fits into the company’s financial plan. However, implementing the Open Book system cannot be achieved by merely sharing financial reports with employees. The main criteria in measuring the success of such compa any are the improvements that were achieved through direct assistance of the lower tier of employees. Namely, it targets to generate creative approaches and a certain level of flexibility that traditional management systems fail to provide. Open Book management seeks to encourage the participation of all employees that can communicate their forecasts to senior management freely and have an influence on important decisions.

Open Book companies believe that the relationship between managers and workers will improve if everyone can navigate and act on a common set of metrics. Provided that employees understand the meaning of the financial statements, they can understand the overall budget allocation. If the company’s profits have grown and income per employee increases, workers have a right to expect an increase in wages or other benefits. If profits have fallen and labor costs have risen, people will figure out why estimates have gotten tighter and wage increases had to be postponed.

At the same time, the concept of corporate responsibility lies in the very foundation of modern enterprise. It implies that all businesses must not only subdue to local and international laws but work collectively towards promoting social justice, protecting the environment, and building a sustainable future for their respective communities. The example of SRC has proven that the concept of Open book management allows to significantly increase the efficiency of recycling processes and find uncommon solutions to reduce costs without putting the environment at risk.

In my opinion, this connection is key to understand the competitive nature of the modern economy. In fact, I could not agree more with the author: it is only the innovation that provides a genuine competitive edge and ensures the sustainability of an enterprise. However, the system of open management is not the innovation itself – it is merely an instrument that unites separated parts of the mechanism into one cohesive unit.

In conclusion, the article provides guidelines for the establishment of an Open Book management system that comprise valuable information. Arguably, the most valuable lesson is that the managers of all levels must focus primarily on creating the right culture and setting up proper channels of communication. That can be achieved by organizing regular meetings where representatives from different departments can share important information and directly observe the growth of the company. It is necessary to understand that normal functioning of the Open Book management system requires maintaining the interest of all employees in achieving overall success. This can be done by developing a personal bonus plan that is tied to the overall performance metrics. Most importantly, such transparency within the organization guarantees accountability in terms of budgeting. Ultimately, that is why the concept of Open Book management presents itself as revolutionary and even visionary. Moreover, it has already proven its unique value, and, therefore, it is worth the time and effort.


Greer, O., & Schmelzle, G. (2020). Open-book management goes green. Strategic Finance. Web.