PRINCIPLES OF MANAGEMENT

CASE STUDY 2

Transparency Works

Successfully marketing something—an automobile, a dating service or a politician—requires skill, creativity and an understanding of the target market. For short-term products this usually is enough. In 1975 a California advertising executive came up with the idea of a “pet rock.” It was an ordinary rock, resting on fake grass in a small cardboard box, with instructions titled The Care and Training of your Pet Rock. The unit sold for about four dollars, and it was wildly popular—for less than one year.
But this product is an example of a “one hit wonder”—so its creators did not need to worry about whether they seemed to be reliable or trustworthy or explicit about their company’s practices. But very few companies have the luxury of casting aside concerns about image. For big, medium and small companies today, the emphasis usually is on long-term survival, and this requires a good public image.
So how can a company survive in today’s fast-changing world? Through transparency—in the presentation and defense of its products, and in its day-to-day behavior. This means sharing, to whatever extent possible, facts about the company—how it is set up, how it operates, what its salaries and bonuses are based on, and how its workers are expected to treat customers and each other. There are many examples of companies doing precisely this, and succeeding. One of the most recent examples is Chipotle, a large restaurant chain in North America and Europe. Since March the company has taken it upon itself—without pressure from interest groups or government—to clearly list all ingredients for its menu items. This includes, notably, genetically modified organisms (GMOs), which have stirred so such controversy in health and dietary circles. To date, do other American chain has done such a thing. Has it