Open-Book Management Principle

This is the unconventional idea carried in 'The Economist' that firms are most effective if their accounts are left open for all their employees to see as and when they wish, at the same time as the employees are taught to understand better the full financial picture. Traditionally, only a handful of senior executives are made to feel responsible for whether a business makes money or not. Open-book management attempts to extend this feeling of responsibility to everybody in the organisation.

It is described by John Case, the man who claims to have invented the expression, as the idea “that companies do better when employees care not just about quality, efficiency or any other single performance variable, but about the same thing that senior managers are supposed to care about: the success of the business”. It spread the burden of P&L responsibility—the responsibility for the profit and loss account of a business unit that is generally given as a reward to rising managers—to everyone in the organisation. With open-book management, the idea is that everyone has a certain amount of P&L responsibility.

What natural and economic disasters have in common?

The title seems to be very interesting....isn't it?

The parallels between financial crises and natural disasters—such as earthquakes or forest fires—suggest that the economy, just like complex natural systems, is inherently unstable and prone to occasional huge failures that are very hard or impossible to foresee. Scientists and other proponents of this school of thinking are bringing new ideas grounded in complexity theory to economic forecasting, strategic planning, and risk management. This trend may have profound implications for policy makers, economists, and corporate strategists alike. Please read this article published recently in Mckinsey quarterly.