What might happen to your wage negotiation power if you are more profitable for your company & board of directors?
Fully transparent honesty will earn you and your company more sales. This is not just a nice idea, Mark Pigors & Bettina Rockenbach have tested and shown that it actually works, while not doing so could be harmful.
“We find that when producers’ honesty is fully transparent to consumers, being honest provides a competitive advantage. Honest firms make higher profits by selling more units, albeit not at higher prices. The synopsis of the treatments shows that this result only holds when producers’ honesty is fully transparent . . . When information on honesty is completely absent, honesty is detrimental for the firm’s profit.”
The paper goes on to highlight, “[Our findings] show that in order to exploit the competitive advantage of honesty, the firm (or any party interested in promoting honesty) has to strive for full transparency on the honesty of the market participants.”
[The paper entitled, “The competitive advantage of honesty” can be found at https://www.sciencedirect.com/science/article/pii/S0014292116301404]
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