On the Virtues of Secrecy in Organizations

Abstract

Many authors have highlighted the detrimental aspects of secrecy, particularly as keeping secrets runs contrary to the values of open, democratic societies and institutions. In this view, secrets help the powerful maintain control over the valuable resource of information. In this essay, the authors explore the more positive view, asking what may be virtuous in keeping secrets in organizations. From the perspective of strategy development and implementation, human resource management, and trust development, there are several virtues of secrecy that emerge. Although there are very real costs to keeping secrets, there are also benefits at the organizational and the interpersonal levels.

Why and How Do Employees Break and Bend Confidential Information Protection Rules?

“…Finally, our findings have implications for the growing number of scholars who are interested in how organizations can protect their knowledge and CI (Dufresne and Hoffstein, ; Hannah, ; Hurmelinna‐Laukkanen and Puumalainen, ; Kim et al, ; Liebeskind, ). Our findings suggest that employees bend or break rules that are designed to protect CI because they experience tension between those rules and other expectations they face.…”

A dynamic view on secrecy management

“…Formal measures to control knowledge flows between workers and the external environment are generally less effective though (Gallié & Legros, 2012), so many firms turn to informal measures, such as fair compensation to restrict employee mobility (Delerue & Lejeune, 2010), administrative or operational protection procedures that reduce chances of leakage (Hannah, 2005), and compartmentalization, which allows slicing secrets into parts so no employee can put the secrets together to understand the bigger picture (Dufresne & Offstein, 2008). Research also suggests that in collaborative projects, it pays off to provide trainings focused on the protection of sensitive information during the course of collaboration to the employees of the constituent firms (Slowinski et al, 2006).…”

“…Employees feel important when given secret information but can hold that information against the firm (Dufresne & Offstein, 2008;Haas & Park, 2010). Employees may become dissatisfied if secrets are withheld from them (James et al, 2013) The number of patents, as an internal performance indicator, may motivate staff and provide a performance evaluation tool (Blind et al, 2006).…”

“…Finally, patents motivate staff as internal indicators of performance. Although the disclosure of secrets to certain employees might motivate them or increase their sense of importance, employees also can use this knowledge to hold the organization hostage (Dufresne & Offstein, 2008;Haas & Park, 2010).…”

“…Secrecy is the intentional withholding of a piece of knowledge, information, or behavior by one or more persons from the view of others (Bok, 1984) and an important mechanism to protect valuable information (Dufresne & Offstein, 2008). The main aim of secrecy is to make imitation as costly and unpredictable as possible (Arundel & Kabla, 1998), by concealing chemical formulae, recipes, customer files, machinery designs, or other types of information that are important to a firm and that may be valuable to third parties (Hannah, 2005).…”