Open Book Management (OBM)

Posted in Human Resources Terms, Total Reads: 2544

Definition: Open Book Management (OBM)

Open Book Management (OBM) is a philosophy wherein a company shares all its financial and operational information (critical data) with all the employees and expects them to align themselves with company’s goals such that the overall performance of the organization is enhanced. This way, the employee considers himself as a company’s stakeholder rather than just a ‘hired worker’, and hence takes the responsibility to drive the company towards its goals.

It involves following steps:

-          Training the employees to understand company’s financial and operational data

-          Sharing all the information with the employees to maintain transparency

-          Empowering them to use the information to build company’s growth prospects

-          Treating them as business partners and sharing profits as well as the risk for losses


Springfield Remanufacturing Corp (SRC), a US based company initially incurred losses of $61000 on revenue of $16 million. The management then decided to share all the company’s information with all the employees, which in turn, made the employees realize what needs to be done in such a crisis. With the implementation of OBM, the company went on to make profits of $12 million a year on the revenue of $160 million.

Allstate’s Business Group saw its return-on-equity rise from 2.9% to 16.5% in three years after the implementation of OBM


Hence, this concludes the definition of Open Book Management (OBM) along with its overview.

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