Transparency and Reverse Transparency: Understanding Digital Leadership in Light of Agency Theory

We live in a digital world where most of our work and life experiences are based on information technologies and the internet. Developments in information technologies affect not only business life but also our social and community lives. Leading in the digital age is much more difficult and complex than leading in a world with no opportunities and no technology. Transparency is critical to digital leadership. The increase in the volume of data with developing technologies leads to increased transparency in organizations and has a significant impact on leadership. However, this also brings challenges. On the one hand, transparency facilitates employee empowerment, but on the other hand, it raises concerns about employee oversight and confidentiality. Moreover, transparency has traditionally been a one-sided construct where control is given to managers, leading to a panoptic scenario. To overcome these concerns and challenges, it is imperative to design new forms of control. In this regard, the contemporary workforce demands reverse transparency in the context of agency theory. Although the concepts of (reverse) transparency, leadership and digitalization are interrelated, there is a research gap on the relationship between the three. By analyzing the theoretical concept through the lens of control and outlining a conceptual implementation process, this study is of an explanatory theoretical nature. The study sheds light on the understanding of the problems related to transparency and reverse transparency in the contemporary workforce and contributes further to the theoretical discourse.