REFORMING FINANCIAL TRANSPARENCY IN ORGANIZATIONS THROUGH INCLUSIVE MANAGEMENT PRACTICES: THE MEDIATING ROLE OF PSYCHOLOGICAL OWNERSHIP

Abstract

This paper explores how inclusive management practices increase financial transparency in organizations with psychological ownership serving as an intermediating variable. Using Psychological Ownership Theory and Participative Management Theory, the research utilizes a quantitative, cross-sectional study design based on the data gathered on 300 employees who work in medium- and large-sized organizations. The hypothesized relationships are tested by Structural Equation Modeling (PLS-SEM). The results indicate that inclusive management practices have a positive effect on financial transparency either directly or indirectly in the form of psychological ownership. When employees feel the sense of involvement, acknowledgment, and equal decision-making, they feel a sense of ownership which enhances their loyalty towards open financial practices. The paper highlights the value of employee-based leadership towards the advancement of ethical governance and offers a reform-based model to improve transparency with the help of inclusive business practices. Various policy implications, theoretical and practical ones are also discussed with an emphasis on how accountability and sustainable organizational performance can be promoted.