The Rise of Data-Driven Decision Making Is Real but Uneven

Kristina McElheran and Erik Brynjolfsson
Harvard Business Review
February 3, 2016

Growing opportunities to collect and leverage digital information have led many managers to change how they make decisions – relying less on intuition and more on data. As Jim Barksdale, the former CEO of Netscape quipped, “If we have data, let’s look at data. If all we have are opinions, let’s go with mine.” Following pathbreakers such as Caesar’s CEO Gary Loveman – who attributes his firm’s success to the use of databases and cutting-edge analytical tools – managers at many levels are now consuming data and analytical output in unprecedented ways.

This should come as no surprise. At their most fundamental level, all organizations can be thought of as “information processors” that rely on the technologies of hierarchy, specialization, and human perception to collect, disseminate, and act on insights. Therefore, it’s only natural that technologies delivering faster, cheaper, more accurate information create opportunities to re-invent the managerial machinery.

The article is here.

Corporates Manipulate and Succeed: Is this the way forward for start-ups?

By Robert Parmer
The Startup Magazine
Originally posted August 3, 2015

Here is an except:

Companies aren't always as independent, benevolent, or community-oriented as they seem. In fact, many popular companies are actually owned and operated by much larger (and often less popular) corporations.

I was once in the body care store “The Body Shop” and overheard a conversation between a customer and employee. They were talking about how they only use cruelty free products and only support companies that have that overall mindset, no excuses! I quickly picked up on a flaw in their logic.

While the Body Shop itself may represent a brand that is cruelty free, as a whole the company that backs them does not. That company is oddly enough Nestle which also owns the controversial brand L’oreal.

The article is here.

Automated empathy allows doctors to check on patients daily

By Barbara Feder Ostrov
Kaiser Health News
Originally posted February 10, 2016

Here is an excerpt:

"Automating empathy" is a new healthcare buzzword for helping doctors stay in touch with patients before and after medical procedures — cheaply and with minimal effort from already overextended physicians.

It may sound like an oxymoron, but it's a powerful draw for hospitals and other health care providers scrambling to adjust to sweeping changes in how they're paid for the care they provide. Whether the emails actually trigger an empathetic connection or not, the idea of tailoring regular electronic communications to patients counts as an innovation in health care with potential to save money and improve quality.

Startups like HealthLoop are promising that their technologies will help patients stick to their treatment and recovery regimens, avoid a repeat hospital stay, and be more satisfied with their care. Similar companies in the "patient engagement" industry include Wellframe, Curaspan, and Infield Health.

The article is here.

'We Didn't Lie,' Volkswagen CEO Says Of Emissions Scandal

Sonari Glinton
NPR.org
Published January 11, 2016

Here is an excerpt:

NPR: You said this was a technical problem, but the American people feel this is not a technical problem, this is an ethical problem that's deep inside the company. How do you change that perception in the U.S.?

Matthias Mueller: Frankly spoken, it was a technical problem. We made a default, we had a ... not the right interpretation of the American law. And we had some targets for our technical engineers, and they solved this problem and reached targets with some software solutions which haven't been compatible to the American law. That is the thing. And the other question you mentioned — it was an ethical problem? I cannot understand why you say that.

NPR: Because Volkswagen, in the U.S., intentionally lied to EPA regulators when they asked them about the problem before it came to light.

Mueller: We didn't lie. We didn't understand the question first. And then we worked since 2014 to solve the problem. And we did it together and it was a default of VW that it needed such a long time.

The entire interview is here.

The Most (and Least) Empathetic Companies

By Belinda Parmar
Harvard Business Review
November 27, 2015

There is a direct link between empathy and commercial success. Businesses are more profitable and productive when they act ethically, treat their staff well, and communicate better with their customers, according to the latest Lady Geek Global Empathy Index. The top 10 companies in the Global Empathy Index 2015 increased in value more than twice as much as the bottom 10 and generated 50% more earnings. Average earnings among the top 10 were up 6% this year, while the average earnings of the bottom 10 dropped 9%. (Last year’s empathy index can be found here.)

At Lady Geek, a consultancy based in London, we define empathy as a cognitive and emotional understanding of others’ experiences. These qualities are increasingly important as social media feeds popular demand for transparency and authentic interaction.

The entire article is here.

Would you have sex with a Robot?

HuffPost Live



Will humans soon enjoy the option of having sex with robots? We discuss the technology behind this progressive idea, along with legal, moral and ethical implications. How will this human like sexbot alter reality? Will relationships suffer as a result?

Originally aired on October 5, 2015

“Should I feel badly that I acted unethically?”

By Craig Klugman
bioethics.net
Originally posted May 29, 2015

Here is an excerpt:

At the base of this whole scenario is the concept that medicine is a business and businesses need to know what their competitors are doing. Unethical businesses try to increase market share not by producing a better product or service, but by undermining their competition. Aside from the medical ethics issues in this case, there is a very basic business ethics concern: Do not harm another to further your own interest. One of the most important professional values in medicine is altruism—that your choices and behaviors are for the benefit of another, not yourself. Roger loses sight of that when he only sees a problem when he feels personally threatened. Altruism is a basic component of a profession. Medicine is a profession. Business is not. Thus, in this situation the values of medicine and the values of business collide.

The corporatization of medicine as a center of profit has lost sight of the goal, which is to help people in need. That a non-medical professional would open a clinic “as a side business” is disturbing. Medicine should not be a way for one to achieve wealth, but rather be a way to be a servant to the community. Business ethics should always come second to medical ethics in a healing environment.

The entire article is here.

The Perspective Gap Is Killing Your Business. Here’s How to Fix It

Empathy is a basic quality that we all crave. So why is it so difficult to demonstrate ourselves?

By Justin Bariso
Inc.com
Originally published April 29, 2015

Getting designers to show consideration for those taking care of warranty problems proved difficult. Initially, the company attempted a process-based solution, designing 26 new KPIs (including a 'repairability' scorecard and incentive), along with variable compensation.

The result? In the end, the process had almost zero impact. So the company decided to try something different.

The next time around, design engineers were informed that in three years (once the car was launched on the market) they would move to the after sales network and take charge of the warranty budget. In essence, they would deal with any problems caused by their own design.

This inspired what I like to call 'self-empathy'--empathy for your future self. The designers were moved to invest extra effort now to promote easy repairability later, since they were the ones who would have to deal with negative consequences.

Although very different in concept, the goal of these two methods is the same: See things from another perspective.

The entire article is here.

Measuring the Return on Character

Harvard Business Review
April 2015

Here is an excerpt:

Character is a subjective trait that might seem to defy quantification. To measure it, KRW cofounder Fred Kiel and his colleagues began by sifting through the anthropologist Donald Brown’s classic inventory of about 500 behaviors and characteristics that are recognized and displayed in all human societies. Drawing on that list, they identified four moral principles—integrity, responsibility, forgiveness, and compassion—as universal. Then they sent anonymous surveys to employees at 84 U.S. companies and nonprofits, asking, among other things, how consistently their CEOs and management teams embodied the four principles. They also interviewed many of the executives and analyzed the organizations’ financial results. When financial data was unavailable, leaders’ results were excluded.

The entire article is here.

Ethical Breakdowns

Max H. Bazerman and Ann E. Tenbrunsel

Harvard Business Review

Originally published in April 2011

Here is an excerpt:

Motivated Blindness

It’s well documented that people see what they want to see and easily miss contradictory information when it’s in their interest to remain ignorant—a psychological phenomenon known as motivated blindness. This bias applies dramatically with respect to unethical behavior. At Ford the senior-most executives involved in the decision to rush the flawed Pinto into production not only seemed unable to clearly see the ethical dimensions of their own decision but failed to recognize the unethical behavior of the subordinates who implemented it.

Let’s return to the 2008 financial collapse, in which motivated blindness contributed to some bad decision making. The “independent” credit rating agencies that famously gave AAA ratings to collateralized mortgage securities of demonstrably low quality helped build a house of cards that ultimately came crashing down, driving a wave of foreclosures that pushed thousands of people out of their homes. Why did the agencies vouch for those risky securities?

Part of the answer lies in powerful conflicts of interest that helped blind them to their own unethical behavior and that of the companies they rated. The agencies’ purpose is to provide stakeholders with an objective determination of the creditworthiness of financial institutions and the debt instruments they sell.

The entire article is here.

Insights for Writing a Code of Ethics or Conduct

Risk management, strategy, and analysis from Deloitte
via The Wall Street Journal

The heart of an organization is often expressed in its code of ethics or code of conduct. It tells the world what really matters to an organization and what it is all about. Companies that follow both the letter and the spirit of the law by taking a “value-based” approach to ethics and compliance may have a distinct advantage in the marketplace. Give the average employee a legalistic “thou shall not….” code, and a negative response is almost guaranteed. Give employees a document that states clearly and concisely the organization’s expectations, outlines acceptable behaviors and presents viable options for asking questions and voicing concerns, and the likelihood is much greater that they will meet those expectations and exhibit the desired behaviors. Make the contents of the code equally applicable to, and understood by, everyone in the organization—at all levels, across all business units and spanning the geographies—and you have a key ingredient for a code that becomes ingrained in the corporate culture, with all of the benefits.

The entire article is here.

Women and Leadership

Public Says Women are Equally Qualified, but Barriers Persist

Pew Research
Originally published January 14, 2015

According to the majority of Americans, women are every bit as capable of being good political leaders as men. The same can be said of their ability to dominate the corporate boardroom. And according to a new Pew Research Center survey on women and leadership, most Americans find women indistinguishable from men on key leadership traits such as intelligence and capacity for innovation, with many saying they’re stronger than men in terms of being compassionate and organized leaders.

So why, then, are women in short supply at the top of government and business in the United States? According to the public, at least, it’s not that they lack toughness, management chops or proper skill sets.

The entire article is here.

Business culture and dishonesty in the banking industry

By Alain Cohn, Ernst Fehr & Michel André Maréchal
Nature (2014) doi:10.1038/nature13977
Published online 19 November 2014

Abstract

Trust in others’ honesty is a key component of the long-term performance of firms, industries, and even whole countries. However, in recent years, numerous scandals involving fraud have undermined confidence in the financial industry. Contemporary commentators have attributed these scandals to the financial sector’s business culture, but no scientific evidence supports this claim. Here we show that employees of a large, international bank behave, on average, honestly in a control condition. However, when their professional identity as bank employees is rendered salient, a significant proportion of them become dishonest. This effect is specific to bank employees because control experiments with employees from other industries and with students show that they do not become more dishonest when their professional identity or bank-related items are rendered salient. Our results thus suggest that the prevailing business culture in the banking industry weakens and undermines the honesty norm, implying that measures to re-establish an honest culture are very important.

The article can be found here.

Behavioral Ethics

PBS
Originally posted June 27, 2014

Why are people dishonest? From Main Street to Wall Street, at home and at work, questionable behavior defies people’s best intentions. Now experts in the social sciences are examining why people so often behave contrary to their own ethical aims and what can be done about it, especially in the world of business. “What we find is that when people are thinking about honesty versus dishonesty,” says Dan Ariely, a professor of behavioral economics at the Duke University Fuqua School of Business, “it’s all about being able, at the moment, to rationalize something and make yourself think that this is actually okay.”




The entire page is here.

Unethical for the Sake of the Group

Risk of social exclusion and pro-group unethical behavior

By S. Thau, R. Defler-Rozin, M. Marko and others
Journal of Applied Psychology, Apr 28 , 2014, No Pagination Specified. doi: 10.1037/a0036708

Abstract

This research tested the idea that the risk of exclusion from one’s group motivates group members to engage in unethical behaviors that secure better outcomes for the group (pro-group unethical behaviors). We theorized that this effect occurs because those at risk of exclusion seek to improve their inclusionary status by engaging in unethical behaviors that benefit the group; we tested this assumption by examining how the effect of exclusion risk on pro-group unethical behavior varies as a function of group members’ need for inclusion. A 2-wave field study conducted among a diverse sample of employees working in groups (Study 1) and a constructive replication using a laboratory experiment (Study 2) provided converging evidence for the theory. Study 1 found that perceived risk of exclusion from one’s workgroup predicted employees’ engagement in pro-group unethical behaviors, but only when employees have a high (not low) need for inclusion. In Study 2, compared to low risk of exclusion from a group, high risk of exclusion led to more pro-group (but not pro-self) unethical behaviors, but only for participants with a high (not low) need for inclusion. We discuss implications for theory and the management of unethical behaviors in organizations.

Introduction

Rising reports of corporate scandals and incidents of employees engaging in behaviors that are considered "illegal or morally unacceptable to the larger community" (Jones, 1991, p. 367) have increased scholarly attention to the nature and causes of unethical behavior in organizations.

Examples of unethical behaviors include stealing from one's employer, deceiving customers, and misrepresenting performance (Trevino, den Nieuwenboer, & Kish- Gephart, 2014).

The costs associated with just one type of these behaviors--employee theft--are estimated at as much as $40 billion yearly (U.S. Chamber of Commerce, 2013), which is nearly ten times the cost of all street crime combined, including burglaries and robberies (Federal Bureau of Investigation, 2011).

A large body of research has identified characteristics of individuals, moral issues, and organizational contexts as antecedents of unethical behavior (Kish-Gephart, Harrison, & Trevin~o, 2010; Trevino, 1986; Trevino et al., 2014; Trevino, Weaver, & Reynolds, 2006).

The entire article is here, behind a paywall.

Reprints for the article can be emailed to this author.

Diversity Is Useless Without Inclusivity

By Christine Riordan
Harvard Business Review
Originally posted June 5, 2014

Over the past decade, organizations have worked hard to create diversity within their workforce. Diversity can bring many organizational benefits, including greater customer satisfaction, better market position, successful decision-making, an enhanced ability to reach strategic goals, improved organizational outcomes, and a stronger bottom line.

However, while many organizations are better about creating diversity, many have not yet figured out how to make the environment inclusive—that is, create an atmosphere in which all people feel valued and respected and have access to the same opportunities.

That’s a problem.

The entire article is here.

Does Morality Matter in Managing Businesses?

By Victor Want
Forbes
Originally published October 23, 2013

Here are two excerpts:

There is another way of looking at morality.  Instead of thinking of companies as entities, which is what the questions above do, let’s think of companies as collections of individuals.  When we do that, we see morality in a different way: because individuals are motivated by moral purpose.

(cut)

His central idea is that the primary responsibility of any executive is to define the organization’s purpose and instill loyalty, so that managers work for the organization’s good rather than for their own advancement. You can only achieve this kind of loyalty if you keep your employees satisfied, rather than viewing them simply as economic production inputs. In Barnard’s own words, “The morality that underlies enduring cooperation is multidimensional.”  He discusses how satisfying multiple moral codes, like responsibilities to customers and shareholders, is the key for employees to gain more senior roles. This often means reconciling competing obligations.

The entire article is here.

Ethical Systems: Insight # 4 on Darwin and Ethics

By Joshua Elle
Ethicalsystems.org Blog
Originally published May 5, 2014

#EthSys Insights is a video series where we have experts answer questions about ethical systems design. For our fourth installment, we had the pleasure of asking our Cheating & Honesty contributor, Robert Frank, to clear up contemporary misconceptions about the Darwinian view on cheating and honesty in business (the video is 148 seconds long).





Ethical Systems blog post can be found here.

Should Medical Schools be Schools for Virtue?

By Daniel Sulmasy
The Journal of Internal Medicine
Originally posted in July, 2000 and still relevant today

Here is an excerpt:

As Branch writes, “Medicine, after all, is a moral profession.” Yet medicine is increasingly viewed as just another business, and the concept of medicine as a profession, as a “special” endeavor with a different set of moral obligations and expectations, has been denounced as elitist, self-serving, and detrimental to the spirit of the competitive marketplace. Some fear that the recent financial reorganization of health care, premised upon the notion that there is nothing special about medicine, poses a particularly grave threat to the essence of medicine as a profession. Others argue that the professionalism of medicine can be reconstructed in such a way that it can guard against the financial forces that threaten to undermine its moral potency.

The entire article is here.

Drug Companies Promise More Data Transparency

By KATIE THOMAS
The New York Times
Published: July 24, 2013

Representatives of the world’s biggest pharmaceutical companies pledged on Wednesday to release detailed data about their drugs to outside researchers, a move that was applauded by some but also seen as an effort to head off more extensive disclosure requirements that are under review in Europe.

The announcement, made jointly by the two major pharmaceutical trade groups in the United States and Europe, signals a shift for the industry, which in the past has resisted calls to systematically share its data. The proposal was unanimously approved by member companies and is to take effect on Jan. 1. It would apply to all new drugs and all new uses for existing drugs, whether approved in the United States or the European Union.

The entire story is here.