Playing with FIRe: Responsible Business

and Management Research in the Era of the Fourth Industrial

Revolution

Dr. Benito Teehankeebenito.teehankee@dlsu.edu.ph

Full Professor, Management and Organization Department

Coordinator, Business for Human Development Network

Ramon V del Rosario College of Business, De La Salle University

Vice-President, Philippine Academy of Management

Outline

• What is the Fourth Industrial Revolution (FIRe)?

• What are the opportunities?

• What are the challenges?

• What are the challenges of analytics and big data? Case stories

• The movement for Responsible Research for Business and Management

• A call for action: Towards a research agenda

Prometheus stole fire from the gods and suffers for it: Will we suffer for the emerging FIRe?

A critical question

•Is more better?•Is faster better?

Case story 1: Big data and Nokia

• Nokia was the overwhelming market leader in 2009 and they had plenty of data to support their dominance

• Were they missing anything?

Researcher Tricia Wang getting thick data onemerging Chinese consumption patterns

Researcher Tricia Wang getting thick data onemerging Chinese consumption patterns

Tricia Wang told Nokia that the average Chinese was willing to spend a lot on smartphones. Nokia didn’t believe her because the company’s big data didn’t support her findings

Smartphone sales in China explodesfor companies using Android; Nokiasales drops and never recovers.

Smartphone sales in China explodes for companies using Android; Nokia sales drops and never recovers.

Using Microsoft Power BI “Quick insights”

The Rise of Enron

Case Story 1: Enron Corporation

The Fall of Enron

Andrew Fastow lectures at De La Salle University

Andrew Fastow: Expert data manipulator

• His confession: “intentionally created a false appearance of what Enron was — it made Enron look healthy when it really wasn’t.”

• “Accounting rules and regulations and securities laws and regulation are vague,” Fastow explained. “They’re complex … What I did at Enron and what we tended to do as a company [was] to view that complexity, that vagueness … not as a problem, but as an opportunity.” The only question was “do the rules allow it — or do the rules allow an interpretation that will allow it?”

Andrew Fastow on trialThe former CFO of Enron Corporation

“I was greedy, yes.”

“When you misrepresent the nature of

your company, when you artificially

inflate earnings, when you improperly

hide losses, when you do things like that

to cause your stock price to go up, that is

stealing.”

“I’ve destroyed my life. All I can do is

ask forgiveness and be the best person I

can be.”

Fortune, April 3 2006

Principled decision-making means following the

spirit of all ethical principles when taking action.

Decision systems based on targeted numbers tend

to deliver exactly that: Be careful what you wish

for; you will get exactly that

If you don’t know how to design metrics which

can’t be gamed, we have a problem

The tension between principled decision-making and numeric planning and decision-making systems

What does this picture tell you?

You are likely wrong, if you don’t have context information on the situation depicted in the

picture

What data shows

What you need to know

Clap hands

Data Scientists, Take A Hippocratic Oathby Lori Sherer

• I recognize that data science has material consequences for individuals and society, so no matter what project or role I pursue, I will use my skills for their well-being.

• I will consider the privacy, dignity and fair treatment of individuals when selecting the data permissible in a given application, putting those considerations above the model’s performance.

Data Scientists, Take A Hippocratic Oathby Lori Sherer

• I have a responsibility to bring data transparency, accuracy and access to consumers, including making them aware of how their personal data is being used.

• I will act deliberately to ensure the security of data and promote clear processes and accountability for security in my organization.

• I will invest my time and promote the use of resources in my organization to monitor and test data models for any unintended social harm that the modeling may cause.

Andrew Fastow and Keencorp

Lessons for FIRe proofing management

•Do not obsess over rules and numbers. It will make you foolish and heartless. Reflect on the principles involved and enhance big data with thick data to improve management judgment.

• Learn from different fields so that you understand more of business and social reality: natural scientists, psychologists, sociologiests, anthropologiests, political scientists, geographers, statisticians, economists, climatologists, etc.

A Responsibility Turn

Position Paper“A Vision for Responsible Research in Business and Management: Striving for Useful and Credible Knowledge”

www.rrbm.network

Two Forms of Responsibility

•To Science• Reliable, repeatable discoveries and

findings• Credibility dimension of responsible

research

•To Society• Knowledge that will contribute to better

business and a better world• Usefulness dimension of responsible

research

Responsible Research defined

Scientific work that produces credible and reliable knowledge with either direct or indirect usefulness for addressing problems important to both business and the society.

The aim is to produce robust knowledge to prepare our students and managers to tackle the grand

challenges of the 21st century.

The 21st Century Grand Challenges

1. Technology and Artificial Intelligence

2. Internet and E-Commerce

3. Globalization and New Economies

4. Environment and Global Warming

5. Economy of Exclusion and Inequality

6. Terrorism and Political Instability

Seven Principles of Responsible Research

1. Service

to Society

Principle 1Development of knowledge that benefits business and the broader society, locally and globally, for the ultimate purpose of creating a better world.

Three Principles for Credibility

4. Sound

Methodology

5.

Stakeholder Involvement

6.

Impact on stakeholders

7.

Broad Dissemination

2.

Basic and Applied

3. Pluralistic and

Multi-disciplinary

1. Service

to Society

Principle 2Contributions in both the theoretical domain to create fundamental knowledge and in applied domains to address pressing and current issues.

Principle 3Diversity in research themes, methods, forms of scholarship; interdisciplinary collaboration

Principle 4Research that implements sound scientific methods and processes in both quantitative and qualitative or both theoretical and empirical domains.

4. Sound

Methodology

5.

Stakeholder Involvement

6.

Impact on stakeholders

7.

Broad Dissemination

2.

Basic and Applied

3. Pluralistic and Multi-disciplinary

1. Service

to Society

Principle 5Research that engages different stakeholders in the research process, without compromising the independence of inquiry.

Principle 6Value and reward research that has an impact on diverse stakeholders, especially research that contributes to better business and a better world.

Principle 7Diverse forms of knowledge dissemination that collectively advance basic knowledge and practice.

Three Principles for Usefulness

So what? Levers of change?

4. Sound Methodology

5.

Stakeholder Involvement

6.

Impact on stakeholders

7.

Broad Dissemination

2.

Basic and Applied

3. Pluralistic and

Multi-disciplinary

1. Service

to Society

Core

Credibility

Usefulness

Internal Levers

1. Journal Editors and PublishersPublish replications, negative findings, and non-significant findings ....

2. Scholarly Association LeadersProfessional commitment…to a higher aim of service to society...

3. Scholars and Doctoral Students Follow the principles of responsible science in their roles as

authors, reviewers, editors, educators, and evaluators4. Univ Leaders, Deans, Dept Heads, Sr ScholarsRedesign promotion and tenure criteria….

External Levers

5. B School Asso and Accreditation Agencies

Include societal impact of research in assessment standards…

6. Funding Agencies and Government

Broaden the criteria to include social impact for funding decisions

7. Business, alumni, NGO, students, society

Provide input, feedback, access and trust

Strategic Management Journal (2016)• Editorial call for repeatable results with emphasis on data accessibility and

transparency.

• Publish replications.

Management and Organization Review

(2016)• Developed policies of replication, data accessibility.

• Offered a two stage review process (pre-approvals) to prevent p-hacking and

HARKing.

Journals’ New Policies

Journal of International Business Studies (2017)

• Defines 10 principles (e.g., use of statistics) to increase the reliabilityand accumulation of knowledge.

Journal of Applied Psychology (2018)

• Pre review (data depository, hypotheses pre-registration).

• Review (greater transparency of procedures and measurement).

• Post review (self-correction, retractions, replication).

• Address important phenomena.

Journals’ New Policies

University of Michigan• New Associate Dean for Business+Impact (2017)• Add Practice to R,T, and S roles of faculty• Engage with 18 other university disciplines• Tackle local and global societal problems, e.g., poverty, job creation, social

entrepreneurship, social impact finance

Business School Lausanne• Mission to serve society: “A learning platform to enable individuals and

organizations to thrive by co-creating viable business solutions for people and our planet.”

• Three research centers focused on serving society:

1. Sustainability center2. Responsible Leadership center3. Positive Impact center

Initiatives at Some Schools

Peking University, Guanghua School of Management

• Thought Leadership Platform

• 5 million RMB funding of 25 research projects on seven strategic areas: industry upgrading and innovation, new and development finance, economic reform, national development

• 7 postdoc positions and staff support

Singapore Management University• Dean’s Impact Grant to foster impact-driven mindset• Customize research for the Southeast Asian context, e.g., financial

inclusion of poor families• Tri-sector Collaboration – private sector, civil society, government

Pioneer Schools – Funding Priority

Rotterdam School of Management• “To be a force for positive change in the world” • UN SDGs as a framework to guide teaching and research• Business models that combine doing well and doing good.

University of Notre Dame, Mendoza College of Business• Dean’s Mission Research Award• Published papers that contribute to the common good• One award in each of five disciplines

Pioneer Schools – Research Focus

Towards a Research Agenda

•“In all moments of major technological change, people, companies and institutions feel the depth of the change, but they are often overwhelmed by it, out of sheer ignorance of its effects.”

• “The fourth industrial revolution” van Klaus Schwab, World Economic Forum (2016).

Call to action• Study and support the Responsible Research for Business and

Management (RRBM) position paper. Go to http://rrbm.networkFor assistance from the Business for Human Development Network, email benito.teehankee@dlsu.edu.ph

• Prioritize research that:• Enable business practice to be a positive agent for human and social

development

• Look at how FIRe benefits can be optimized and its potential harms mitigated

• Promote a critical and ethical view towards big data and business analytics