Fourth Industrial Revolution

How businesses can create an ethical culture in the age of tech

technology ethics laptop

There's a gap between intentions and actions on ethics Image: Photo by Ales Nesetril on Unsplash

Ann Skeet
Senior Director, Leadership Ethics, Markkula Center for Applied Ethics, Santa Clara University
Jim Guszcza
Fellow, Center for Advanced Study in the Behavioral Sciences
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This article is part of: World Economic Forum Annual Meeting
  • Even companies with good intentions sometimes fail on ethics.
  • Proper systems can help address the gap.
  • This article is part of a series on tech ethics including how to create ethics champions and getting AI right.

According to the Oxford Dictionary, the 2018 word of the year was “toxic” and one of the words it was most often collocated with was “culture.” The choice is made by the dictionary each year to” reflect the ethos, mood, or preoccupations of the passing year.”

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As technologies continually proliferate through virtually all corners of the private and public sectors, executives will also be expected to set the organizational tone for the ethical design, development, and deployment of technologies. Setting the right tone at the top and providing unconscious bias training, among others, are common ways of improving organizational culture.

An intention/action gap

The World Economic Forum’s Fourth Industrial Revolution steering committee for the Responsible Use of Technology polled 99 Forum members and their partners to better understand the factors that contribute to open or “speak up” ethical cultures. The poll leveraged research and tools created at the Markkula Center for Applied Ethics to gauge the maturity of organizations in applying ethics to decision-making.

The results of our survey were consistent with the existence of a gap between organizations’ desire to act ethically and their understanding of how to follow through on their good intentions. Borrowing a term from behavioral economics, we refer to this as an intention-action gap. Further evidence of this gap is manifested in the number of well-intentioned companies that still experience ethical issues with products, services and business practices.

Conditions that support ethics

One promising finding of the survey was the number of leaders who characterize their organization as recognizing their role as an actor in broader society. This implies that the company understands that its actions influence society, and that it is in turn influenced by what is happening in society.

Another condition key in promoting ethics is ethical deliberation. Companies participating in this poll were asked to identify attributes of decision-making in their organizations that are identified with ethical deliberation processes. Overall, the response rates on ethical deliberation were still quite strong, though it was clear that companies are more comfortable with two aspects of ethical deliberation: first, using data and information; and second, considering the implications of the decisions as part of the process. This second response is also encouraging in that anticipating the downstream effects of decisions is a crucial part of ethical reasoning.

There was, however, a much lower response rate to the question asking leaders whether they could identify ethical concerns. Once again, this is consistent with the existence of a gap between the desire to lead ethically and the ability to follow through. Three tangible elements of ethical deliberation that companies that can strengthen are: the inclusion of people affected by the decision, using consensus to reach decisions, and the explanation of the reasoning behind decisions made.

Companies also self-identified a level of comfort with speaking up to voice concerns. This is an indicator of the existence of a climate of trust and understanding within the organization, another pre-condition of ethical behavior. However, responses on this condition were somewhat lower than certain attributes of ethical deliberation, and considerably lower than responses indicating an openness to considering societal impacts.

Moral reasoning capabilities

Individual moral reasoning is developmental, analogous to such learned skills as reading and writing. Organizations can evolve similarly. Many people develop their moral reasoning to what is considered a conventional level, meaning they have the desire and ability to adhere to rules and laws; are aware of other people and their needs; and possess a desire to make them happy. Approximately half of the responses to our poll were consistent with this level of moral reasoning. Those with more robust, well-developed practices around ethics were able to achieve more complex reasoning. The more ethically developed companies might, for example, possess a greater capacity to identify the implications for minority groups and plan for those and also the willingness to adhere to universal principles around right and wrong.

Companies able to respond quickly and assuredly in the face of complex issues affecting their businesses are operating at this higher level of reasoning. They have, through various communication channels, organizational decisions, and resource investment and statements, captured the beliefs upon which the company operates and makes decisions in the context of what is happening in society.

As with individual people, organizations’ capabilities vary widely. For some companies, even talking about ethics still raises anxiety or concern. It is interesting to observe that many respondents answered positively to the survey’s opening question, and then opted not to respond further. This might reflect the challenges confronting ethical discourse in corporate settings, and perhaps reflects a level of discomfort with the topic.

Practical application of ethics

Respondents felt their ethics tools and processes were well integrated and seen as a natural part of the job than felt, for example, that they were used regularly and with habit and operationalized in a way that gave clear guidance. This further supports the gap between intentions and actions.

A data analysis of the survey results suggests steps that might help guide organizations in their application of ethical deliberation:

1. Having proper systems to identify, address, and remedy ethical use concerns contributes to greater clarity among employees.

2. Being able to identify ethical concerns contributes to creating a climate of trust. This makes a case for investing resources in this activity.

3. The value of teaching people to identify ethical concerns was reinforced.

What does this mean for corporate leaders?

Drawing on the findings from this initial poll – as well as the work done by the partners in our steering group - we can point to considerations for executives who wish to close the gap between organizational desires to act ethically and their ability to actually do so.

1. Investment in organizational design and resources committed to the training of employees on ethics, the ethical use of products, and the potential for bad actors to use products and services to do harm, are each supported by this first pass.

2. Ethical champions are one investment companies can make to more broadly distribute ethical reasoning abilities in the organization. Pointing these champions towards identifying ethical issues and improving ethical decision-making are good places to start.

3. Support may be growing for the identification of global ethics to be supported by international organizations.

4. More qualitative, ethnographic research in these areas would benefit companies who want to know more about the specifics in their own organization and others to help them close the intention/action gap that exists around ethics. The Markkula Center offers some culture assessment tools for doing so and makes recommendations for how companies can proceed.

There can be a tendency among action-oriented business people to see ethics as frustrating their corporate goals. This is an incorrect way to view ethics – ethics can act as a brake pedal on some actions, but it acts as an accelerator for others, and ultimately, as with brakes on an automobile, it helps you get to your goals faster than if you did not have them.

We recommend that executives identify and support mechanisms in their own organizations that factor processes in to consider the complexities presented by ethical decision making. Even if the processes are complex, the contribution to value creation that ethics offers can be tangible and economically significant in the longer term.

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