MBA Research

Action Briefs

We learn a lot from the business community and want to share that with you in our Action Briefs that highlight business trends and their impact on the workplace and curriculum.

The Golden Age of Artificial Intelligence: Are We There?

In our June Action Brief. we explored how technology is altering business operations. An aspect of that was Artificial Intelligence (AI). Now, let’s take a closer look at artificial intelligence to examine its potential for further revolutionizing business operations.

Business Implications

A wide availability of graphics processing units (GPUs), almost infinite storage, and the Big Data movement have all helped AI development flourish over the past three years. A recent survey indicates that 39% of workers are using some aspect of AI at work, 87% say their job will change by 2020 because of AI, and 76% indicate that “some” or “half” of their job could be completed by AI or other technology right now. It is predicted that AI bots will power 85% of customer service interactions by 2020. AI startups received more than $5 billion in venture-capital funding in 2016, according to one report. Revenues from cognitive systems and AI are projected to reach $47 billion by 2020. The advent of quantum computing will further fuel AI embeddedness in the workplace.

Consider what is happening across the business spectrum:

  • Human resource professionals are using AI to gather and analyze online information about potential hires. AI also helps interviewers devise interview questions based on specific jobs or profiles.
  • Retailers are providing personalized shopping experiences for customers based on analysis of past customer purchases, location, weather, and other insights gained through AI. Suggestions are pushed towards the customer while they are shopping rather than at check-out.
  • Marketers are utilizing capabilities of some AI platforms to be able to predict the best times to engage particular buyers based on past behaviors and actions. AI is able to find patterns among individual and groups of customers and retailers can make use of this information in real time.
  • Some AI is beginning to measure human emotion which can help companies strengthen customer loyalty to their brand.
  • Brick and mortar stores are using facial recognition technology to help deter shoplifters. Some stores scan customer’s faces before doors will unlock for entry at night. Some systems send a text message to staff when a known shoplifter enters the premises.
  • Analytics are being used to better predict business activity and smooth out results. The hope is to help make financial outcomes more consistent over time.
  • Managers and others and are using AI to complete lower-level management tasks, maximize workflows, and automate various business processes which frees up their time to focus on more productive tasks, which can boost the top and bottom lines for businesses.
  • Metadata and analytics are being used to predict logistical issues before they happen including kinks in supply chains and traffic accidents.
  • Human swarming (or blended intelligence) platforms allow groups of users to login from any location and think together to solve problems and make predictions, decisions, and generate ideas.

Coincidentally, human swarming is one of the methods recognized for potentially stemming AI singularity (dominance). The concern is that some AI machines learn and advance on their own, and could possibly set in motion actions with negative and unforeseen consequences to humankind. There has even been talk of a “big red button” to be used as a kill switch if AI runs amok. The swarming method is thought to be one way of keeping humans in the loop with AI so it can be used to help with human decision-making, not replace it. Read this article to find out more: Teaching A.I. Systems to Behave Themselves.

Unsavory uses of AI, however, are a current reality. Natural-speech technology is advancing. Some companies are using chatbots to fool consumers into accepting goods and services unknowingly over the phone. This is commonly known as the “can you hear me?” scam. When consumers answer “yes” to a chatbot asking that question, they are noted as having subscribed to whatever service the company is selling. The chatbots are so lifelike that they can even laugh, say “uh-huh” appropriately, and adjust their vocal pitch contextually.

AI can also be used to help cyber-hackers root out vulnerabilities in technology with greater ease. More data collected via AI means the potential for more serious data breaches. We are seeing governments wage digital wars for which there is no kill switch. Fraud, extortion, and other cyber-crimes will become more sophisticated in the future. New resources and possibly a new industry will be required to counteract these risks.

Technology costs still provide many barriers to AI use in business. But as it becomes more accessible, how can businesses balance the rewards, while still being mindful of the concerns around it?

  • Carefully Evaluate AI applications that can immediately affect revenue and cost
  • Look for ways to implement AI to help produce more goods with the same number of people.
  • Evaluate how AI can be used to improve computer-to-computer functions before using to replace human functions.
  • Understanding the risks that accompany the use of AI is paramount. Make sure cyber-security measures are evaluated and strengthened as AI is adopted by your business.

Classroom Implications

Students will be familiar with AI that uses facial recognition through their use of social media. Ask them to identify other areas where AI is at play in their lives.

Get students thinking about what AI really means by posing some of the questions found in this article: https://medium.com/eliza-effect/science-fiction-movie-trailers-and-youtube-videos-i-use-to-help-kids-understand-artificial-38a6c08d4652

Educators may find this article helpful in thinking about AI as part of your students’ futures: https://www.edsurge.com/news/2017-03-16-what-does-it-mean-to-prepare-students-for-a-future-with-artificial-intelligence. The article notes that 65% of students will hold jobs that don’t yet exist. Ask students how they think their career choices might be affected by AI.

Students can also begin thinking about AI implementation strategies by studying how businesses have already implemented it. Ask them to speak with a mentor or business person in their community to hear about their experiences with AI.

AI is now performing the teaching-assistant role at some colleges. Ask students what they think about this. What are the advantages and disadvantages? Students will probably be interested in how educators feel about this development as well.

Technology is reshaping organizations across the spectrum. June’s Action Brief explores high-tech business operations and how companies are striving to make sure their workforce is prepared to manage the convergence of people, operations, and technology.

The use of technology in business operations can increase productivity and reduce deviations in standard processes.  In the last decade software costs have dropped, capabilities have increased, and the speed of delivery has improved. But, businesses are also finding that implementing new technology can be expensive, time-consuming, can bring about new security risks, and may leave their employees ill-prepared to function in the new environment.

Innovations in technology are changing operations in some of the following ways:

  • Artificial intelligence (AI) is advancing rapidly and becoming a mainstay in consumer and business applications. GEICO, Staples, and Macy’s are using IBM’s Watson in customer service operations. Einstein assisted 70,000 H&R Block tax professionals in filing over 11 million tax returns this past spring. Einstein, Salesforce’s version of AI is being used to provide “out of the box” sales insights that once required coding and customization to obtain.
  • Robots are replacing some workers. They are increasingly used in manufacturing and warehouse operations and are becoming increasingly sophisticated and being programmed to absorb data, recognize objects, and respond to environmental changes with more accuracy.
  • Robots at Amazon fulfill “one-click” orders in less than 15 minutes which is about one-fourth of the time it takes a human to complete the same task. Kiva robots have reduced Amazon’s operating expenses by about 20 percent. Lowe’s is now rolling out customer-helping robots (called Lowebots) in 11 stores in the San Francisco Bay Area.
  • Transportation management systems (TMS) are maximizing efficiencies in supply chains. They are becoming more affordable for small and mid-sized companies with the advent of cloud computing. Being able to track shipments on a 24/7/365, real-time basis is close to becoming a common reality. Most companies utilizing TMSs are realizing five-to-ten percent freight cost reductions. Last October, Anheuser-Busch and a company owned by Uber teamed up to deliver 2,000 cases of beer via a self-driving truck.
  • Inventory processes are being revolutionized by the advent of real-time tracking systems that are updated every time a product makes a move. The technology is especially helpful for retailers with hybrid or multichannel models.
  • Risk management areas are relying heavily on bots to predict potential problems with quality and compliance.
  • Supervisory Control and Data Acquisition (SCADA) systems use the Industrial Internet of Things (IIoT) to monitor and control entire operations, improving efficiencies and decreasing operational downtimes.
  • Bitcoins, blockchains, virtual/digital assistants, bots to track customer algorithms, and improved anti-fraud software are all creating major shifts in the retail world. A Kroger store in Ohio is using technology they developed (QueVision) to reduce waits in check-out lines. They have combined the use of QueVision with infra-red sensors at store entrances to reduce average wait times from four minutes to about 30 seconds. 


How can businesses prepare for changing roles and requirements as new technology is adapted?

  • Manage the changes from both short and long-term perspectives.
  • Make changes in automation gradually—without sacrificing core capability. Understand and plan for the overarching impact of the changes to manage them effectively. At the same time, keep in mind that change is happening rapidly across the board, and innovation through technology can sometimes define winners and losers almost overnight. Being nimble and ready to adapt to new technologies are keys to success.
  • Remember the soft side of automation. New leaders and managers will need to be experienced “business/technology hybrids.” These individuals will need to be able to shift seamlessly between managing people and managing experiences and technology. If they are not, gains to be made through automation could be lost. Partnerships between people and machines are growing more rapidly than machine-only operations.
  • Evaluate what skills need to be retained and or enhanced to prepare your workforce for the changes in automation. Many low-skilled and entry level retail workers are losing their jobs due to the increased use of technology. Unlike the manufacturing industry, retail has not been successful with helping workers make the shift to higher tech jobs. Walmart is one exception—they have an academy that helps employees advance their technological skills. They train about 250,000 employees per year and have the goal of joining forces with other large retailers to develop training standards that can be applied industrywide.


Classroom Implications

Successful business leaders need to be experts at managing both machines and people interchangeably. The following ideas can help students consider how business and technology are intertwined:

  • Ask them to view this video about Kroger’s line-reducing technology, and ask them how technology is shifting the world around them—in ways that may not even be noticeable to them:  https://www.youtube.com/watch?v=QuZuPKbTWqY
  • Ask them to consider the advantages and disadvantages of the closer relationship between business and technology. Some people are pushing to “keep jobs human.” Ask students to talk about the “right” balance between humans and machines.
  • Suggest that students complete a case study of a major retailer (i.e., Walmart, Kroger, Amazon, Target, etc.). Have them evaluate how those retailers have changed their approach to the marketplace based on technology. This article highlights some of the challenges in retail.
  • For those of you addressing project management in your curriculum, make sure students understand the difference between waterfall and Agile development/management models.
  • Schools are changing the way they teach business to include more of a technology focus. Information technology education is also shifting to include business foundations. Ask students to think about their education pathway. Are they preparing for a future that allows for the close relationship between business and technology?

Over a three-day period, last November, the MBA Research team met with groups of Nebraska executive-level business professionals and asked them to identify trends changing or shaping the way they do business. A common theme in each group was rapidly changing and evolving customer experiences. May’s Action Brief explores Customer Experience Management and the tools and strategies that some businesses are finding helpful as they seek to understand customers’ critical touchpoints and collective experiences.

Companies have recognized the need to understand what makes customers tick and how they can build brand loyalty. This has become more important to businesses since customers comparison shop on the Internet. Companies need to determine how to set themselves apart from the competition.

The customer survey is often used as a first step in analyzing customer feedback at different touchpoints with a company. This method of evaluation can be helpful in determining if a customer’s immediate need was met satisfactorily.

Big Data has also become a player in the evaluation of the customer experience. Leveraging Big Data helps organizations understand customer behavior, usage patterns, and preferences. Many companies utilize it as part of their effort to create personalized offers for customers. The nimblest companies use real-time data to evaluate potentially emerging issues which may require an immediate course adjustment.

The case for Customer Relationship Management (CRM) systems has also grown. CRMs track customer interactions and touchpoints over time and can help companies connect the dots in analyzing customer experiences on both small and large scales. Often, companies confuse the use of CRM systems with a customer experience management program; however, CRMs are just one tool that, when put to good use, can help companies manage and even direct customer experiences.

Customer journey mapping is by far one of the most important tools used to analyze and improve customer experiences today. Participants in our Marketing Executives Panel in Nebraska indicated that an understanding of customer experience mapping processes is crucial to success in business today. Once a full or key customer journey is mapped and understood, the door is open for a company to make changes that can improve customer experiences, and therefore, customer loyalty.

Businesses are using customer journey maps to:

  • Gain a 360-degree view of their customers experiences across touchpoints
  • Understand the reasoning behind customer behavior
  • Understand milestones or crucial moments in customer journeys
  • Align their organizations around customer-centric models
  • Optimize their customer service strategies


Touchpoint surveys, Big Data, and the use of CRMs have limited benefits for companies who have not yet taken the plunge to view customer journeys from a holistic perspective. Take the example of a leading pay TV provider who was getting good scores from customers through feedback regarding individual touchpoints. However, other feedback gathered through focus groups revealed that many customers were dissatisfied with the company overall. It wasn’t any one encounter that customers were unhappy with, but their overall experiences were often less than positive. The provider eventually mapped key customer journeys and was able to pinpoint and address some of the underlying issues, such as length of time for their onboarding process, that were plaguing customers.

The act of completing a customer journey map can in fact be a process that offers restructuring opportunities for companies. It can also be a great time for companies to explore their culture and company values to make sure they are customer-centric. The mapping process itself requires open communication among leaders and employees who may be in functional silos. They must talk and work together to form an accurate representation of customer journeys. Open communication, empowering employees dealing directly with customers, and following customer-centric values starting from the top down are all must-haves when it comes to building customer loyalty.

The recent United Airlines incident is a great example of technology being utilized to determine who would be “invited” to leave a flight. Instead, the situation called for human intervention to analyze the problem at hand and think through potential consequences of forced ejection. United, known for its excessively large “rule” books, has since rolled out 10 policy changes to address customer experiences, one of which is a promise to “empower employees to address customer service issues in the moment.”

Organizations that are able to successfully navigate the mapping process, and implement changes based on what they learn from it are seeing enhanced customer satisfaction and loyalty, reduced customer turnover, and increased employee engagement.

Classroom Implications

Customer Experience Management requires both art and science for success. Ask students to think about the customer experience components written about in this paper and identify which is art vs. science. Invite them to discuss why a company’s culture is central to customer experience management.

Suggest that students learn more about customer journey mapping by accessing the following websites:

https://www.nngroup.com/articles/customer-journey-mapping/

http://blog.uxeria.com/en/10-most-interesting-examples-of-customer-journey-maps/

Have students identify their positive and negative customer experiences and share how those experiences affected their loyalty to a business or a brand.

Discuss with students what it means to be customer-centric. In what ways can being customer-centric help or hurt businesses?

Ask students if it’s ever okay to “fire” a customer. Have them discuss situations where this may or may not be warranted.

Invite students to consider the recent United Air incident where a passenger was forcefully deplaned. Ask them to determine what they would have done differently if they were in the shoes of the airline and the passenger.

The world’s population is growing exponentially, now standing at 7.5 billion with the U.S. clocking in at 324.85 million. While this means the growth of almost everything in business, it also means that our environment and natural resources are being taxed in some unforeseen ways that can have a negative impact on businesses and the economy. This month’s Action Brief explores the environmental impact of geographic expansion and growth.

The strain on natural resources of the bursting population and rapid business growth is evident through food and clean water shortages in many parts of the world. Overflowing landfills and a lack of places to dispose of chemical waste are problematic. Land is over-farmed, and waste from fertilizers pollute the water. Increased urbanization is replacing much needed farmland. Individuals are commuting further distances and buying, consuming, and throwing away more than ever.

China and India are the most populous countries in the world and are becoming increasingly industrialized which creates more carbon emissions. While China has the highest CO2 emissions in the world, the United States, with fewer people and slower growth rates, still outweighs China and India in terms of per capita emissions (i.e., individuals in the U.S. are leaving larger carbon footprints). In December 2016, smog levels became so hazardous in China that everyday life came to a halt in Beijing. This “airpocalypse” stopped air and car traffic and closed schools. Face masks have become a part of everyday attire for Beijing residents.

Population, infrastructure, and industry growth also affect nature’s built-in storm protections for U.S. coastal areas. As an example, oysters help form natural barriers for waves. Over-harvesting of oysters for food, lime, or road-bedding materials left some coastal areas vulnerable to major damage from storm surges during Hurricanes Katrina and Sandy. To address this problem, many restaurants are now recycling oyster shells that are placed back in the water to help regenerate oyster beds. Some coastal areas are building multimillion dollar flood blockades to take the place of the now destroyed, naturally occurring oyster barriers.

E-waste generated by consumers and businesses is a growing problem. This year alone, up to 50 million tons of electronic waste are expected to be dumped—that’s up 20 percent from 2015. There are some recycling options, but the hope is that more electronic manufacturers will get on board with the provision of recycling programs. 

What role can be played in mitigating environmental stress? Many governments, businesses, and individuals are working to roll back some of the damage that has been done or to keep matters from worsening. 

  • China has become an outspoken voice on environmental issues and is now the world’s leading supplier—and user—of solar panels. China’s endeavors have served to decrease the price of solar panels by close to 90 percent in the last decade (which drove many American solar manufacturers out of business).
  • In southern France, 35 nations are collaborating on the development of a carbon-free source of energy that is gearing to be the first fusion device to produce net energy.
  • Many businesses are working to reduce their production waste and/or power their manufacturing efforts with solar or other forms of natural energy. Major corporations out in front with these efforts are Google, Nike, and Target. Much of their efforts are fueled by consumer demand.
  • Growing populations mean more tourists, which can stress environments in heavily visited areas. Consumers are seeking “green” travel, or ecotourism, opportunities. As a result, this segment of the travel industry is growing rapidly. 
  • Thirty-one states have passed legislation approving Benefits Corporations or B-Corps. These companies are able to make social and environmental agendas part of their legal business mission.

 

Implications for the Classroom

It’s easy for students to focus on what is directly in front of them rather than looking at the broader world view. To help highlight the rapid population growth, have students link to the U.S. and World Population Clocks as a way of viewing real-time population growth https://www.census.gov/popclock/

Ask students to evaluate how population growth has affected or changed the environment in their own communities. Have them ask older family members or friends for their perspectives. Ask students to evaluate how these changes have affected business and industry in their area either positively or negatively.\

Challenge students to consider what recommendations they would make to businesses to help promote sustainability within their communities, the United States, or on a global level.

How will new immigration rules affect the health of businesses? Will proposed changes strengthen or weaken our economy? How will the workforce be affected? This month’s Action Brief explores what is on the minds of business leaders as they anticipate and prepare for potential changes related to immigration reform.

The current administration has proposed or enacted the following measures which have heightened the immigration debate:

  • Temporarily banning immigrants from certain countries and all refugees coming into the U.S.   while a new vetting process is discussed and developed
  • Building a wall along the U.S.— Mexico border
  • Withholding federal funds for sanctuary cities
  • Increasing deportation of undocumented immigrants and documented immigrants with criminal records

 

Many business executives are not framing their views on immigration along political lines as much as they are on the potential effects of immigration changes to their businesses and the overall economy. Nationally, immigrants make up 13 percent of the population and 17 percent of the workforce. Several industries stand to be heavily affected by immigration reform depending on which of the proposed actions take place including science, technology, engineering, and math (STEM); construction; restaurants; hotels; and agriculture (including dairy producers).

The business community is especially concerned about the effect of proposed rule changes and potential adjustments to the skilled-employment visas (e.g., H-1B, L-1, etc.). Fans of these programs say they help employers fill jobs that Americans lack the skills to do. Critics are concerned that the programs enable companies to undercut jobs and wages for American workers.  

The fate of many immigrant entrepreneurs also hangs in the balance. It is estimated that 10 percent of Americans are employed by private, immigrant-owned firms. Immigrants to the U.S. are almost twice as likely to start businesses than native-born Americans. In addition, over half of privately held American companies worth $1 billion or more have at least one immigrant co-founder, according to a study by the National Foundation for American Policy.

While the U.S. is struggling to define new immigration policies, other countries are rolling out welcome mats for entrepreneurs. Canada, Australia, Brazil, Chile, Ireland, Singapore, South Korea, Spain, and the United Kingdom have all created visas specifically targeting entrepreneurs. Many U.S. companies, new and established, are now rethinking their global perspective based on anticipated restrictions for entering the United States. Businesses are considering whether to locate their business in the U. S. or other countries based on talent availability. At the same time, business must also factor in global tariff agreements which are being renegotiated. These agreements will impact over all costs and affect  the businesses’ ability to import and export supplies they need and products they wish to sell. 

Alessandro Babini, a French citizen and entrepreneur, with a company based in Cambridge, Massachusetts, fears deportation due to an expired visa. The fate of his company, which makes fitness gadgets, is unclear. He has a small staff, and he volunteers in his community to help other start-ups. He is one of many foreign-born entrepreneurs who is asking if doing business in the U.S. is worth it.

Economic considerations are key in this debate. While immigrants can burden public resources such as welfare, food stamp programs and use of medical providers, many also pay taxes and contribute to the health of the economy as consumers. Many illegal immigrants pay into the social security system without ever recouping their investments. Wage depression is real and documented, while its effects are heavily debated.

Businesses are preparing for potential changes in some of the following ways:

  • Asking non-citizen workers to refrain from leaving the country based on concerns that they may be denied re-entry
  • Analyzing and vetting their internal applicant reviewing and hiring processes
  • Verifying that all employee documentation is up to date (e.g. I-9 forms)
  • Preparing for extensive visa related audits, inspections, and investigations from immigration labor agencies, which can be time consuming and costly
  • Anticipating workplace raids by U.S. Immigration and Customs Enforcement Agents and learning about their rights in the event of a raid

 

Implications for the Classroom

Learning opportunities for students abound as almost every community across the U.S. has immigrants. Students can start by identifying immigrants in their area and asking themselves what role those individuals play economically within their communities.

If there are immigrants, or foreign-born students in your classroom, invite them to share personal family experiences related to their status and business implications if they are comfortable doing so.

Have students read the story of Juan Carlos Hernandez Pacheco, a successful restaurant manager who was arrested and is being detained at an Immigration and Customs and Enforcement facility.

https://www.nytimes.com/2017/02/27/us/immigration-trump-illinois-juan-pacheco.html

Ask students whether or not they feel Mr. Hernandez should be deported based on his history. This example will help students realize the complexities that our current administration, lawmakers, and business leaders are facing as they take the next steps in immigration reform.

Update: Mr. Hernandez was released from immigration detention on March 1, 2017. The following link provides further information:

http://www.cnn.com/2017/03/01/us/juan-carlos-hernandez-pacheco-hearing-release/

Several recent studies revealed that trust in institutions, including businesses, governments, Non-Governmental Organizations, and the media, is declining. Specifically, those with a high level of authority and expertise are viewed as less trustworthy than ever. While businesses are still viewed as relatively reliable as compared to the government and the media, CEO credibility is at an all-time low. Many people do not even trust the high-level executives of their own companies. Instead, they trust information found on search engines. They believe companies’ social media posts more than traditional advertisements. Among other factors, unstable economic and political conditions have deteriorated trust in organizations.

It is understandable that the general public might feel frustrated with those institutions they believe betrayed their wellbeing. But, societal shifts have altered the ways that people view themselves and others. The gap between the general population and “informed publics” continues to grow. According to studies, those who are college-educated and regularly keep up with world events have starkly different worldviews than those who are not. The general public is now much more likely to trust people who are “just like them” as opposed to those who are different from them. They seek sources of information that confirm their beliefs, be they biased or not. When they hear something that conflicts with their own opinions, they are much more likely to ignore it rather than researching to find the truth. Opposing viewpoints are usually disregarded, no matter how educated or informed the person behind the idea might be. In fact, “experts” are widely disparaged and thought of as outsiders who do not understand how to relate to “real” people.

While it is difficult to explain all the reasons for these changes, institutions (including businesses) have at times put themselves in a position to be mistrusted. Whenever executives break laws or engage in unethical behavior, they damage their relationship with society at large. Volkswagen and Wells Fargo are two recent examples of large corporations that tarnished their reputations with dishonesty, illegality, and disregard for the public interest. Publicized scandals, however, are not the only way that companies can lose trustworthiness. Businesses that are perceived as paying excessively high salaries to top executives while lower-level workers struggle may lead to distrust. Similar negative reactions might occur if a company moves profits to other countries to avoid taxes, even if the practices are legal and often required of executives who are charged with maximizing shareholder returns. Another recent example is alleged price gouging, specifically when a few medically necessary products are sold at unaffordable prices.  

Trust is an essential component of any relationship, whether between employer and employee, customer and business, or citizen and government. Therefore, government, media, business, nonprofit, and other organizational leaders need to determine why people do not trust them and how they can regain that trust.

Aside from avoiding illegal and unethical activity, leaders can work to build trust by trying to relate to citizens, customers, and audiences on a personal level. Using an everyday, casual, blunt style of conversation is more appealing to most than elevated, expert-level language. For example, those that have engaged with people in an informal style on social media have received positive attention. Building a relatable connection to leaders and their organizations as a whole can encourage people to trust the brand.

Another way that organizations can build trust is through empowering the community. Organizations that do good for society are seen as more trustworthy. Their aim should be to benefit the public, employees, and shareholders rather than causing harm. Many people seek out brands that are socially responsible or associated with positive causes. Environmental initiatives, sponsorships of charitable organizations, and ethical sourcing are examples of ways to build this goodwill. Organizations can also develop trust with the public by offering high-quality products, meeting customers’ needs, and listening to feedback. They should promote ethical practices such as offering competitive wages to all employees, paying taxes, paying returns to cover investment risks to shareholders, and working to put the customer first.

Organizations can also focus on treating their own employees well to demonstrate respect and trustworthiness. Transparency, loyalty, opportunities for growth, long-term thinking, and respect can help an organization encourage trust within its own ranks. If the leaders at the top of an organization demonstrate integrity, honesty, and respect, these ethical traits will be upheld across the board. Transparency is particularly important for an organization to show that it isn’t engaging in unethical practices behind closed doors. Opening up communications to make sure employees at all levels are informed is a great way to build trust throughout the organization. Leaders who demonstrate competence to their employees also earn trust because employees can count on the organization to be successful and secure.

Leaders should also be accountable when things go wrong or when they are at fault. If those at the top do not take responsibility when they make mistakes, no one in the organization will see the need to do so. Employees may become frustrated with leaders who refuse to fairly accept blame. Accountability makes leaders dependable. It leads to a culture in which everyone takes ownership for success.  

Classroom Implications

Trustworthy leaders are those that are ethical in everything that they do. Ethics, however, do not always come easily and naturally. Like any other skillset, ethics must be taught and practiced. Ethical education is critically important for students. If students are taught the importance of ethics from a young age, they will carry it with them. They will comprehend the relationship between ethical behavior and success. Students should become familiar with ethical principles and understand how to act when ethical dilemmas arise. If they can learn how to be trustworthy now, they will be prepared to be ethical leaders in the future.

Some discussion questions to help prompt an in-class conversation about the importance of ethical leadership:

  • Why do you think people prefer to trust “everyday” people rather than experts or people in power?
  • Why are some people tempted to act unethically or illegally, despite the many negative consequences?
  • Think of people or institutions that you trust. What makes them trustworthy?
  • Are there any specific companies or institutions that you do not trust? Why or why not? What could they do to gain your trust back?
  • What have you done that may have been unethical? Did anyone lose trust in you? If so, what can you do to regain their trust?
  • How can you encourage others to act ethically?

In November 2016, a 28-year-old man walked into a pizza parlor in Washington, D.C. and opened fire. This man, named Edgar M. Welch, drove from North Carolina to rescue children that he was sure were being held there against their will. He had read about Comet Ping Pong Pizza online. The restaurant was the target of a widespread Internet theory. Many articles and social network posts claimed it was the center of a child sex trafficking ring led by presidential candidate Hillary Clinton. Media sources such as The New York Times and The Washington Post debunked this theory, but it made little difference. The pizza shop and its neighboring businesses were hounded with threatening mail, phone calls, emails from people who were convinced of their guilt. It was only after Welch had already attacked the restaurant that he realized that his information was wrong. By then, the damage was done.

Problems with accuracy and integrity of information online are not new. On the Internet, anyone can be an author and publisher without much accountability. Today’s readers expect content to be updated to the minute. That “need for speed” reduces the time spent fact-checking and vetting sources. Internet articles are shared instantaneously and can spread across the world in minutes. They rely upon the number of people who open a page and click on advertisements to generate hefty profits.

These factors, combined with growing distrust of traditional news outlets, have changed the landscape of journalism. People no longer rely on the media to fact-check and provide them with the truth; instead, it is largely up to the readers, and most do not care to do so. It is easy to pass off fake information as the truth, as long as the readers want to believe it. In the past few years, hundreds of fake news websites have sprung up, making tens of thousands of dollars daily on advertising revenue. These stories are shared frequently because they tell people what they want to hear and use sensationalized headlines to generate interest. In the 2016 presidential election, false stories outperformed articles from reputable sources on social media. Many people believe that they influenced the outcome.   

Fake news stories are not just detrimental to journalism and politics. They also have real consequences for businesses – and not just the occasional restaurant targeted by conspiracy theorists. Reputation is key, and unfortunately, false information can damage a business’s character without cause. It is difficult to monitor online reviews or testimonials and ensure that nothing inaccurate is posted. Furthermore, if a company is accused of something unsavory in the press, it can be difficult to overcome that negative publicity, even if it is not accurate. For example, clothing retailer L.L. Bean became the target of proposed boycotts after it was revealed that the founder’s granddaughter and heir had contributed to the presidential campaign of Donald Trump. Though the company itself gave no money or support to any political campaigns, L.L. Bean was immediately at risk of losing business due to the online portrayal. A business can even damage its own reputation with one mistaken or incorrect post. Once something is put on the Internet, its mark has been made.

Inaccurate information can also hurt businesses internally as they seek and use information to inform their decision-making processes. Economic trends and world events are important to nearly any industry, but if a business is not getting accurate information, the decisions made based on that data might not lead to successful outcomes. False information can also affect the economy as a whole, not just individual businesses. One social media post can set off a chain reaction in the markets before it is revealed to be false.

While the spread of inaccurate information seems daunting, businesses can take several steps to combat it and protect their reputations. Checking the validity of sources is crucial. When looking at a news story or piece of online information, one of the first steps is to check the web address. Many fake sources try to imitate reputable news outlets by using parts of their names or copying their web design. However, closely inspecting the web address can reveal that the source is not actually reliable. Businesses can also check the owner of the domain name using Internet directories to see whether or not it is legitimate. It is a good idea to compare an article to a wide variety of sources to separate the facts from the bias.

Technology has made it much more difficult to identify accurate information. However, it has also led to the development of tools to help solve the problem. Reverse image searching, plagiarism detectors, and browser plug-ins can check sources and determine whether or not a page is reliable.

As a final note, businesses should always be skeptical of using social media as a source of news and information. Social media platforms spread stories at a rapid rate and have been criticized for not vetting sources. Posts on social media should not be taken at face value; rather, it is important to check the source and look for the same information in other, more reputable places.

Businesses also need to take the appropriate precautions to make sure that they do not spread false information or become the victim of it. Before posting anything on social media or making any decisions based on research, companies should think twice and do the required work to vet sources. If possible, organizations should have a system in place to help ensure that all posts are appropriate and accurate. Business should also avoid any association with inaccurate sources to preserve their integrity. They should be continuously aware of what people are saying about them by checking reviews online. If necessary, businesses can seek legal action against those who defame them. However, this process is often costly, time-consuming, and ineffective. By the time a lawsuit happens, the damage to the organization’s reputation is already done. It is better to deal with situations as they occur, responding quickly to any negative press in a respectful and effective way.

Classroom Implications

The Internet is an integral part of the lives of today’s students. They are used to perusing Twitter and Facebook rather than a newspaper or television news. Therefore, they are generally less skeptical of social media and random websites. While they have been exposed to a wide variety of sources, this exposure has not made them more discerning readers. In fact, students’ media literacy is shockingly low. In a study conducted by Stanford University, students were evaluated based on their ability to distinguish between ads and articles. The study also examined their ability to determine the trustworthiness of a source. At every level from middle school through college, students were not adequately able to reason about information found on the Internet. They were often fooled and failed to recognize bias. As the prevalence of false information grows, it is concerning that the next generation is not prepared to properly vet online information.

Teachers need to implement strong media literacy skills in the classroom as early as possible. They can point out ways to check sources and strategies for determining what is truth and what is biased. Caution students to be skeptical of writers’ hidden agendas—e.g., political agendas, medical agendas. Programs such as The News Literacy Project provide resources for teachers to educate students about the importance of being smart, discerning readers. Strong media literacy skills will help them to maintain skepticism when evaluating news in the future. Furthermore, students should know about the effects of spreading false information. They will then be more careful to avoid posting without checking sources first.  

This month's Action Brief focuses on society’s increased desire for instant gratification tailored to individual preferences.

Business Implications

The Golden Arches of McDonald’s, one of the most recognizable symbols in the world, represents American culture across the world. The global penetration of the chain and that of its competitors has had a large impact on society. Their effects are not only related to eating habits. They also impact customer behavior, business models, and product development.

Customers expect McDonald’s speed and efficiency at other businesses. Burger King, for example, offers to customize menu options with its “Have It Your Way!” campaign. The desire to “have it my way” has also caught on across businesses. Products must not only be quick and easy; they must be catered to individual needs and preferences. Customers want exactly what they want – and they want it now.

High-speed Internet access and mobile devices have made it easy to do whatever one wants at the click of a button. We can use social media to see what friends are doing in real time. We can communicate and receive split-second responses. With search engines, we can find the answer to any question in seconds. Naturally, consumers have begun to expect that their economic needs and wants will be met just as quickly.

Because of increased technological capabilities, personalization and efficiency are now standard expectations. The food industry is perhaps the most obvious example. Build-your-own-meal restaurants such as Chipotle appeal to customers with their speed and customization. Online orders from grocery stores or restaurants can be delivered right to the customer’s door.

This desire for efficiency and customization is found in many product categories. Instead of spending time hailing a cab or waiting for public transportation, customers can order a car by phone.  Music streaming services such as Pandora and Spotify predict the music users want to hear with individualized playlists, rather than listeners taking the time to discover music on their own. Even dating and relationships have become customized, convenient experiences with the use of mobile apps, enabling people to connect with others who fit their exact interests and specifications.

No industry seems to be off limits or incapable of adapting to this new model. Businesses can look to innovative companies such as Uber, GrubHub, InstaCart, and Amazon as examples. Among many others, these organizations stand out due to their responsiveness to customer convenience. They show that it is possible to make nearly anything available instantly and easily. Companies wanting to emulate these brands should look for creative, innovative ways to simplify people’s lives.

But, it doesn’t take a new business model to satisfy customer insistence on customized, efficient services. Businesses are implementing agile practices companywide to increase reactions to changes that are shortening product life cycles. Many companies are also using customer-experience mapping to provide better, more responsive service. Rather than focusing on individual customer touchpoints, this approach helps businesses to follow a customer from initial contact throughout the customer journey with the company. This improves efficiencies by cutting across departmental siloes and processes to improve the overall customer experience.

Supply chains have emerged as a critically important focus for improving efficiencies. Suppliers and wholesalers need to follow through with guarantees and be transparent to their business customers. Supply-chain processes are being examined to eliminate any inefficiencies.

Businesses must also be aware of the way that instant gratification affects potential new employees. Today’s entry-level job seekers want to reach their career goals much more quickly and easily than ever before. They want a career that is perfectly tailored to their skills and interests. Rather than attempting to “sell themselves” in an interview, job seekers instead try to find out what the company can do for them. Companies must find ways to become employers of choice through day-to-day respectful treatment, customized work options, instant feedback on performance, social involvement benefit options, schedule flexibility, promotions, and compensation programs and more. Otherwise, they risk not being able to hire and losing talented employees to other positions.

The need for speed is not going away. In fact, demand for efficient and customized products is likely to increase. Businesses must strive to find the balance between speed and cost efficiency when customizing and personalizing. The companies and employees who find creative solutions to people’s problems will be the ones that succeed.

Classroom Implications

Students need to understand what business models are and that they will continue to change. Have students identify the business models of local businesses and recommend ways that one of those businesses could change its business model to be more responsive to customer needs.

Students should learn about the types of jobs and industries that will grow due to the instant gratification trend. Ask students to identify businesses that have surfaced due to customers’ need to have it my way—now.

Have students map their customer experience with a business, asking them to identify their initial contact with the business all the way through the product purchase. Ask them to identify any glitches encountered along the way and to recommend how to improve business processes.

Prepare students to have appropriate expectations when they begin seeking a job. Those who know what to realistically expect will be better equipped for success. Finally, students should grasp the importance of trends that create new business opportunities.  

While professional and personal lives have often been kept separate, the prevalence of internet has increased awareness of employees’ extracurricular activities and begun to blur these boundaries. Employers can easily become aware of who their employees are and what they do. The damage from a scandal, unfavorable publicity, or legal trouble is more permanent and detrimental than ever, with news spreading at the speed of light and negative events permanently recorded and accessible to the entire world. For these reasons, it has become commonplace to heavily scrutinize the behavior of employees, both in the office and outside of it.

How do companies examine their employees? What is beneficial for them to know? What are they legally allowed to know? Generally, businesses should be aware of employees engaging in any sort of risky activities that could bring negative effects to the organization. Those negative effects can be in terms of productivity, public image, or legal liability. Many of these issues can be uncovered before someone is even hired. Employers generally run background checks to find out about potential employees’ criminal history, past employment, education, test scores/licensure, credit reports, etc. – but most of those require explicit permission from the potential employee. With some of these checks, such as criminal record and credit reports, employers are required by law to advise the applicant in advance of taking action that they may be taking adverse action based on the “credit report” and are required to provide a copy of the report so that they have a chance to contact the courts or credit agency to correct errors in records or identification. The employer must also communicate that they have taken adverse action after providing time to the applicant to contact the employer that they are trying to correct inaccuracies in the records. 

Increasingly, companies are turning to social media as a de facto background check. Many people do not even realize how public and readily available their social media presences are. Performing a search before hiring someone can reveal whether or not the interviewee’s online profile includes anything illegal, reprehensible, or incongruous with the company values. 

Once hired, employees are not yet free from the watchful eye of their employers. During working hours, managers want to know how workers are spending their time online. The use of social media and other non-work related sites during paid hours is a problem for employers who expect productivity and are worried about abuse of paid work time time. Organizations generally have the right to monitor the way their employees use company resources, including email, Internet use, and working hours. Most companies have a policy in place regarding when and how they can surveil employees’ email and computer use. They reserve the right to monitor and impose consequences on those that violate policies regarding computer use. Policies often ban employees from viewing inappropriate materials, engaging in personal conversations, or visiting non-work related websites. Employees are generally required to sign off on the company’s policy so that the company legally has the right to access and use information regarding their Internet use. A well-worded, specific policy is important to protecting businesses since surveillance of private information can be a gray area if not clearly defined. 

Outside of working hours, people are not exempt from employer scrutiny. Businesses may need to be aware of what employees are publishing on the Internet to protect themselves. Content that employees post can be problematic for employers who may feel that social media posts are disparaging, inappropriate, or could reflect badly on the organization as a whole. If an employee posts something that could be deemed inappropriate or detrimental to the company, organizations may have the right to terminate him/her – the First Amendment protects the legal right to free speech but not the right to speak freely while maintaining one’s employment. Social media accounts, personal blogs, and websites can all be monitored if made available and public. Businesses have the ability to protect themselves from those who cause them damage, whether intentionally or not. 

Employers’ rights to monitor off-duty conduct are not unlimited, though. Some states prevent companies from firing employees for engaging in conduct outside of work if it is lawful. For example, if employees post photos on their social media pages of them using a legal substance such as alcohol, employers cannot necessarily fire them, unless the consumption of alcohol is related to that employee’s work or the business’s interest. Employees who discuss wages or working conditions online are also often protected due to labor laws. Companies need to be familiar with their state’s particular laws regarding off-duty conduct to avoid any costly litigation. Further, businesses should be consistent in their handling of discipline when such issues arise. 

Another aspect of employee conduct that is heavily scrutinized is research. Research is increasingly done online, which brings with it a new set of ethical requirements. Informed consent is an important aspect of any research study, but it is more difficult to ensure it has been obtained online than it is to do so in person. The Internet makes it less clear what information is public and private. Research studies should be designed to protect the company from any potential problems by obtaining as much permission as possible when dealing with private information. Furthermore, when privacy permission is obtained, companies must make it clear what that permission entails. For example, if a researcher is granted permission to use an individual’s data, does this permission apply to all members of the research department, or just the specific researcher in question? What about other members of the company or industry as a whole? How can that data be used? 

Well-written privacy statements and terms of agreement are necessary to protect companies in situations such as these. With the cost of doing research in today’s landscape, businesses cannot afford to make ethical mistakes and should provide significant oversight to ensure ethical research principles are upheld. 

In the Classroom

Students may not truly understand the future impact that their online presence can have on their careers and personal lives and on their places of employment. Have students conduct online research to identify situations in which businesses have acted/re-acted to postings of job applicants or employees. Have students work in small groups to share their findings.

Students need to be aware that the Internet blurs the lines between their private and public lives and that nothing online is truly private. Students can perform an online search of themselves using their names. When they see what information about them is already publicly available, they may be motivated to use discretion in the future. Learning to be professional online, including on-the-clock and off-duty conduct, is a crucial skill. 

Students should also be aware of their rights and what is legal and illegal in situations regarding privacy and off-duty conduct. Ethical research practices also affect students, as they will most likely engage in some sort of study as either participants or researchers during the course of their lives.

 

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