Report from the Research Frontier: February 2019
New findings: Involve women for better group decisions; the data industry needs CSR; and change languages to increase future focus
Humans tend to be overconfident in our decisions — too certain that our beliefs, judgments, and predictions are accurate. This kind of bias negatively impacts organizations. For example, overconfident investors take too many risks and earn lower average returns.
Researchers Steffen Keck
and Wenjie Tang
have a solution: involve women in decision making. In laboratory experiments, Keck and Tang found that groups including at least one woman are better “calibrated”: knowing whether they are uncertain or sure of a fact.
This finding has clear application to sustainability, the researchers told NBS. They pointed to forecasts concerning the consequences of climate change or the impact of green energy policies. “Such forecasts typically involve high levels of uncertainty and are expressed as confidence intervals or probabilities,” they said. “Forecasts in these situations are frequently overly ‘precise’ (underestimate the amount of uncertainty) and our findings suggests a way to reduce this problem.”
Having women present also makes discussions more effective. Keck and Tang found that when women are in a group, time spent sharing information and ideas improves confidence calibration. But Keck and Tang found that discussion actually harms confidence calibration for all-male groups. A likely explanation: in all-male groups, discussions ended more quickly and were more likely to be dominated by a single member.
Responsible business practices by the data industry are “very much in infancy,” write researcher Mikkel Flyverbom
and colleagues. These companies – such as Facebook and Spotify – collect and use vast amounts of data on individuals. The novelty of their business model means that, until recently, they escaped close scrutiny.
Corporate social responsibility (CSR) issues occur at each stage of their operation:
- Data gathering: CSR issues relate to violation and intrusion of privacy, the consent of the data provider, and the transparency with which big data companies collect the information.
- Data processing and aggregation: Even if data are gathered with consent and transparency, combining them might provide new information which no longer meets those criteria. Worker treatment is also a concern, with data companies driving an unstable “gig economy.”
- Data usage: Applications such as advertising can infringe on individuals’ personal space. Data services can also change the way humans interact, socialize, and take responsibility – an example would be Snapchat’s disappearing messages.
The industry is failing to grapple with these issues, the authors write. The Global Network Initiative
represents a “lukewarm and arms-length approach,” and companies have undertaken little voluntary action or standardized reporting.
What should companies working with the data industry do? Speaking with NBS, Flyverbom recommended "treating big tech companies more like normal companies, for instance by asking for clearer terms and specifications when we work/partner with them." Another option is to "build our own solutions and tools rather than rely on the so-called free services they provide."
Sustainability advocates often say that firms need to think more long-term. Researchers Hao Liang
and colleagues find that such a long-term perspective is associated with specific languages.
Languages differ in how sharply they distinguish between the present and future. In German, for instance, saying “Tomorrow is cold” is grammatically the same as “Today is cold” (“morgen ist es kalt”), while English and French require speakers to add “will” or a future tense. Research shows that different tenses actually make the future seem farther away — and less important.
Liang and colleagues found that companies with working languages that separate future and present deemphasize future-oriented behaviours, such as corporate social responsibility (CSR) and research (R&D). On average, they engage 7% less in CSR and 40.6% less in R&D. The results are based on a large global sample of firms from 39 countries.
What can a company do if its primary language is one that separates present and future? Find ways to incorporate other languages, say the authors. International sales, subsidiaries, investors and employees can all bring different languages — and perspectives.