AI and the Future of Making Management Decisions
Ali Aslan Gümüsay | LMU Munich and Humboldt Institute for Internet and Society
Thomas Bohné | University of Cambridge
Thomas H. Davenport | Babson College
Advances in artificial intelligence (AI) have made the technology increasingly essential for better and faster human decision-making. While AI can serve different purposes in different types of decisions, the most common AI-enabled decisions involve repetitive, tactical, and structured situations. These are also the types of decisions that are most likely to be fully or partially automated. For unstructured and semi-structured decisions, AI serves a more supportive role in informing human decision-makers and is increasingly enabled by generative AI. Although the primary goal of AI is to augment human intelligence rather than replace it, AI can transform the managerial decision-making process by allowing managers to make earlier, simulated, and complementary decisions. Managers should therefore understand all of the ways that AI-enabled decision tools can operate, as well as how to determine when the models they are using are no longer effective and need to be retrained. Organizations should also redesign their key decision processes with these new
capabilities and responsibilities in mind.
The Circular Economy: A Slippery Step on the Path to Sustainability?
Kieren Mayers | INSEAD
Tom Davis | HP (retired)
Luk N. Van Wassenhove | INSEAD
Our dedication to exponential economic growth has caused us to hit our planet’s limits brutally hard. While the circular economy (CE) proposition has fueled vital momentum for change, a growing body of scientists questions its merit and feasibility. Based on this research, we identify seven critical limitations of the circular economy:
- Continual reprocessing eventually degrades materials beyond usefulness.
- Increased recycling does not guarantee reduced consumption.
- Recycling must be optimized to be environmentally viable.
- Reusing, leasing, and sharing can increase consumption.
- Alternatives to owning products are not always better or greener.
- Often, sophisticated strategies that sound appealing have significant economic downsides.
- We cannot regenerate nature by replacing nonrenewable resources with renewable ones.
These are complex issues, and managers should use scientific principles to guide their decisions and actions, scanning for potential errors of logic, being unafraid to ask common-sense questions, and calling on experts when they need detailed analysis. Focusing entirely on managing the end of a product’s life misses the point. We must also address the growing problem of overconsumption. If we exercise greater wisdom, we will build on the momentum of the circular economy and plot a course toward a more sustainable industrial ecology.
Kick-starting an Innovation Ecosystem
Arnoud De Meyer | Singapore Management University
Peter J. Williamson | Judge Business School, University of Cambridge
Business leaders design innovation ecosystems to facilitate innovation in highly uncertain conditions. Scholars have established the value of these ecosystems in countless publications and studies. Usually, however, they have focused on the optimal conditions for a successful ecosystem, or on differentiating business ecosystems from platform companies or supply chains. And while executives have long found the ecosystem an interesting and useful organizational construct, few know how to start an ecosystem, let alone expand an existing one.
We used our findings from eight in-depth case studies to design a simple six-step framework for starting and growing an ecosystem. Executives that follow this framework will learn how to ensure that their ecosystem leader is credible, select the right foundation partners to bring onboard, design an initial roadmap, demonstrate the value of the system to partners thinking of joining, reduce the entry barriers and transaction costs, and select partners who can bring along a sub-ecosystem. They can also learn to scale the ecosystem quickly by having a clear architecture, avoiding encroachment on partners’ activities, and creating incentives for partners to invest.
Strategic Management of Corporate Political Activism
Vikas Mittal | Jones Graduate School of Business, Rice University
Jihye Jung | Alvarez College of Business, University of Texas at San Antonio
According to recent media accounts, businesses are increasingly engaging in corporate political activism (CPA), actions in support of a given side of politically charged issues. Evidence from peer-reviewed research, however, shows that CPA does not help companies. In fact, it can harm them in several ways, damaging their brand equity, employee productivity, and financial performance as well as alienating some customers. We have developed a strategic framework that business executives can use to assess where their company stands in its CPA journey and determine its path forward. This framework is built upon four strategies: convergence, divergence, selective engagement, and apolitical support. Company leaders can use this framework to evaluate whether and how they should engage in activism and to find ways to shape their political strategy over time.
The Rise of the Standing Neutral: An Easy, Economical, and Effective Way to Prevent Contractual Conflicts
Kate Vitasek | University of Tennessee Knoxville
Daniel Bumblauskas | Missouri Western State University
Jim Groton | Eversheds Sutherland (Retired)
Yu (Jade) Chu | University of Northern Iowa
When it comes to contractual relationships, problems and unexpected events come with the territory. Long-term contractual relationships are especially vulnerable to friction, particularly when a disagreement turns into a formal dispute. Often, by the time a mediator or arbitrator gets involved, the contracting parties have already incurred significant frustration and expense, or even worse, have reached a breaking point and irreparably damaged the relationship. A standing neutral is an innovative new methodology that helps contracting parties to efficiently work through issues before they develop into formal disputes. This is achieved by placing a trusted, independent, expert advisor in the governance structure of the contract. The expert supports the parties with suggestions to prevent conflict throughout the contractual relationship. A classic standing neutral process can best be described as quick, informal, adaptable, non-adversarial, neutral, and preferably nonbinding. Its goal is to prevent, or achieve the earliest possible solutions to, problems and potential disputes. The concept is most used in the construction industry but has also been effectively applied in many other industries.