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Corporate digital responsibility: the solution to a difficult digital dilemma?

With the kind permission of Jean-Philippe Bonardi, Dean at HEC Lausanne

The introduction of new digital technologies raises some complex and problematic ethical issues for organizations, yet there is no standard approach to tackling these issues. To remedy this situation Benjamin Mueller and his colleagues introduce the concept of Corporate Digital Responsibility and provide a CDR framework to guide executives.

Benjamin Mueller is a professor of in Digital Innovation and Design. His research focuses on how cutting-edge information and communications technologies transform organisations.

In the summer of 2020, a series of antitrust hearings in the US involving some of the world’s leading tech companies, highlighted the double-edged nature of many emerging digital technologies, including artificial intelligence (AI), the Internet of Things (IoT), blockchain and big data. The hearings covered a range of contentious topics, including the regulation of free speech, data privacy and AI bias, emphasising the fact that, as well as offering exceptional opportunities for growth and prosperity, these digital technologies pose significant ethical challenges for business and society. Indeed, as humans weave modern digital technologies so tightly into the fabric of everyday life, enhancing their capabilities with cutting edge technologies, the need for scrutiny and safeguards becomes paramount.

One way for organizations to minimize the ethical risks associated with new digital technologies is to put in place policies that encourage a responsible approach to their development, use and modification. Eventually, these policies may form part of an organization’s broader CSR initiatives. For the moment, though, there is a persuasive case for standalone policies specifically targeted at digital technologies. This is partly because of the unprecedented, largely unconstrained impact of such technologies on society, but also, from a more selfish standpoint, because of the risk of reputational and financial damage associated with the possible misuse of these technologies.

This is an argument made in the paper Corporate Digital Responsibility (published in the Journal of Business Research) which addresses the lack of existing research or standardized guidance on how to deal with such digital dilemmas. Benjamin Mueller and his six co-authors do not stipulate specific corporate digital responsibility (CDR) policies, recognizing that each organization’s approach will depend on its circumstances. They do, however, establish the importance of the concept of CDR and outline a basic framework for CDR (see diagram), providing executives with a logical way of thinking about and discussing the creation of a CDR culture in their own organizations.

While the basic elements of the framework – its stakeholders, the digital technology life-cycle, a CDR culture and important influences – are described briefly below, the paper contains much greater detail on each element, plus a range of examples that ground the concept of CDR in the real word of business.

Constructing a CDR framework

The authors identify four types of stakeholder particularly relevant in the context of developing a CDR initiative: organizations involved in the creation, use or modification of digital technologies and data; individual actors, such as managers, technology designers and data analysts, who create or make use of such technology and data; institutional, governmental, and legal actors, to which the organization developing a CDR initiative is accountable to; and the artificial and technological actors – the nonhuman entities, like software programs, that use technologies such as algorithms, machine learning and AI to make decisions and take actions that have ethical implications.

They also outline four distinctive stages of the digital technology and data life-cycle where CDR issues are likely to arise. The first stage is the creation of technology and data capture from the initial idea for the digital asset (such as an app or digitally enabled product) and its design and development, to its release for use by others, whether employees internally or customers externally. This is followed by the use of digital assets and data for operational purposes and decision making throughout the organization, whether by humans, machines or a mixture of both. A third stage involves the outcomes in terms of both performance and impact from using an organization’s digital assets and includes the broader indirect and unintended effects. While the last stage includes the ongoing monitoring of digital assets, including their refinement, modification and retirement from use.

Perhaps the most important element of the framework, though, is the CDR culture. Using levers such as shared values, specific CDR norms, artifacts and behaviors, the authors argue, it is possible to create an organizational culture that helps people to make digitally responsible decisions and behave in a digitally responsible manner. Shared values, which might relate to concepts such as responsibility and accountability, privacy of information and freedom from discrimination, provide high level principles that enable people to better understand the way that the organization operates. Building on these values, the norms provide the generalized shared values with a specific CDR context, providing guidance on what employees and other relevant stakeholders must do to be digitally responsible. In turn, artifacts are the objects that tangibly demonstrate the organization’s commitment to CDR. Thus an organization’s CDR standards should be evident in its digital assets, as well as visible in its written processes, procedures and guidelines. Employee behaviors, judgements and choices, should also reflect the organization’s specific norms.

So in practice, for example, an organization might have a shared value of “respect for others” which translates into a CDR related norm of “safeguarding the personal data of consumers”. In turn, a product incorporating digital technologies would comply with this norm by incorporating suitable encryption, while a data collection algorithm would be designed to gather the minimum amount of data required for a particular transaction. The product would include clear and transparent policies about the handling and use of consumer data, and provision for user consent. Furthermore, the organization’s commitment to this specific data safeguarding norm would be evident in the drafting of artifacts such as documentation, standard operating procedures and handbooks. Employees would behave in ways that prioritize safeguarding of consumer data, factoring this norm into their decision-making processes and the organization should also allow consumers access to their personal data and the opportunity to update it.

A digitally responsible approach

As the authors note, CDR initiatives will be influenced by a number of internal and external factors. These might include public opinion, often amplified by social media, and the legal framework that the organization is subject to. The industry within which an organization operates is another factor, especially if it is data intensive or heavily reliant on digital technologies. The concerns and expectations of customers in terms of digital responsibility, as well as the reputation that the organization has in connection with its use of digital technologies, are also influential factors.

The world is experiencing a period of unprecedented technological advance, providing organizations with the power to radically change society for the better. But with this power should come responsibility – a commitment to operate in a digitally responsible manner. Given that no widely accepted approaches to CDR currently exist, Mueller and his co-authors have created a CDR framework that if it gains sufficient traction could easily become a global standard, providing the basis, for example, for a CDR index that enables international comparisons as organizations benchmark their progress towards a digitally responsible culture. And it is not just society that benefits; the authors also believe that a commitment to CDR is likely to have a positive impact on both the competiveness and financial performance of an organization.

Related research paper: Lobschat, L., Mueller, B., Eggers, F., Brandimarte, L., Diefenbach, S., Kroschke, M., & Wirtz, J. (2021). Corporate Digital Responsibility.Journal of Business Research, volume 122, pp. 875-888.


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