February 14, 2020
Meaning of Life and Purpose of Business Analyzed in Study of Machine Automation
The emergence of automation in business practices holds the potential to simplify complex processes, streamline production, and reduce labor costs. Yet there remains an active debate concerning how automation could potentially limit employment opportunities, leading to a technological unemployment crisis. A new paper explores how the loss of human labor opportunities in the forthcoming new machine age may result in an entirely different crisis: a pervasive feeling of loss among those who have lost opportunities to robots. Additionally, the paper proposes an alternative organizational structure based on the ancient Greek concept of agora that could be used to fill this gap for some members of society.
The study, by researchers at Carnegie Mellon University (CMU), appears in the Journal of Business Ethics.
“The goal of business in a broad sense is to make life better for people. We do this in many ways, and have a long history of doing so, but what happens when a huge proportion of people lose access to employment?” says Alan Scheller-Wolf, Richard M. Cyert Professor of Operations Management and Senior Associate Dean of Faculty and Research at CMU’s Tepper School of Business, who coauthored the study. “For people whose work provides a source of fulfillment, pride, accomplishment, and camaraderie that cannot easily be replaced, taking this opportunity away from them could be very costly from a human welfare and fulfillment perspective. We look at the responsibility companies may have if they do this.”
The role of the machine in business is rapidly evolving, and it is still unknown whether workers and machines will enjoy a corresponding relationship or if machines will emerge as dominant in the workplace, greatly diminishing, if not essentially extinguishing, the role of workers. Textile workers were replaced by simple machines during the Industrial Revolution, many farm jobs became obsolete after the invention of tractors, and typists haven’t been employed since the advent of the personal computer. And this trend is expected to continue: current automation devices used by workplaces include driverless cargo trucks, artificially intelligent mortgage approvals, machine learning-based paralegals, and algorithmic managers.
In this paper, researchers propose that business managers should proactively consider what kind of automation processes they are willing to implement as well as how to address two potential challenges that automation might pose.
The first potential challenge, deemed the axiological challenge by researchers, suggests that life could become void of meaning if humans are excluded from employment opportunities due to the implementation of machines. Even in a future where a universal basic income is guaranteed, society must consider what is lost when the empowering role of work opportunity is greatly reduced. Additionally, who gets to decide which roles in life are objectively worthwhile?
If realized, the axiological challenge then leads to a second challenge, which researchers termed the teleological challenge. This second challenge refers to the broad purpose of corporate governance. The researchers argue that both the Shareholder-Wealth Maximization model, which posits that businesses primarily exist to generate wealth for their owners, and the traditional Stakeholder Theory, which argues that businesses must balance or coordinate the interests of different parties—investors, employees, customers, people in the community, etc.—are insufficient to address the technological unemployment crisis.
The paper suggests that unless business leaders are intentional about considering and addressing the purpose of business for future society, said businesses could be contributors to a societal ethical crisis. Though it is difficult to predict which jobs will be replaced by automation, it is possible to determine an appropriate premise for why a job should or should not be automated if it is ever possible.
Finally, the researchers propose a solution in the form of encouraging firms to embrace a new type of stakeholder, one that is neither worker nor community. By reflecting on the principles of ancient Greek society, the researchers believe that meaning can be found through the collective deliberation for the common good. That is, businesses should cultivate communities comprised of individuals who are empowered to determine how a company or brand can contribute to the common good, potentially filling a life-meaning void caused by machine automation. Additionally, this could provide a unique value to the companies: a community of loyal “fans” who support the brand.
“When my father retired from his job, he experienced a meaning crisis,” says Tae Wan Kim, Associate Professor of Business Ethics at the Tepper School, another coauthor. “Money was not a problem—money alone doesn’t give life meaning. In today’s society, people experience many other important benefits from work: community, dignity, intellectual stimulation, character development, etc. It’s possible that the fourth industrial revolution is an era during which many people become like my father. If we want to address this problem, we should ask the question, ‘Why do we as a society allow corporations to exist?’ What’s their purpose?”
Summarized from an article in the Journal of Business Ethics, Technological Unemployment, Meaning in Life, Purpose of Business, and the Future of Stakeholders by Scheller-Wolf, Alan (Carnegie Mellon University) and Kim, Tae Wan (Carnegie Mellon University). Copyright 2019. All rights reserved.