Black Box Analytics and Ethical Decision Making

38 Pages Posted: 22 Jan 2019 Last revised: 8 May 2019

See all articles by Michael J Davern

Michael J Davern

The University of Melbourne - Department of Accounting

Pujawati Mariestha (Estha) Gondowijoyo

Queen's University - Smith School of Business

Pamela R. Murphy

Queen's University - Smith School of Business; Queen's University

Date Written: April 30, 2019

Abstract

Using an experiment with participants having management experience, we examine sales target setting decisions using an analytics-based forecasting system in a situation involving an ethical dilemma. Specifically, participants have private information that the forecast significantly underestimates likely sales, making the suggested target easily achievable. We explore the extent to which participants act unethically by not adjusting the sales target upwards. We employ a 2x2 between-subjects design, manipulating forecasting system transparency (opaque vs transparent) and accountability both as a measured continuous variable and with the use of a prompt either before (pre-prompt) or after (post-prompt) the adjustment decision. We find that participants make less ethical decisions when the system is opaque and more ethical decisions when they feel greater accountability. The effect of accountability is greatest when the system is opaque. We also examine reasons provided for less ethical decisions and find that the least ethical participants use more rationalizations than those whose decisions are not as unethical. Our results suggest that organizations should endeavor to make data analytics systems transparent to decision making users. However, when they cannot, they should ensure that decision makers feel accountable for their decisions; for example, with a prompt or decision aid.

Keywords: ethical decision making, IT, machine learning, moral disengagement theory, heuristic and systematic thinking

JEL Classification: M41

Suggested Citation

Davern, Michael J. and Gondowijoyo, Pujawati Mariestha (Estha) and Murphy, Pamela R., Black Box Analytics and Ethical Decision Making (April 30, 2019). 2019 Canadian Academic Accounting Association (CAAA) Annual Conference. Available at SSRN: https://ssrn.com/abstract=3318717 or http://dx.doi.org/10.2139/ssrn.3318717

Michael J. Davern

The University of Melbourne - Department of Accounting ( email )

Victoria
Melbourne, 3010
Australia

Pujawati Mariestha (Estha) Gondowijoyo (Contact Author)

Queen's University - Smith School of Business ( email )

Smith School of Business - Queen's University
Kingston, Ontario K7L3N6
Canada

Pamela R. Murphy

Queen's University - Smith School of Business ( email )

Smith School of Business - Queen's University
143 Union Street
Kingston, Ontario K7L 3N6
Canada

Queen's University ( email )

Kingston, Ontario K7L 3N6
Canada
6135333260 (Phone)

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