Causal Machine Learning and Business Decision Making

Abstract

Causal knowledge is critical for strategic and organizational decision-making. By contrast, standard machine learning approaches remain purely correlational and prediction-based, confining them to analytical insights that can only partly address a wide variety of managerial decision problems. Taking a mixed-methods approach, which relies on multiple sources, including semi-structured interviews with data scientists and senior decision-makers, as well as quantitative survey data, this study argues that causality is a critical boundary condition for the application of machine learning in a business analytical context. It highlights the crucial role of theory in causal inference and offers a new perspective on human-machine interaction for data-augmented decision-making.

Keywords: Organizational Decision-making, Data Science, Causality, Machine Learning, Theory-based View

JEL Classification: C01, C45, D80, M21