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Why Fairness Matters
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‘Make the numbers’ is an over-riding force in many modern companies. But the more managers focus on what they achieve – ‘results’
– the less they worry about how they achieve it. New research shows how and why attention to fair process is key to performance.
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... The creation of Artificial Intelligence (AI) algorithms is often focused on the result without much consideration of the input or bias in the data [1,2,3,4,5]. When not checked before implementation, this tendency has sometimes resulted in embarrassing situations, reputational damage, mistrust, and even financial loss [6,7,8]. The greatest appeal with AI algorithms is the ability to improve itself as more data is added and the ability to be transferred to other similar contexts [5]. ...
... One of the first tasks in defining AI algorithmic fairness is deciding what fairness means. Fairness includes the capability to remain impartial and unbiased when making decisions [9][10][11] and is both a standard and a process [7]. As a standard, fairness defaults to legal principles that govern a society. ...
The traditional emphasis of fairness in AI algorithms tends towards developing fair standards, even though the field of AI and its subfields advance rapidly and creatively, meaning that any AI fair standards could similarly become obsolete rapidly. This paper argues rather for an emphasis on fair processes that are adaptable to AI’s continuous creations and innovations. Specifically, we adapt Jurgen Habermas’ critical theory of communication, the lifeworld and meaning to develop a process framework for AI algorithmic fairness. The framework engages logical-semantic, procedural and performative rules that can be applied to avoid power imbalances and domination by any entity or individual before, during and after AI algorithm development. The framework is applied to the recent case of the biased Twitter image cropping algorithm, which focused on white faces and women’s chests but cropped out black faces.
... Remarkably, no real 'process' was presented in the fair process / procedural justice literature, in the sense of a sequence of steps to be followed to substantiate the notion of process. 2 Recent contributions by Van der Heyden et al (2005) and Van der Heyden and Limberg (2007) have aimed to fill this void by proposing a fair process framework that clearly highlights the steps that need to be followed in order to fully capture the benefits of fair process and avoiding the risks of violating them, with ensuing performance implications. ...
... Remarkably, no real 'process' was presented in the fair process / procedural justice literature, in the sense of a sequence of steps to be followed to substantiate the notion of process. 2 Recent contributions by Van der Heyden et al (2005) and Van der Heyden and Limberg (2007) have aimed to fill this void by proposing a fair process framework that clearly highlights the steps that need to be followed in order to fully capture the benefits of fair process and avoiding the risks of violating them, with ensuing performance implications. 1 Kim and Mauborgne's kick-started the thinking process in the nineties of previous century with a series of articles (Kim and Mauborgne, 1991, 1993. ...
The ‘strategy creation’ process – the process of formulating and implementing strategy – has been under critical study for decades for not delivering the desired results. The discussion on how a strategy process should be run has resulted in a number of ‘strategy schools’.Procedural justice theory is relevant to this discussion. It states that when people impacted by a process consider the process as ‘fair’ they demonstrate a higher level of trust and commitment, and performance increases. This article evaluates the extent to which traditional ‘strategy schools’ comply with the tenets of procedural justice theory and highlight the non-compliance with these tenets for each of these schools. We then propose a new strategy process model which has a greater fair process dimension than any of the more traditional ‘strategy schools’ and as such offers the potential to bring greater effectiveness to the strategy process.
... As fair process generates results (see e.g. Van der Heyden et al. 2007), people having been involved with it will appreciate its outcomes, economic and psychological, and will gain confidence in the approach, turning what is often an anxious threat into fun, and from there on, possibly a passion for taking on problems and solving, pretty much the way accomplished consultants go about things when faced with organizational crises. ...
In an earlier paper (Van der Heyden et al., 2005) we presented the case for the fundamental role that fair process — also referred to in the organizational literature as procedural justice — plays in creating a perception of fairness inside a family business. Interactions in family businesses tend to be more complex than those in non-family firms because these involve at least three influential groups with different needs and interests: family members, shareholders and employees.
When there is a problem in businesses, there are typically three different root causes that together, and interdependently, prepare the ground for the situation: lack of fairness or fair play; bad process; and bad leadership. On the flip side, to have good results, all three of these ingredients are needed. As a consequence, the questions discussed in this practitioner article are as follows: How could a governance and leadership approach look like that leads the textile industry towards a sustainable and successful future in a social and environmental context, and economic reality, so very different from the one we know right now? What are the ingredients? What are the processes? In order to do so, first the ‘Fair Process Leadership’ (FPL) model of governance is reviewed, and then its application to both, top-level strategic decisions in companies as well as to operational decisions such as supply chain partnerships is illustrated. In this way, this paper proposes a different, more conscious as well as conscientious, quality-oriented governance and decision practice, suitable to strategic challenges as well as operational key tasks of the textile industry.
There is a political process to building authentic commitments to strategic directions. Executives must be able to get employees to collectively agree upon both “making” and then “taking” strategic decisions which everyone feels good about. Leaders first determine where on a democratic to autocratic spectrum commitment processes lie within their organization, what is the right mode given the context. Then they can use two approaches to achieve commitments: “Creative Fair Process” and “Mobilization.” Creative Fair Process is more democratic and is about “pulling in” people in order to reach a decision. It is best implemented when there is relatively more ambiguity about a strategic direction and leaders need to keep the process as open as possible, without dragging the organization further behind the pace of industry. In contrast, mobilization is a more top-heavy method, pushing but also selling a direction, and more appropriate when a strategic direction is more or less “clear.” Key to both is the ability to move seamlessly between the foreground and the background in leadership work.
In this chapter, we consider the relationship between effective leadership, communication, innovation and creativity within organizations and teams. In a dynamic business world where innovation is a critical driver for competiveness and growth, we argue that closing the gap between ineffective and effective leadership and communication approaches matters. To assist, we provide two interrelated “tools” that can improve effective leadership communication practices at every stage of the innovation cycle—from ideation through to implementation. These lead to clear, open and compelling communication interactions that underpin innovation and engagement at inter and intra—organizational levels. Our focus is on increasing the chances of successful innovation outcomes by using effective leadership and communication approaches, combined with “communication intelligence” and “fair process”.
In this chapter, we consider the relationship between effective leadership, communication, innovation, and creativity within organizations and teams. In a dynamic business world where innovation is a critical driver for competiveness and growth, we argue that closing the gap between ineffective and effective leadership and communication approaches matters. To assist, we provide two interrelated “tools” that can improve effective leadership communication practices at every stage of the innovation cycle—from ideation through to implementation. These lead to clear, open, and compelling communication interactions that underpin innovation and engagement at inter and intra-organizational levels. Our focus is on increasing the chances of successful innovation outcomes by using effective leadership and communication approaches, combined with “communication intelligence” and “fair process” involvement.
The distribution of rewards and resources is a universal phenomenon that occurs in social systems of all sizes, from small groups to whole societies (Parsons, 1951; Parsons, Shils, & Olds, 1951). All groups, organizations, and societies deal with the question of allocating rewards, punishments, and resources. The manner in which a social system deals with these issues has great impact on its effectiveness and on the satisfaction of its members. For these reasons, it is not surprising that social scientists from many disciplines—political scientists, economists, sociologists, and psychologists—have been concerned with the problem of allocation (e.g., Jones & Kaufman, 1974; Leventhal, 1976a; Pondy, 1970).
This paper presents an alternative to the predominant equity theory for studying the concept of fairness in social relationships. According to the equity theory, or merit principle, fairness in social relationships occurs when rewards, punishments, and resources are allocated in proportion to one's input or contributions. The basic problems of this theory are that it employs a unidimensional concept of fairness and that it emphasizes only the fairness of distribution, ignoring the fairness of procedure. In contrast, the alternative to this theory is based on two justice rules, the distributional and the procedural. Distribution rules follow certain criteria: the individual's contributions, his needs, and the equality theory. These criteria are considered relative to the individual's role within the particular setting or social system. A justice judgment sequence estimates the individual's deservingness based on each rule. Final judgments evolve from a rule-combination equation. Preceding the final distribution of reward, a cognitive map of the allocative process is constructed. Fairness is judged in terms of the procedure's consistency, prevention of personal bias, and its representativeness of important subgroups. Opportunities to apply this concept of fairness exist in field studies of censorship, participatory decision making, equal opportunity, and representativeness of social institutions. (KC)
While work in the field of global strategic management has largely focused on defining the content of effective global strategies and on prescribing winning strategic moves for multinationals, this research argues the importance of the process through which global strategies are generated, in particular the perceived procedural justice of that process. Drawing on the theoretical heritage of justice-based research, this study first explored the meaning of procedural justice by an investigation of the specific criteria used by subsidiary top managers to define what they perceive to be a fair process in global strategy-making. Second, the importance of procedural justice was assessed by an examination of its effects on the higher-order attitudes of commitment, trust, and social harmony as well as on the lower-order attitude of outcome satisfaction in subsidiary top management. One of the central conclusions of the research is that the procedural justice of the global strategy generation process indeed affects commitment, trust, and social harmony as well as outcome satisfaction in subsidiary top management, and hence provides a potentially powerful but, as yet, unexplored avenue for mobilizing the multinational's global network of subsidiaries.
Fair Process research has shown that people care not only about outcomes, but also about the process that produces these outcomes. For a decision process to be seen as fair, the people affected must have the opportunity to give input and possibly to influence the decision, and the decision process and rationale must be transparent and clear. Existing research has shown empirically that fair process enhances both employee motivation and performance in execution. However, work to date has not addressed why fair process is so often violated in practice and why, in these instances, the hoped for benefits are not pursued. This paper breaks new ground by analytically examining the subtle trade-offs involved: We develop a model of fair process in a principal agent setting, rooted in psychological preferences for autonomy and fairness. We show that indeed fair process will not always be used, and explain why the hoped for benefits may be insufficient to convince management to use fair process.
Unlike the traditional factors of production--land, labor, and capital--knowledge is a resource that can't be forced out of people. But creating and sharing knowledge is essential to fostering innovation, the key challenge of the knowledge-based economy. To create a climate in which employees volunteer their creativity and expertise, managers need to look beyond the traditional tools at their disposal. They need to build trust. The authors have studied the links between trust, idea sharing, and corporate performance for more than a decade. They have explored the question of why managers of local subsidiaries so often fail to share information with executives at headquarters. They have studied the dynamics of idea sharing in product development teams, joint ventures, supplier partnerships, and corporate transformations. They offer an explanation for why people resist change even when it would benefit them directly. In every case, the decisive factor was what the authors call fair process--fairness in the way a company makes and executes decisions. The elements of fair process are simple: Engage people's input in decisions that directly affect them. Explain why decisions are made the way they are. Make clear what will be expected of employees after the changes are made. Fair process may sound like a soft issue, but it is crucial to building trust and unlocking ideas. Without it, people are apt to withhold their full cooperation and their creativity. The results are costly: ideas that never see daylight and initiatives that are never seized.
Why it is so hard to be fair
- J Brockel
Brockel J (2006) Why it is so hard to be fair. Harvard Business
Review (March) 122-129