Goizueta Effect - Big Data and the Future of Privacy

Big Data and the Future of Privacy

06/25/20 • 19 min

Commercial uses of personal data
The goal of marketers is to better understand their audience so they can offer the products and services that people are going to be interested in. That requires learning about the customer. Marketers used to rely on demographic information. They knew customers’ zip codes and could get census-tracked information and would rely on customer surveys. A lot of that information was gathered or being directly elicited from consumers themselves. That's not necessary anymore. Today, marketers learn what people are interested in by seeing what they’re posting on social media. People talk about brands they’ve bought and post photos with products in them. They interact with brands on social media. They also express opinions about brands and share experiences with them. For example, if someone posts online about a horrible customer service experience with their cell phone provider, that's a signal to other cell phone providers that this might be someone they can potentially poach. People provide signals of the strength of the relationship they have with brands and those conversations are potentially observable by other brands. This isn’t not necessarily just useful for competitors. If someone reports having a great experience at a retailer or reports they saw great show at a theater, that's information that those venues and brands can use to determine that someone has a good relationship with them and they should keep that in mind for subsequent interactions.

The gathering of personal data is widespread. Everyday actions taken on cell phones and computers share data; people share data through apps when they just carry their cell phones around over the course of the day. When people search for something on Google, listen to Spotify, or watch something on Netflix they leave digital traces behind. Some of those are proprietary, such as what people watch on Netflix, and others can be captured by a broader range of firms. For example, mobile location data from cell phones, is packaged, aggregated, and resold to brands and organizations.
Data isn’t just for commercial use
In the current pandemic, Google and Apple are collaborating on ways to use mobile location data to do contact tracing, and software developers all over the world are developing contact tracing apps that will run in the background on phones. That will provide the public health community a with great weapon to combat pandemic situations going forward. Social media activity can provide insights into whether people are in the midst of a potential mental health crisis, based on what they're posting online and the type of language they use. This does raise questions about where responsibility lies if a social media platform, such as Facebook, uses this information to determine what ads to show people and whether they should intervene if it seems someone is experiencing depression.
The trade-off with privacy
On the one hand, we value privacy, on the other, we value the convenience and features of our internet and mobile-driven lives. This balance is addressed in a book on surveillance capitalism by historian Shoshana Zuboff that provides insight into how we ended up where we are today. One factor was that the dot com boom, when a lot of today's behemoth companies like Google were in their growth stages, happened in the wake of 911. Zuboff argues that there was a shift in mentality that you could attribute to that event. Before 911 people believed that privacy was essential and could not be infringed upon; after 911, the mentality shifted to believing that we couldn’t allow something like that to ever happen again, even if it meant sacrificing some of our values with respect to privacy. The TV show Person of Interest takes that perspective. The premise is built on the government building a massive surveillance system In the wake of 911. It’s interesting to explore the ramifications being under surveillance 24/7 and whether that’s a society that we want to be a part of. Now companies are collecting as much data as possible and thinking about how they can turn it into something useful. In return, many tech companies have developed many tools whose usefulness may outweigh privacy concerns, such as Google search engines, Gmail, recommendation engines for shopping, and predictive text for messaging and email communications -- all of which require data collection. A New York Times article examined location data and the question of how it needs to be regulated because of how personally identifiable and sensitive the information is. Now that we’re going through a pan...

Previous Episode

Conscious Capitalism

Terminology
“Conscious capitalism” describes companies and organizations that have purpose behind the work that they do that goes beyond the core product or services that their organization delivers to have a broader, more positive impact on society at large.
Examples
Early examples are Ben & Jerry's Ice Cream and TOMS Shoes, but it is not just the province of small start-ups. The Coca-Cola Company has an initiative around women and water that is examining how the company can mitigate the impact of its product requiring so much water, including on the communities from which that water is being taken. The founder of Whole Foods, John Mackey, is also one of the founders of the conscious capitalism movement.
Increased Relevance
Increasing generations of younger people are passionate about being part of organizations that have a meaningful purpose beyond business and profits and as they get into higher education and the workforce, they are articulating the expectations they have of the organizations where they'll be working. In addition, senior leaders in some well-established companies are seeing the need to change the way have done business because it may have a negative effect on the environment or other things pertinent to quality of life.
Business Roundtable
In 2019, the Business Roundtable issued a statement related to conscious capitalism which signaled broader support for the concept. Increasingly, political matters are also contributing to a sense of the importance of this work. It is likely that many companies will begin to see positive financial gain by investing and doing work in this manner.
Higher Education
Students entering business schools now have a clear preference and expectation that they will learn about business and industry in a manner consistent with what matters to them. The fundamental areas of finance, accounting, marketing, leadership, information systems, and operations continue but now with an overlay of how to think about each of those fundamental domains in a way that takes into consideration a much more conscious approach to how business is done.
More institutions of higher education are trying to create opportunities for their students to be grounded in real-world issues and challenges, and to engage in the community in ways that they had not, historically.
Gift to the Goizueta Business School
The Goizueta Business School recently received a $30 million gift from The Goizueta Foundation which will allow the school to experiment with new ways to deliver online education so it can encompass experiential learning that involves students interacting with people in communities facing real-world challenges to engage in problem solving.

The Future
The world is much more globally intertwined, so we fundamentally have to think about how we do business differently. Conscious capitalism, 10 or 20 years from now, may look different than today, but the underlying assumption associated with it, having a purpose beyond just profit, will continue for quite some time.
Companies are starting to move towards a greater understanding of corporate social responsibility activities and are asking how to move those activities from being tangential to the core of the business to being seamlessly integrated into the business. This is where scholarship from business school faculty can play a role: understanding how to measure some of the activities and work going on in companies and how companies can align their core processes with the aspects of conscious capitalism. We will likely see more intersectionality of the conscious capitalism efforts with the core efforts of the business.
The Goizueta Business School is well-positioned to be a leader in some of this work. For more than a decade, the faculty have been invested in laying the groundwork for some of the curriculum we now offer, and some of their research and scholarship puts us ahead of many of our competitors. The additional financial support will allow for ramping up manifestation of this work in powerful and impo...

Next Episode

How a Recession Changes Our Behavior

In more individualistic societies, such as the United States, there is an emphasis on standing out from others, being different, and expressing one's uniqueness. In more interdependent or collectivistic societies, there's an emphasis on not standing out, on being part of a group, on attuning to the needs and interests and goals of the group, and on ensuring that the group is successful. Individualism is a core part of identity in the United States and that has increased over time. Over time, Americans have become increasingly individualistic and currently, the United States typically scores higher on individualism than any other country.

Associate Professor of Organization & Management Dr. Emily Bianchi's research into whether people become less individualistic in times economic hardship, reveals that when the economy is worse, people are more likely to embrace interdependence and collectivism. Examples include parents giving children more common names and articulating that they wanted their children to exhibit such behaviors as helping and getting along with other people, over being independent and standing out from others. Her research also revealed that during bad economic times, American music is less individualistic and more collective, as exemplified by more songs that had more first-person plural pronouns (we, us, ours) than singular first-person pronouns (I, me, mine).

In short, in better economic times, Americans, seem to be more self-focused and during worse economic times, they are more interdependent.

Interdependent behaviors and attitudes have limits and can result in derogation of others

Even when people are more interdependent or collectivistic, they are not more interdependent towards everyone in society. People are typically more interdependent towards people who are similar to them or are in their in-group. That often is associated with greater derogation of dissimilar others. In societies that are very collectivistic or very interdependent, there is often a great deal of wariness of outsiders.

Interdependence – leaning on and taking from other people – is one way people manage uncertainty, including economic and financial uncertainty. Another way is to look for perceptual order, which can involve seeing things in rigid terms, such as being more likely to see people who are not very different from them as being “other.”

Racism can be greater during difficult economic times

In examining state economies, Dr. Bianchi and her colleagues found that in states hit hardest by the Great Recession, there was a greater spike in Whites' negative attitudes towards Blacks. In states that were less hard hit, there wasn't as much of a change.

Racial wage gaps increase during recessions, making diversity efforts crucial

Dr. Bianchi has also conducted research that revealed that the racial wage gap increases during recessions, regardless of industry, education level, age, and other factors. Moreover, African American employees are more likely than White employees to be fired during a recession and take a greater hit in salary when they are hired or rehired. She concludes that its crucial for businesses to maintain their diversity efforts in recessions and other difficult economic times.