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CSR, Sustainability, Ethics & Governance Series Editors: Samuel O. Idowu · René Schmidpeter René Schmidpeter Reinhard Altenburger Editors Responsible Artificial Intelligence Challenges for Sustainable Management CSR, Sustainability, Ethics & Governance SeriesEditors SamuelO.Idowu,LondonMetropolitanUniversity,CalcuttaHouse,London,UK RenéSchmidpeter,BernUniversityofAppliedSciences(BFH),Bern,Switzerland Inrecentyearsthediscussionconcerningtherelationbetweenbusinessandsociety has made immense strides. This has in turn led to a broad academic and practical discussion on innovative management concepts, such as Corporate Social Respon- sibility,CorporateGovernanceandSustainabilityManagement.Thisseriesoffersa comprehensive overview of the latest theoretical and empirical research and pro- vides sound concepts for sustainable business strategies. In order to do so, it combines the insights of leading researchers and thinkers in the fields of manage- menttheoryandthesocialsciences–andfromallovertheworld,thuscontributing totheinterdisciplinaryandinterculturaldiscussionontheroleofbusinessinsociety. Theunderlyingintentionofthisseriesistohelpsolvetheworld’smostchallenging problems by developing new management concepts that create value for business andsocietyalike.Inordertosupportthosemanagers,researchersandstudentswho are pursuing sustainable business approaches for our common future, the series offersthemaccesstocutting-edgemanagementapproaches. *** CSR,Sustainability,Ethics&GovernanceisacceptedbytheNorwegianRegister for Scientific Journals, Series and Publishers, maintained and operated by the Norwegian Social Science Data Services (NSD). It is also Abstracted and indexed inResearchPapersinEconomics(RePEc)/Scopus (cid:129) René Schmidpeter Reinhard Altenburger Editors fi Responsible Arti cial Intelligence Challenges for Sustainable Management Editors RenéSchmidpeter ReinhardAltenburger BernUniversityofAppliedSciences(BFH) DepartmentBusiness Bern,Switzerland IMCUniversityofAppliedSciencesKrems Krems,Austria ISSN2196-7075 ISSN2196-7083 (electronic) CSR,Sustainability,Ethics&Governance ISBN978-3-031-09244-2 ISBN978-3-031-09245-9 (eBook) https://doi.org/10.1007/978-3-031-09245-9 ©TheEditor(s)(ifapplicable)andTheAuthor(s),underexclusivelicensetoSpringerNatureSwitzerland AG2023 Chapter“ExploringAIwithpurpose”islicensedunderthetermsoftheCreativeCommonsAttribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/). For further details see license informationinthechapter. 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ThisSpringerimprintispublishedbytheregisteredcompanySpringerNatureSwitzerlandAG Theregisteredcompanyaddressis:Gewerbestrasse11,6330Cham,Switzerland Foreword Withitscontributions,thisbooktakesusintotheworldoftheGreatTransformations thathaveoccurredhistoricallyinthepast1000years.Therehavebeenthreeofthem andwearenowexperiencingthe“FourthGreatTransformation.” Itisthetransformationintotheworldofcomplexity.Itisdrivenbythetechnically possiblenetworkingofeverythingwitheverything.Withitthegreatandseemingly eternalcoordinatorsofmankindbecomemeaningless,namelytimeandspace.These will continue to exist, but they will lose their previous significance. Because one must travel no more to China or elsewhere, in order to become effective there. A shorttapwiththelittlefingerontheEnterkeyissufficientforthis. Artificial and Natural Intelligence Are Converging Thematerialsfornaturalandartificialintelligencearedifferent,buttheirfunctional lawsandtheirresultsarebecomingincreasinglysimilar.Thisisbecausetheyfollow two laws of nature: the law of networking itself, and the law of simultaneity, as itstwin. Thementionedfourthtransformationbeginsinthetwentiethcenturywiththeend of the Second World War in 1945, with the discoveries and beginning of a completelynewkindofscience-cybernetics.Itiscloselyconnectedwithinforma- tion and communication theory. Its founder is the English mathematician Alan Turing,whoisconsideredthefatherofthecomputer.Hegavethename“Enigma” tohisfamousdecipheringmachine. v vi Foreword Today’s Cybernetics Goes Far beyond this Itisthescienceofself-regulating,self-directing,andself-organizingsystems-aswe naturallyencounterthemeverywhereinnature.Organismsregulatethemselves,just asecologicalsystemsregulatethemselves,andtheydosointelligently,providedwe donotinterferewiththeirfunctioninginadysfunctionalway. Asearlyas1948,abookbythemathematicianNorbertWienerwaspublished.Its titleisCybernetics.Andthesubtitle,ControlandCommunicationintheAnimaland theMachine.Today,Iwouldchangethetitleslightlyto“ControlbyCommunication ....” Artificial intelligence and its basic science, cybernetics, are the “parents” of digitization and modern communication, control, and guidance sciences. Like all sciences,thesecanbeappliedsensiblyorcriminally.Thefactthatthecriminalside oftendominatesinthemediacannotbeblamedoncybernetics,butisduetothestill widespreadlackofknowledgeaboutcybernetics. As early as 1957, the company Digital Equipment was founded in the USA, Microsoft came into being in 1975 and Apple in 1976. But it was to take another 30yearsuntilthefirstiPhonecameontothemarketin2008. Two New Laws of Nature for the Great Transformation21 Thelawofnetworkingitselfand-closelyrelatedtoit-thelawofsimultaneityare thedrivingnaturalforcesoftoday’sGreatTransformation21. Ifweproperlyunderstandartificialintelligenceandtheharnessingofcomplexity that it enables, then entirely new opportunities will open up for the design of its applicationinalmostallscientificdisciplines,forexampleinmedicine,engineering, thedesignandfunctioningoforganizations,publicadministration,andthesciences themselves. Wecanthenalsonavigateintheunknowninawholenewway.Navigatingisthe artofthehelmsman.Inthesimplecase,navigatingmeansdeterminingthelocation, settingthedestination,andsteeringthewaythere,largelyindependentofthecausal forcesthatpushusofftherightpath.Thehigherformofnavigatingistheabilityto findourwayintheunknown-whenlocationsareuncertain,destinationsaremoving, and paths are convoluted. Another name for these functions is management in the twenty-firstcentury. Foreword vii Complexity Is Not Complication Thetwoareoftenconfused.Complexityisthemostimportantnew,immaterial“raw material,”whichisthebasisofnaturalandalsoartificialintelligence,ofcontroland regulation,andofinnovationandevolution. Withitnewsystemandecosystemtypeswithself-capabilitiesemerge,asnatural organisms have them, namely self-control, self-regulation, self-steering, and self- organization,soinshortintelligencewhichwecanthustransferfromtheorganisms totheorganizationsofoursocieties. Complexity is the most important new raw material for intelligence and for information, and these are more important than time, space, and energy, which we have known for a long time. The proper use of complexity is becoming a core competencyoftheartificialintelligenceoffunctioningorganizations.Wecanuseit to step outside the constraints of natural organisms. Artificial intelligence and corporate social responsibility are the key intangible raw materials for the self- capabilitiesofnewsystemandecosystemtypes. Corporatesocialresponsibilityandultimatelyallorganizationsinsocietydepend ontheintelligentuseofcomplexity. St.Gallen,Switzerland FredmundMalik 21March2022 Contents ArtificialIntelligence:ManagementChallengesandResponsibility. . . . 1 ReinhardAltenburger 1 ChallengesandProspectsofArtificialIntelligence. . . . . . . . . . . . . . . . 2 2 TheImpactonManagerialDecision-Making. . .. . . . .. . . .. . . .. . . .. 3 3 ImpactofAIonCorporateStrategyandOrganization. . . . . . . . . . . . . . 4 4 ManagementResponsibilityandEthicalImplications. . . . . . . . . . . . . . 6 References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 ArtificialIntelligence:CompaniontoaNewHuman“Measure”?. . . . . . 9 RenéSchmidpeterandChristopheFunk 1 ArtificialIntelligenceChangesOurSocietyandEconomy. . . . . . . . . . . 9 2 CriticalDiscussionsRequireNewPerspectives. . . . . . . . . . . . . . . . . . . 10 3 OpportunitiesofArtificialIntelligenceinaSustainable Transformation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 4 FurtherDevelopmentofCorporateSocialResponsibility. . . . . . . . . . . . 12 5 VisionaryEntrepreneursRelyonAIBusinessModelswithPositive Impact. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 AIGovernanceforaProsperousFuture. . . . . . . . . . . . . . . . . . . . . . . . . 17 AlexanderVocelka 1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 2 ArtificialIntelligenceIstheQuintessenceoftheFourthIndustrial Revolution. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 2.1 FromIntelligencetoProductivity. . . . . . . . . . . . . . . . . . . . . . . . 20 2.2 TheValueofAI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 2.3 AIWorkingforUs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 3 UtopiaorDystopia:WhereThereIsLight,ThereIsalsoShadow. . . . . . 25 3.1 HowtoGuidetheEmergenceofAI. . . . . . . . . . . . . . . . . . . . . . 28 3.2 CSRasBeneficialAIFacilitator. . . . . . . . . . . . . . . . . . . . . . . . 29 ix x Contents 4 AllAIIsNottheSame. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 4.1 FromEdgeAItoGeneralAI. . . . . . . . . . . . . . . . . . . . . . . . . . . 30 4.2 TheAIProductivityvs.ComplexityParadox. . . . . . . . . . . . . . . 34 5 ApplicationandCSRChallengesofAIinCompanies. . . . . . . . . . . . . . 35 5.1 AIParalysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 5.2 AIAction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 5.3 CorporateAIHierarchies. . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 38 5.4 AIRolesintheOrganization. . . . . . . . . . . . . . . . . . . . . . . . . . . 39 5.5 FromWorkertoTrainerandCoach. . . . . . . . . . . . . . . . . . . . . . 41 5.6 AICollaboration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 5.7 CyberRisksforCyberOrganisms. . . . . . . . . . . . . . . . . . . . . . . 45 6 ExpandingtheCSRModel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 6.1 ClassicPyramidalCSRModels. . . . . . . . . . . . . . . . . . . . . . . . . 45 6.2 ExpandingtheCSRModel. . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 6.3 ASystemicCSRModel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 6.4 CulturalFlavoursofCSR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 6.5 GlobalDifferencesinAIPerception. . . . . . . . . . . . . . . . . . . . . . 50 6.6 NoUnifiedGlobalCSR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 7 TheDigitalGovernanceFramework. . . . . . . . . . . . . . . . . . . . . . . . . . . 53 8 EmbeddingAIGovernanceintheCSRModel. . . . . . . . . . . . . . . . . . . 55 8.1 DigitalandAIGovernance:StructureandTransparency. . . . . .. 56 8.2 DataGovernance:ForGoodAI. . . . . . . . . . . . . . . . . . . . . . . . . 56 8.3 TrustedAI:ThroughTransparency.. . . .. . . .. . . . .. . . .. . . .. 57 8.4 EthicalAIs:LietoBeLoved. . . . . . . . . . . . . . . . . . . . . . . . . . . 59 9 AIGovernance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 9.1 AILifetimeCare. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 9.2 AIDecisionGovernance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 9.3 AIRiskControl. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 9.4 DealingwithCorruptedAI. . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 9.5 Asimov’sLawsRevisited. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 9.6 ControllingAIsThroughSoftwareRules. . . . . . . . . . . . . . . . . . 74 9.7 AICybersecurity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 10 ArtificialIntelligenceintheLegalContext. . . . . . . . . . . . . . . . . . . . . . 76 10.1 OwnershipObliges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 10.2 Introductionofan‘ElectronicPerson’asanOpportunity. . . . . . . 78 10.3 AccountabilityofElectronicPersons:DeathandTaxes. . . . . . . . 79 10.4 LimitstoAILiability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 11 CSRasAIChangeEnabler. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 11.1 CycleofAIAcceptance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 12 Outlook. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 12.1 TheGreatResignation. . .. . . . .. . . . . .. . . . . .. . . . .. . . . . .. 85 12.2 AItotheFore. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 12.3 AIasaCompanion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 12.4 ClosertoAI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 12.5 CSR’sRolewithAI..... ....... ....... ...... ....... . 88