Towards an Ethical Business Model with Artificial Intelligence

Sammanfattning: Purpose: The purpose of this thesis is twofold. With a stakeholder perspective, the paper has the ambition of understanding why firms decide to invest in ethics. In this sense, we look at such investments both through the lens of mitigating downside risks as well as the lens of creating competitive advantage and shared value. In the light of ethical investments, the paper also has the purpose of explaining how artificial intelligence (AI) can be leveraged to monitor and control ethical behaviour among suppliers. Effectively, the level of AI, its role in the organization as well as the benefits that may be derived from it are examined as the second subject of the paper. Methodology: The paper is built on a single case study conducted at the Swedish housing company BoKlok, where the empirical material is gathered through various data sources. Theoretical perspectives: The paper has applied several different theoretical perspectives to answer the purposes. Firstly, Cassimon, Engelen and Liedekerke’s (2016) theory of why firms will invest in CSR have been used to answer the papers first purpose. Since Cassimon, Engelen & Liedekerke (2016) utilize a stakeholder perspective, Mitchell, Agle and Wood’s (1997) stakeholder theory have be used as a complement. To describe how investments in ethics may constitute a competitive advantage, Porter and Kramer’s (2011) creating shared value was added to reach a comprehensive framework for the first purpose. Secondly, Huang and Rust’s (2018) four level of AI framework have created the main theory to describe how the AI works and its role in the organization. A literature review complements Huang and Rust (2018) regarding the benefits that could be expected to entail from AI. Lastly, Lewis’ (2003) control mechanisms are also utilized to explain the AI’s preventive and in-process and recovery controls. Empirical foundation: The empirical foundation is grounded in Yin’s (2009) six sources. The main source of data derives from the 10 semi-structured interviews with respondents at the firm, which is accompanied with both internal and external organizational documents and different artefacts collected during our visitation at the company’s office in Malmö. Conclusion: The paper finds that investments in ethics constitute both a way of mitigating downside risk and creating a competitive advantage. The main stakeholders that have driven the case company to invest in ethics are private customers, employees and the owners. Furthermore, the AI merely meets the characteristics of the lowest level of intelligence and it generates cost reductions and increased efficiency, quality processes and regulatory compliance. The AI is also set up to have traces of both preventive and in-process control mechanisms.