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Herausgeber: tredition
Kategorie: Geisteswissenschaft
Sprache: Englisch

Beschreibung

We all live in and with organizations such as companies, project groups, the local authorities, school, associations, churches, political parties and the state. There are many reasons why organizations might not function optimally, most of which however have a common cause: Members begin exploiting their power for their own goals in excess, at the cost of others. Although this is often a known cause in principle, there is a lack of concrete, effective, and practical remedies. Fairness Design offers a systematic solution for it, one that goes to the roots of the issue. Fairness Design enables organization to operate better – for the good of all members – with the establishment of more egalitarian organizational structure, more competition, and more democratic decisions. This paves the way, for example, for good ideas that serve the good of the organization to prevail. Organization members can better develop their skills, are more satisfied, and the organization operates more successfully.

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Seitenzahl: 281

Veröffentlichungsjahr: 2023

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Leseprobe

Book

Author

Dr. Hannes Omasreiter studied computer science with a minor in economics at the Technical University of Munich. He then completed his doctorate in engineering at the University of Stuttgart on an application of artificial intelligence in environmental and traffic engineering. For over 20 years, he has worked in research and development at Mercedes-Benz in the area of software process design.

Fairness-Design

Dr. Hannes Omasreiter

Translation from German: Katharine Oden

The original German edition was published in 2023 under the title "Fairness-Design" by BoD, Hamburg.

Printing and distribution on behalf of the author:

tredition GmbH, Halenreie 40-44, 22359 Hamburg, Deutschland

ISBN

Paperback

978-3-347-90815-4

Hardcover

978-3-347-90816-1

e-Book

978-3-347-90820-8

The work including all its parts is protected by copyright. The author is responsible for the contents. Any usage without his consent is prohibited. Publication and distribution are carried out on behalf of the author, who can be contacted at: tredition GmbH, Abteilung „Impressumservice“, Halenreie 40-44, 22359 Hamburg, Germany.

www.fairnessdesign.de

Cover

Title Page

Part 1: Introduction, Overview, Basic Ideas

Motivation

Fairness and Success

Global and Local Fairness

Principle Paths to More Fairness

Overview: Fairness Design Basic Ideas

Part 2: Fairness Design Basics

Fairness Levels, Fairness Instance

Decision Groups

Decision Monopolies and Radical Fairness

Democratically Legitimized Overall Well-Being Decisions

Fairness Dimensions, Fairness Cross

Systematics and Automation

Overview: Basic Principles of Fairness Engineering and Management

Part 3: Fairness Engineering Principles

Fe Principle 1: Inner Fairness

Fe Principle 2: Fairness Interest

Fe Principle 3: Lobby Defense

Fe Principle 4: Clique Defense

Fe Principle 5: Power Distribution and Liability

Fe Principle 6: Decision Stages and Packages

Fe Principle 7: Equal Opportunity to Participate

Fe Principle 8: Information Quality

Fe Principle 9: Transparent Decision-Making Process

Fe Principle 10: Adequate Distribution of Results

Part 4: Fairness Management Principles

Fm Principle 1: Defining Fairness Goals and Roles

Fm Principle 2: Defining Decision Classes and Patterns

Fm Principle 3: Defining Fairness Engineering Principles

Fm Principle 4: Creating Implementation Incentives and Aids

Fm Principle 5: Establishing Fairness Design Methods

Fm Principle 6: Creating Decision Transparency

Fm Principle 7: Establishing a Fair Process Market

Fm Principle 8: Establishing an Independent Fairness Authority

Fm Principle 9: Implementing Fairness Monitoring

Fm Principle 10: Regularly Improving the Fairness System

Part 5: Fairness Design Methods

Fairness Base Case

Analysis and Objective

Decision-maker analysis

Fairness future perspectives

Fairness risk assessment

Fairness process analysis

Fairness assessment (quick check)

Fairness impediment log

Planning and Implementation

Fairness plan/log

Fairness process competition

Fairness veto

Process description

Decision methods

Feedback and Control

Fairness retrospective

Fairness process review

Fairness test and feedback system

Decision process control

Decision-execution documentation

Support

Fairness training

Fairness framework

Fairness risk management

Fairness-promoting personnel policy

Part 6: Case Studies

Example 1: Bike Company

Example 2: Ideas Competition

Example 3: Tool Selection

Example 4: Method Selection

Part 7: Summary and Outlook

References

List of Figures

FAIRNESS DESIGN

Cover

Title Page

Motivation

Example 4: Method Selection

FAIRNESS DESIGN

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PART 1: INTRODUCTION, OVERVIEW, BASIC IDEAS

Motivation

In both October 2018 and March 2019, Boeing Max 737 aircraft crashed, killing a total of 346 people. Subsequent investigations revealed that company employees had deceived customers and the certification authority about such things as the training requirements for pilots – all with the goal of certifying the aircraft more rapidly and making it cheaper to fly.[1].

In the year 2014, Brazilian Federal Police launched Operation Pressure Washer. The investigations that resulted uncovered one of the largest cases of corruption in history, involving a network of countless companies, managers, businessmen, politicians, and political parties. For example, the oil company Petrobas allegedly awarded contracts to construction companies at inflated prices, causing the company to lose at least two billion dollars. Shares of the construction companies’ additional revenues went to Petrobas employees, politicians, and party coffers.[2].

In a – fictitious – Stockholm software concern, an employee developed a method with which she succeeded in significantly increasing the software quality and satisfaction of the project team without increasing the time needed for development. A team leader in an adjacent department learned of the method, changed it slightly, renamed it, and introduced it as his own idea in his department and subsequently made three new hires of employees who were to implement and propagate this method within the company. The original developer of this method was appreciated in her project team, but received no particular recognition from the organization for her performance.

In a – fictitious – pharmaceutical concern from Porto, a project team needs additional support from a working student. The team found a suitable candidate by hanging flyers at the university. The department head, however, asked the project leader to give the position to her nephew, instead. Although it turned out that he scored significantly lower than the original candidate in terms of qualifications and project team assessment, the project leader decided to hire the department head’s candidate, expecting that to do otherwise would have had a negative impact on his own career.

What do these four brief case studies have in common? While in the first two cases, there were dramatic consequences, in the last two, fictitious examples seem relatively innocuous. There are thus significant differences in the severity of the damage done and the question of whether or not parties acted illegally. Nevertheless, in principle, the same problematic behavior is at play here. And while this course of action is generally recognized as harmful in the two “serious” examples, this is not necessarily the case in the two “harmless” cases. The serious cases were rightly prosecuted, while harmless cases are often given no further attention.

In principle, in all four cases individual (usually few) people or groups of people attempt to gain advantage for themselves, without appropriate performance and at the cost of others (usually many). Individual Boeing managers tries to further their careers or ease their burden of work – among other things at the cost of lives lost. The team leader in the Stockholm software concern also tries to further his career with the least personal effort – among other things at the cost of appropriately acknowledging the method’s original developer. Politicians and managers in Brazil try to finagle a financial boon for one another – among other things at the cost of countless employees of the companies involved. The department head from Porto tries similarly to procure more money for her nephew and therefore her family – among other things at the cost of the appropriate candidate.

To achieve the inappropriate advantages, it is of course always necessary to have the potential – meaning the power – to make them happen. In all the cases described, however, this power is not intended for the described purpose but was used for the wrong purpose, meaning it was misused. The principle underlying all of these cases is ultimately the principle of corruption. According to the definition of “Transparency International,”

Corruption is “the abuse of entrusted power for private gain or advantage.”[3]

From a legal standpoint and probably also in most segments of society, not all of the four cases shown above would be perceived as corruption. Of course, there are great differences in the severity of damage. To take these differences into account, the term “unfair” will be used in the following pages instead of “corrupt,” especially for the more “harmless” cases (meaning those that do not involve illegal activity or at least occupy the legal gray area).

Unfairness within an organization should be defined as “the abuse of power in an organization for personal advantage (and therefore to the disadvantage of the organization).”

This definition therefore essentially corresponds to that of corruption. Corrupt behavior is therefore also unfair behavior, no matter what the context. And although unfair behavior also includes corrupt behavior, in the scope of this book it is also intended to address in particular behavior that would not be classified as corrupt behavior in the sense of the legislator, i.e. that is not illegal/criminal, but is nevertheless problematic for the organization as a whole.

As the opposite to unfairness, the concept of

Fairness within an organization can be defined as “the appropriate use of power in an organization for the overall well-being of the organization.”

Acting fairly therefore of course means, very explicitly, not acting unfairly. However, there is still room to derive personal benefit from an action. On the contrary, it would naturally be unfair not to reward a service that someone provides for the organization. The decisive factor, however, is that the personal advantage that someone derives from his or her performance for the organization remains appropriate., and how this is measured should in turn be determined by the organization as a whole. More detailed explanations on this and also on the essential concept of “overall well-being” will follow later.

While corrupt behavior is usually quite clearly seen as problematic, the same is not necessarily true of unfair behavior. On the contrary, fairness is often interpreted as weakness and unfairness is respected as clever behavior. The truth is, unfairness typically leads to significantly less damage than outright corruption, in individual cases. However, unfair behavior occurs so frequently in virtually all organizations that, in the aggregate, it causes significant damage to a company, an authority or an entire economy, possibly far ex ceeding the damage caused by corruption. If the organization were a cornfield, then corruption could be compared to a vole who eats individual corn plants, killing them. Unfairness, on the other hand, could be compared to an insect infestation that causes only relatively minor damage to an affected plant, but is distributed in large numbers over the entire field and can thus, in total, decimate the crop yield to a much greater extent than the larger vole.

Today, countries and companies use various measures to combat corruption – albeit often to an insufficient degree. In contrast, people do not really regard unfair behavior as an issue in most organizations and therefore don’t typically try to prevent it systematically. Even if an organization seeks to become fairer, it often lacks concrete and practicable methods to achieve this goal.

A few decades ago, the lack of awareness of today’s evident problem with unfair behavior in organizations also extended to corrupt behavior. This is illustrated, for example, by the fact that in Germany, until 2002, bribes were still tax deductible [4] – which is no longer conceivable today. One aim of this text is to promote a comparable development in the area of unfairness. In the future, it should be a self-evident goal for every organization to systematically prevent unfairness within the organization and to systematically promote fairness. This book will explain how such an improvement in fairness can be achieved, namely with the systematics of “Fairness Design” developed by the author.

Fairness and success

Is it really worthwhile for an organization to consider making its employees’ behavior toward each other more fair? There are two answers. The first is that every boss and all employees of an organization should feel a moral obligation to promote fairness within “their” organization. Perceiving this moral obligation and responsibility towards employees, truly a matter of their well-being, should be reason enough to promote fairness. Fairness Design, then, is worthwhile on ethical grounds alone. However, there is a second answer, and it can be an even stronger motivator for many organizational leaders and employees: Fair behavior is worthwhile because more fairness typically results in greater success for an organization, such as better products and services, shorter project timelines, and lower costs, and thus ultimately a higher return on investment. Since most organizations, especially businesses, have economic goals, if only to survive in the marketplace in the long run, this economic argument is also significant. Fairness Design can therefore reconcile ethical and economic interests.

That there is an economic argument, i.e. a positive correlation between fairness and success, can – trivially – already be deduced from the above definition of fairness, which describes it precisely as the use of power for the overall well-being. After all, the overall well-being of an organization is ultimately identical with its success. But this connection also emerges from the economic literature, as the following examples show:

In his book Economics In One Lesson, U.S. economist and journalist Henry Hazlitt [5] explains basic economic principles, just as the name suggests. In doing so, he also makes clear the core of economic action: In his view, economics is essentially about assessing the effect of a planned or existing decision not only with regard to short-term and specific interests (of one group), but in particular with regard to long-term and general interests (of all groups). The better this succeeds, the better economic prosperity succeeds. Thus, an economy is more successful the more it pursues the long-term and general interests of all groups, that is, the more it enhances the common good of that economy. Some economies are living by this word already. In Germany, for example, the Free State of Bavaria has literally enshrined this goal in its constitution: “All economic activity serves the common good” (Art. 151, para. 1). The challenge here is to actually recognize and take into account all – even secondary – consequences of a course of action. If, for example, a government decides to increase the prices of agricultural products through state aid, then this decision initially improves the incomes of the farmers concerned. At the same time, however, the decision also results, for example, in the rest of the population spending more, paying higher taxes, and possibly reducing the competitiveness of farmers relative to those in other states. Thus, according to Hazlitt, the government's task in this case is to weigh all the consequences and act in a way that is best for all groups in the long run. This core idea of Hazlitt’s is essentially the same as the definition of (un)fairness above. In this example, unfair behavior would be present, for example, if the government were to provide subsidies on the basis of lobbying, even though its analysis showed that these would be harmful to the national economy as a whole.

Another publication of interest in this context is Why Nations Fail.[6]. In this book, authors D. Acemoglu and J. Robinson, professors at MIT and Harvard University, respectively, explain why some nations are more economically successful than others. The researchers have studied the development of numerous countries, going far back in history. Their essential conclusion: Unsuccessful economies have “extractive” political and economic institutions. “Extractive” means that a small population group holds power over economic resources, making it highly likely that this group will use its power to increase its wealth at the expense of the population as a whole. Conversely, successful economies have “inclusive” political and economic institutions. “Inclusive” means that economic resources are used for the benefit of all. So, as with Hazlitt, an essential point in these economies is a focus on the common good. Inclusive institutions include democratic elections, personal property rights, equal economic advancement opportunities for all, etc. The authors also note that government that ensures peaceful coexistence is a basic prerequisite for successful states. All other factors, e.g. climate, geography or culture of a country, on the other hand, are only relevant insofar as they influence political and economic institutions. For Acemoglu and Robinson, economic success thus ultimately arises, analogous to Hazlitt and also analogous to the above definition of fairness, when power is used not for the benefit of a few but for the benefit of all.

If one considers a state as an organization, then the publications mentioned indicate that the fairer an organization is, the more successful it is. And it is obvious that this correlation can also be transferred to other organizations, e.g. to companies, authorities and associations. This is because the reasons why more fairness promotes success are the same here as there: If some gain an undue advantage at the expense of everyone else, then the willingness of the disadvantaged to effect the good of all in the organization decreases. Conversely, the incentive to contribute to the good of all increases if all participants in the organization can be confident that their contributions will be recognized in a manner commensurate with their performance.

If, for example, it is possible for everyone in a country to patent an invention and thereby participate in successful implementation of their ideas, then this provides an incentive to think about innovations and thus ultimately promotes the prosperity of the entire state. If there is no such patent right, then inventions are less worthwhile for the individual. This is because an inventor must fear, for example, that someone who has more opportunities to implement the invention will profit from it, but the inventor himself will not. Consequently, there will be less innovation and prosperity in the state.

Analogously, it is also important for the success of a company that employees think about how products, services and processes can be improved or newly developed. For this reason, many companies have a company suggestion scheme that provides employees with an incentive (e.g. a cash bonus) for giving the company useful ideas (if this is not part of their job anyway). Compared to those in a company without such a suggestion scheme, these employees have a greater incentive to think about innovations, which then usually leads to more ideas and innovations, making the company more successful overall.

More fairness in an organization is therefore desirable, but it does not come about on its own. On the contrary: As will be explained in more detail later, passivity toward unfairness promotes its increase. Comparable to fitness training, the promotion of fairness requires regular activity.

Global and local fairness

For an organization, then, success means increasing the well-being of all, and this in turn can be supported by greater fairness. The term general welfare or common good is typically understood to mean the welfare of all members of a state or even all of humanity. Fairness Design, however, looks at any kind of organization, and most particularly on a smaller level, such as a company, a government agency, an association, an individual department, and so on. And Fairness Design has the sole aim of increasing the success of the organizational unit under consideration. Fairness here does not primarily mean the organization’s fairness with respect to “the outside world,” e.g. fair dealings with customers, suppliers, competitors or the environment. Therefore, Fairness Design does not use the term common good, but the term overall well-being (overall good), which, in contrast to the first term, is intended to refer only to the good of all within the organization. The overall well-being of an organization can be thought of as a local common good. Accordingly, a local fairness – which could be expressed as: inner fairness – can be achieved for an organization by Fairness Design. If, on the other hand, a superordinate organization, such as an entire state or the entire world, is considered, we should speak of global fairness (and in this example, the overall well-being then also corresponds to the common good). We can speak of “external fairness” if an organization also acts fairly towards the superordinate organization, e.g. if a team behaves fairly towards the superordinate department.

The following figure is intended to further clarify these concepts.

Figure 1: Local vs. global fairness

The figure shows a schemata for an organizational structure: The superordinate organization “A” could, for example, stand for a continent in which there are the two countries (organizations) “B.1” and “B.2.” In these countries there are again organizations, in this case the two companies “C.1” and “C.2,” or respectively “C.3” and “C.4.” The top level could, for example, also stand for a company that has two departments, which in turn each consist of two teams.

Now, for example, if organization C.2 implements Fairness Design, then this contributes to the overall well-being of C.2 – and thus indirectly possibly also to the overall well-being of A. Nevertheless, C.2 may act in such a way that, while its overall well-being is optimized, the overall well-being of other organizations, such as C.3 and C.4, is reduced as a result. For example, company C.2 might adhere to lower environmental standards in the creation of its products than companies C.3 and C.4, which might put them at a competitive disadvantage to C.2. In order to optimize the overall well-being of the entire organization A, Fairness Design must be implemented at all levels A, B, and C.

Ideally, Fairness Design permeates the entire scope of an organization, including all sub-organizations. However, each sub-organization defines its own specific form of Fairness Design. The result could be termed a fractal fairness structure: If one looks into a (sub-)organization, the shape of the sub-organizations appear, having a fairness structures similar to those of the superordinate structure, and so on. This reiterative fairness structure results from the common fairness design rules in combination with their specific de-sign per sub-organization.

Fairness Design should therefore ideally be applied at all levels of an organization, but it is flexible enough that each sub-organization – within the scope of its powers – can autonomously decide for itself at any time whether and to what extent it wishes to implement Fairness Design. This modular and decentralized concept, which, with the principle of local fairness, also allows individual sub-organizations to (initially) implement Fairness Design on an individual level – regardless of their context – has great advantages over a concept that attempts to achieve global fairness from the outset: Fairness Design provides an organization with its own incentive to become fairer internally, because it gives the organization a competitive advantage. In this way, more fairness can spread step by step, even from the bottom up. A sub-organization does not have to wait for the higher-level organization. Fairness Design thus relies on competition, so to speak, which rewards more fairness and thus ensures that more and more fair organizations prevail in the market until, in the end, ideally all organizations are fair and global fairness is achieved.

By contrast, approaches that aim to achieve global fairness in a more top-down manner from the outset run the risk of experiencing similar difficulties to central governments that try to enforce economic success by planned economic means. This usually only works well in theory because, for one thing, the higher-level organization knows less about the sub-organizations than they do themselves. Here, too, is a danger that the superordinate organization will use its power for its own interests, i.e., it will define the common good incorrectly (especially on its own terms). Moreover, if a local organization wants to be fair to the outside world, it must be able to afford to do so, because such an improvement in fairness can mean a competitive disadvantage, if customers don’t reward it.

If, on the other hand, the superordinate organization implements Fairness Design for itself, then the danger of abuse of power is greatly reduced and then it may well be a sensible option to start fairness improvements “from the top.” In the example above, for example, organization A could ensure that the same environmental standards apply to all sub-organizations, so that company C.2 can no longer pursue lower standards at the expense of C.3 and C.4. However, the top-down requirements should be as low as possible, and suborganizations should ultimately have the say on whether or not to implement Fairness Design, as much as possible. This means that the principle of subsidiarity should apply to Fairness Design. The concept outlines that “institutions should only (but always) intervene in a regulatory way if the possibilities of the individual, a smaller group or lower hierarchical level alone are not sufficient to solve a certain task. In other words, this means that the level of regulatory authority should always be “as low as possible and as high as necessary.”” [7]

Principle paths to more fairness

The question now arises how an organization can become as fair as possible, that is, how an organization can achieve the state where, as much as possible, the actions of those involved within are not skewed to their personal advantage and to the disadvantage of the organization, but rather support the interest of the organization as a whole.

There are four basic approaches for this purpose:

1) Fair individual players

In principle this means that every employee in an organization always acts fairly on his or her own initiative. That would be ideal, but experience shows that it is often not the case. Nevertheless, it is of course sensible to try to select people who are as fair as possible – especially for positions that carry a lot of power. Even if such a selection/assessment of employees is difficult and not without error, the effort usually at least increases fairness.

2) Fairness incentives

Fair behavior can be promoted through incentives. One popular way of doing this in practice is, for example, to make employees’ salaries dependent on the overall success of the company, for example by means of a performance-related bonus or by stipulating fair conduct in an agreement on objectives, which is regularly evaluated by the supervisor and/or employees, for example, and whose evaluation has an influence on further development opportunities or salary. Such incentives can certainly be useful and should indeed be used. However, as with 1), the effect is strongly dependent on the extent to which it is possible to evaluate the fairness of an actor. And this is ultimately, as already mentioned, at least difficult and perhaps impossible to carry out without errors. Incentives at the level of the individual, whether internal or external, do not necessarily prevent employees from behaving unfairly. For example, in a large organization or over a longer period of time, the individual may have a much greater advantage from unfair behavior compared with the relative disadvantage of a low bonus.

3) Fair product competition

In economics, a functioning market that ensures competition for the best products (including services) is considered the guarantor of a successful economy. History has shown with enough examples that this basic principle is correct. One of these examples is the so-called German economic miracle, which is used to describe the rapid and sustained economic rise of the Federal Republic of Germany after the Second World War. A major contributor to this economic success was the policy of social market economy, the ideas of which are described, for example, in the book Prosperity for All [8] by Ludwig Erhard. Perhaps the most important core sentence from this work is: “The most promising means of achieving and securing any prosperity is competition.” This competition should be supplemented, for example, by the support of weaker market participants by stronger ones, so that a social balance (a social market economy) is created. Competition is nevertheless at the center, because it is the driver of prosperity, which then also enables a social balance.

Within organizations, however, such competition is less widespread and in some cases more difficult to establish than at the macroeconomic level. For example, there is often a situation in organizations where there is exactly one department responsible for a particular technical task. In practice this means a company might have exactly one team that takes care of employee travel, e.g., booking and accounting for car mileage, flights and hotel accommodations. The employees are then typically obligated to have all travel handled by this one team, the de facto travel center. This travel center thus has a virtual monopoly on travel services within the company. As a result, the quality and efficiency of travel services could suffer. An employee of the travel center could, for example, make not make more effort than necessary when looking for a good and inexpensive hotel room. He might choose the first appropriate hotel room, even if he might have found a comparable room at a significantly lower price with a little more effort. He would then have acted – in the name of less effort – to the disadvantage of the company, i.e. unfairly. In such a case, the company could possibly increase fairness by, for example, splitting the travel team into two independent, competing teams. The company's employees would then be free to choose, for example, which travel team they would like to deal with, and the performance of the two teams could be compared and rewarded accordingly. Both teams should, of course, have the same conditions to be able to perform (e.g. comparable technical equipment) so that the competition is fair. In this way – referred to here as “fair product competition” (in the example, the travel service is the product) – fairness in the company could therefore be increased. However, such competition also has adverse effects, e.g., costs may increase because duplicate structures are needed, utilization is not optimal, etc. This approach is therefore more suitable for large companies and for rather limited scopes. The example is intended to show that, on the one hand, modern economies – e.g. areas within public authorities, companies, associations – include many areas in which the market principle for products and services is not pronounced, but rather characterized by monopoly structures. While the problem of monopolies is generally recognized at the level of a national economy and addressed – in Germany, for example, by a monopoly commission – the situation is fundamentally different within companies. Here, there are numerous smaller monopoly-like structures – also referred to as micromonopolies in subsequent discussions here. In many cases, however – as mentioned in the above example – it makes no sense to dissolve such micromonopolies by means of market competition, because the additional expense of multiple structures would not be worthwhile. Intra-company competition at the product level is therefore often inefficient due to the size of the company, or simply difficult to implement, such as for example in the case of technically demanding and very specific tasks.

4) Fair decisions

Options 1, 2 and 3 do offer some helpful approaches to increasing fairness in a company – and are also taken into account in Fairness Design. However, they are not sufficient to make an organization truly, fundamentally, consistently, and sustainably fair. The latter is the goal of fairness design, so that both greater and more equitably distributed success can be achieved as a result. To achieve this, a different approach is needed (in addition):

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