MIT Sloan Management Review

BUSINESS DOESN’T OPERATE IN A vacuum. Sometimes external conditions exert a much larger force than usual. That is certainly the case today, with political and environmental change, economic uncertainty, regional conflicts, and population displacement happening around the world. As I write this, it’s just a few months before a highly consequential U.S. presidential election. A newsletter recently landed in my inbox that claimed to offer “everything leaders need to know about creating guidelines around political discourse at work, encouraging civic engagement, and combating election stress in your workforce.” The variety of tools it listed for putting ideas into action included templates, discussion guides, checklists, and the like. “Election stress” seems like a strange thing for business leaders and managers to worry about, but it makes sense in a time of…

Since the public rollout of ChatGPT nearly two years ago, the transformative potential of generative AI has been widely discussed. But so far, actual transformation has been slow and uneven. Researchers at Goldman Sachs have been tracking the adoption of artificial intelligence by various industries. Joseph Briggs and Devesh Kodnani found that although companies’ investments in AI have soared, as of June 2024, only 5% of U.S. businesses report using AI to produce goods or services. Adoption has understandably varied widely across industries. The effects of AI on the labor market have so far been muted. The researchers found that the unemployment rate for what they deem to be “AI-exposed jobs” has generally tracked the broader labor market (see “The Unemployment Rate for AI-Exposed Jobs Versus All Jobs”), and AI…

What appeals to you more: a pair of jeans on sale for 8% off, or the same pair listed for 7.7% off? Any rational shopper will know that the 8% discount will save them more money and is the more attractive deal. And any sensible retailer will recognize not only that offering a higher discount will appeal to more shoppers but also that listing a more precise discount with a decimal place makes for a less attractive sign than a nice, round number does. But are things ever that simple? A paper published in the Journal of Consumer Psychology describes a series of experiments in which the authors studied how consumers perceive discounts and why. Their counterintuitive finding is that customers perceive more precise discount figures as being fleeting offers,…

Inside the Invisible Cage: How Algorithms Control Workers Hatim A. Rahman, University of California Press, August 2024, 288 pp. IT’S NOT JUST RIDE-SHARE DRIVERS who are feeling the squeeze as gig-work platforms tweak their algorithms to extract maximum value from workers. A new book that takes a deep dive into online labor markets reveals that highly skilled freelancers are also finding that the platforms that promised them greater autonomy over their livelihoods have instead trapped them in an opaque system. Rahman, who teaches at the Kellogg School of Management, describes the situation as part of a broader trend toward algorithmic control that “increasingly determines our opportunities without allowing us to understand or respond to the factors that govern our success.” At the heart of the matter are algorithms that rate…

Can you tell us about your role as the CIO of Mathematica? Mathematica is a company of subject matter experts — social scientists, data scientists, economists — and technologists who have a deep understanding of policies, practices, and data that impact public well-being around the world. Because of this, we’re able to help our clients reimagine how they collect, analyze, and apply data to solve today’s urgent social challenges. My role at Mathematica spans what we consider the traditional CIO role, in that it has all of the internal responsibilities for infrastructure, security, network, communications, enterprise resource planning, policy, and so on. But we also have some of the backbone for the client-facing teams, where technologists from my team sit in with the business units and they work in concert.…

In June 2024, the U.S. Supreme Court overturned the long-standing Chevron doctrine, fundamentally altering how businesses interact with federal regulations. The decision will almost certainly make it easier for companies to challenge agency regulations and other agency action interpreting federal statutes (that is, federal laws passed by Congress). However, it could also introduce new uncertainties in the regulatory landscape that will pose new challenges for business. Here, I will provide some “before and after” context about the doctrine and then highlight some of the most important takeaways for businesses operating in a post-Chevron environment. What Was Chevron? The 1984 Supreme Court decision in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. established a crucial legal doctrine that required federal courts to defer to administrative agencies’ reasonable interpretations of ambiguous…