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Journal of Business Ethics

Erschienen in:

24.11.2021 | Original Paper

How to Evaluate Managerial Nudges

verfasst von: Grant J. Rozeboom

Erschienen in: Journal of Business Ethics | Ausgabe 4/2023

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Abstract

A central reason to worry that managers should not use nudges to influence employees is that doing so fails to treat employees as rational and/or autonomous (RA). Recent nudge defenders have marshaled a powerful line of response against this worry: in general, nudges treat us as the kind of RA agents we are, because nudges are apt to enhance our limited capacities for RA agency by improving our decision-making environments. Applied to managerial nudges, this would mean that when managers nudge their employees, they generally bolster their employees’ limited RA agency and, thus, treat employees as the kinds of RA agents they are. My aim is to vindicate a qualified version of the initial worry from the nudge-defender response and, as a result, provide a clearer, more plausible framework for evaluating managerial nudges than what nudge critics have previously given. I do this, first, by showing how nudge defenders rely on equivocation between two different senses of “treating someone as RA.” The value-preserving notion that supports the nudge-defender prescription to protect and enhance RA capacities is different from the authority-recognizing notion that underwrites the initial worry about nudging. Second, I argue that the authority-recognizing notion of treating someone as RA implies that managerial nudges treat employees as RA just when the nudges are compatible with relating to employees as equals. Third, I explain how, to determine when managerial nudges are compatible with relating to employees as equals, we need to consider how employees surrender aspects of their equal, agency-grounded authority to managers.

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In addition to helping employees make better choices, managerial nudges can also be used to make employees more productive and efficient. I will not be addressing this broader category of managerial nudges, because while I think that my criteria for managerial nudges to treat employees as RA will still apply, efficiency-focused nudges raise additional moral concerns that I do not have room to address here.

A similar diagnosis may be reached by applying a broad conception of manipulation, such as that developed in Gorin (2014). But I want to avoid prejudging the question of whether manipulation is always objectionable and, thus, focus on a more basic moral criterion—the criterion of treating people as rational and autonomous.

Dynamic choice problems significantly overlap with the general kind of problem that leads Engelen and Nys (2019, p. 10) to focus on autocracy. They describe autocracy broadly as “actually being motivated [toward] … and … realizing” the ends we decide “are important.” It is hard to see how setting ends that are important to oneself is distinct from “actually being motivated [toward] … and … realizing” them unless one has in mind the kinds of difficulties behind dynamic choice problems, such as intransitive preferences and temporal discounting. This is also not to presume that temporal discounting is always irrational; it is just to point out that, starting with Sunstein and Thaler’s (2003) earliest work on nudging, diachronic tendencies such as temporal discounting were the designated targets of nudging.

Engelen (2019) also distinguishes between “process” and “outcome” rationality, which cuts across the distinction between synchronic and diachronic rationality, because both synchronic and diachronic rationality have process and outcome aspects, and both process and outcome rationality have synchronic and diachronic forms. I think the synchronic–diachronic distinction is more to the point here because, insofar as nudges promote rationality, it is clear they can promote both process and outcome rationality, but it is less clear whether they can promote both synchronic and diachronic rationality.

Sunstein (2015, p. 512) puts the general point well: “Insofar as the goal [of nudging] is to promote navigability, and to make it easier for people to arrive at their own preferred destinations (in terms of their preferences and their values), the ethical objections [to nudging] are greatly weakened and might well dissipate[.].”

Again, I am not arguing that the nudge-defender strategy requires an ecological, diachronic account of RA agency. I only think that the nudge-defender reply is most clearly delivered with such a view in mind. I say this in part to set aside responses to the nudge-defender reply that dispute its focus on ecological, diachronic RA agency. Perhaps there are other forms of rationality and autonomy that matter, or that more plausibly constitute human rationality and autonomy, but we do not need to settle this issue here.

These are both “normative” versions of the “treating-as” relation, according to Lippert-Rasmussen’s (2018, pp. 73–76) typology of treating-as relations. As I argue in Rozeboom (2020), a non-normative version of this relation does not fit well within the nudge-defender reply.

See esp. Raz (2001, pp. 160–162). See also Velleman (2008), Cranor (1975), O’Neill (1989), Dillon (1992), Hill Jr (1992), and Conly (2013).

See esp. Korsgaard (2021) and Darwall (2006).

You might wonder whether the value-preserving conception requires protecting and enhancing RA agency, rather than simply avoiding harming it. For that to be true, it would need to be shown that responding to intrinsically valuable things, in general, merely requires avoiding harming the basis of their value. This seems like an implausibly thin conception of responding to intrinsic value. On the most compelling conceptions of what it is to value something, such as Raz’s (2001), valuing requires some positive concern to preserve and enhance, so far as one is in a position to do so. See also the conception of valuing in Scheffler (2010).

Enoch (2017, p. 32ff) conceives of this second aspect of practical authority as autonomy as “sovereignty.”

You might object to this line of thought on the grounds that it is implausible to think that any inequality in authority involves a failure to treat someone as RA unless those with lesser authority have appropriately surrendered their RA agency-grounded authority. I suspect this concern derives from an unduly narrow understanding of what goes into surrendering authority, including in political contexts (such as surrendering authority to officers of a democratic state). As I go on to explain, not all authority surrenders occur by way of explicit consent to specific forms of influence and power. My view plausibly allows for, e.g., U.S. citizens to have surrendered aspects of their RA agency-grounded authority to U.S. governmental officials.

I think this provides a promising alternative to how ethics-of-care theorists view the moral significance of personal relationships between adults, such as in Held (2006). Such theorists, like me, reject a consent-based (or contractual) model of explaining the legitimacy and moral importance of personal relationships, but they reject along with it the idea that what matters is how persons surrender their equal, agency-grounded authority, which is an idea I want to preserve.

This is not to say that fiduciaries have no non-discretionary—what Mejia (2019, p. 520) calls “nonelective”—responsibilities. It is just to point out that, in general, their obligations as agents to principals tend to involve a significant degree of latitude.

These are drawn from the litany of examples of commonplace forms of managerial interference in Anderson (2017, pp. 136–137).

See also Anderson (1999, 2010).

As Lippert-Rasmussen (2018, p. 87) puts it, relating as equals requires “ascribing equal authority … to the perspectives of different people.” See also Ciepley (2013) and Néron (2015).

A problem here is that persons’ capacities for RA agency vary (in a gradated fashion) and so, it seems, should the basic authority grounded in these capacities. See Rozeboom (2018) for a solution to this problem that is amenable to the relational egalitarian interpretation of the RA Worry that I offer here.

This is a part of what leads McMahon to propose, instead, that managerial authority can be authorized (under certain conditions by which corporations function as a subordinate arm of the state) as an extension of the political authority of democratic states. If McMahon’s view is correct, then whether managerial nudges treat employees as RA may depend on how citizens’ RA agency-grounded authority relates to the political authority of the democratic state they together constitute. I set that issue aside here, since I doubt McMahon’s view of the strength of corporate authority.

Consider the anger generated whenever employers intrude upon what employees take to be concealed aspects of their personal lives, as illustrated by the issue of social media privacy I discuss below.

Nagel (ibid., p. 10) lays out three basic reasons for concealment: a “social” reason, which concerns how concealment protects “us from one another and from undesirable collisions and hostile reactions,” a “personal” reason, which concerns protection of “the inner life from a public exposure that would cause it to wither,” and a “selective” reason, which concerns how concealment allows us to choose a select number of intimates with whom the tendency toward concealment recedes. It seems that all three reasons apply to the workplace.

At this point, you might wonder about a further possibility: that managerial nudging is compatible with employees’ hypothetical consent. So far I have focused only on how the actual exercise of employees’ authority can (dis)allow managerial nudging. A different way that managerial nudges could be rendered morally acceptable by employees’ RA agency-based authority, perhaps, is when, even though no actual exercise of authority (or consent) has taken place, an employee would, under certain ideal conditions, consent to the nudges. I cannot rule out this possibility, but it seems to me that the conditions that render hypothetical consent morally significant—conditions in which enabling people not to be alienated from their deep, guiding values and commitments (Enoch 2017, pp. 32–34) requires adverting to their hypothetical consent, due to the difficulty of securing their actual agreement—are not typically present in workplace situations.

Some analogous versions of these requirements may apply to open surrenders of authority, but they will be much less stringent in their structure and application and, accordingly, will not entail the same kinds of constraints on nudging that follow from closed authority surrenders.

See, e.g., Estlund (2002) for a discussion of employees’ misplaced beliefs about their rights against wrongful termination of employment.

Sometimes these three epistemic sources point in different directions, and it will be complicated to determine which expectations about one’s employment are reasonable. But these complications will not impact my argument.

Google’s dietary nudge can be contrasted with WeWork’s more heavy-handed attempts to influence their employees to eat less meat (Gelles 2018). WeWork ceased offering meat at company-sponsored functions and reimbursing meals containing meat. In this way, WeWork employees’ incentives were significantly altered, and altering employees’ incentives is importantly different from implementing managerial nudges. For an explanation of why nudges should be distinguished from mere incentive alterations, see Kumar (2016, p. 863).

This is not to claim that such nudges bypass rational processes more broadly. I am focused on a subset of rational processes that concern the sort of conscious monitoring and deliberation we use to hold one another accountable for upholding normative standards. So, a nudge may violate requirement B even if Neil Levy (2019) is correct that it does not bypass all rational (or reasoning) processes. Many of the rational processes that Levy shows are engaged by nudges do not suffice for the deliberative processes needed for accountability.

Imagine a manager who is bad at implementing subtle nudges. Their attempts to influence their employees using the background features of choice architecture are laughably transparent and noticeable. (Fans of the American television series The Office might imagine that Michael Scott tries his hand at nudging.) Still, their efforts would represent a failure to satisfy requirement B, because they do not intentionally enable employees to scrutinize their exercises of managerial authority.

Schmidt (2019) lays down a similar transparency condition, which requires that “a watchful person can infer nudge tokens in her environment from their general type without this being prohibitively difficult and costly” (Ibid., p. 534). But, because Schmidt relies on a value-preserving notion of treating-as-RA, he does not think this transparency condition is required for nudges to treat people as RA, as I do (on my authority-recognizing account). He also suggests that the transparency condition will not restrict nudging as much I suggest here (this may be due in part, though, to his focus on public policy nudges, which differ in important ways from the managerial nudges on which I focus here).

Sunstein (2015, 2016, pp. 16–17) repeatedly stresses that many nudges consist simply in making information apparent, which is a key part of what the Google veggie nudge does. But note, first, that mere information provision does not suffice for a nudge, second, that not all nudges that make information salient are apparent as nudges (as the Google veggie nudge is) and third, most other kinds of nudges are not so easily recognizable (as forms of purposeful influence).

Although, such transparency may not erode the effectiveness of nudging as much as we might expect; for some optimistic discussion of nudge transparency and nudge effectiveness, see Loewenstein et al. (2015).

This broadly shares the spirit of the anti-paternalistic stance toward nudging taken by Robert Sugden (2018), although I do not require that managerial nudges be mutually beneficial, as Sugden’s contractarian view would.

This is similar to how many political theorists have understood the difference between the kinds of obstacles to pursuing our ends that do and those that do not restrict our social freedom: only those obstacles for which some other persons are morally responsible are potentially freedom-restricting. See, e.g., Schnayderman (2013).

To be clear, a manager could take responsibility for a nudge that was created independently of their managerial efforts, overtly deciding to enforce and sustain the nudge. But I am positing an example where this is not the case.

This is because relations of equality oppose social hierarchy between natural persons (think of feudal societies, or caste systems), and so are not, in principle, opposed to unequal authority between natural persons and collective agents and institutions. On this point, see Kolodny (2019).

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Titel: How to Evaluate Managerial Nudges
verfasst von: Grant J. Rozeboom
Publikationsdatum: 24.11.2021
Verlag: Springer Netherlands
Erschienen in: Journal of Business Ethics / Ausgabe 4/2023
Print ISSN: 0167-4544
Elektronische ISSN: 1573-0697
DOI: https://doi.org/10.1007/s10551-021-05005-w

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