Umschlaggestaltung: © Olaf Gloeckler, Atelier Platen, Friedberg Cover Design: © Olaf Gloeckler, Atelier Platen, Friedberg Conception de la couverture du livre: © Olaf Gloeckler, Atelier Platen, Friedberg Tobias M. Scholz Big Data in Organizations and the Role of Human Resource Management A Complex Systems Theory-Based Conceptualization PERSONALMANAGEMENT UND ORGANISATION Herausgegeben von Volker Stein Tobias M. Scholz is currently holding a position as a Post-Doctoral Re- searcher at the University of Siegen. After graduating from universities in Germany and the U.S., he has worked as a Research and Teaching Assistant. His field of research is human resource management and or- ganizational behavior. Big data are changing the way we work as companies face an increas- ing amount of data. Rather than replacing a human workforce or making decisions obsolete, big data are going to pose an immense innovating force to those employees capable of utilizing them. This book intends to first convey a theoretical understanding of big data. It then tackles the phenomenon of big data from the perspectives of varied organizational theories in order to highlight socio-technological interaction. Big data are bound to transform organizations which calls for a transformation of the human resource department. The HR department’s new role then enables organizations to utilize big data for their purpose. Employees, while re- maining an organization’s major competitive advantage, have found a powerful ally in big data. www.peterlang.com Big Data in Organizations and the Role of Human Resource Management PERSONALMANAGEMENT UND ORGANISATION Herausgegeben von Volker Stein Band 5 Zur Qualitätssicherung und Peer Review der vorliegenden Publikation Die Qualität der in dieser Reihe erscheinenden Arbeiten wird vor der Publikation durch den Herausgeber der Reihe geprüft. Notes on the quality assurance and peer review of this publication Prior to publication, the quality of the work published in this series is reviewed by the editor of the series. Tobias M. Scholz Big Data in Organizations and the Role of Human Resource Management A Complex Systems Theory-Based Conceptualization Bibliographic Information published by the Deutsche Nationalbibliothek The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data is available in the internet at http://dnb.d-nb.de. Zugl.: Siegen, Univ., Diss., 2016 Library of Congress Cataloging-in-Publication Data Names: Scholz, Tobias, author. Title: Big data in organizations and the role of human resource management : a complex systems theory-based conceptualization / Tobias M. Scholz. Description: New York : Peter Lang, [2017] | Series: Personalmanagement und Organisation ; Vol. 5 | Includes bibliographical references. Identifiers: LCCN 2016059623 Subjects: LCSH: Personnel management–Research. | Big data. | System theory. Classification: LCC HF5549.A27 S36 2017 | DDC 658.4/03801–dc23 LC record available at https://lccn.loc.gov/2016059623 This book is an open access book and available on www.oapen.org and www.peterlang.com. This work is licensed under the Creative Commons Attribution- NonCommercial-NoDerivs 4.0 which means that the text may be used for non- commercial purposes, provided credit is given to the author. For details go to http://creativecommons.org/licenses/by-nc-nd/4.0/ D 467 ISSN 1868-940X ISBN 978-3-631-71890-2 (Print) E-ISBN 978-3-631-71903-9 (E-PDF) E-ISBN 978-3-631-71904-6 (EPUB) E-ISBN 978-3-631-71905-3 (MOBI) DOI 10.3726/b10907 © Peter Lang GmbH Internationaler Verlag der Wissenschaften Frankfurt am Main 2017 All rights reserved. PL Academic Research is an Imprint of Peter Lang GmbH. Peter Lang – Frankfurt am Main ∙ Bern ∙ Bruxelles ∙ New York ∙ Oxford ∙ Warszawa ∙ Wien This publication has been peer reviewed. www.peterlang.com V Preface In an environment where digitization permeates both society and economy at an ever-increasing pace, big data rank among the most fascinating challenges for all types of organizations. And their influence is not limited to those organizations concerned with matters of political administration such as national intelligence. All types of organizations, and especially those seeking to make a profit, i.e. companies, resort to big data. They now sense that the use of big data simultaneously entails fascinating opportunities and great risk. Companies are immediately affected by the sheer momentum of the challenge that is big data, thus facing a series of profound questions: Do we even want to deal with big data? If so, what exactly do we want to do? What is possible, what is legal, what is reasonable, what is effective, and what can we legitimize? Those aspects refer to strategic decisions and, consequentially, to the more detailed questions regarding the actual execution of big data projects. Tobias M. Scholz tackles exactly this in his dissertation. Even just consecutively reading through the array of practical as well as theoretical deficits he explicitly elaborates, reveals the overall chain of arguments: research on big data rarely dedi- cates itself to the human perspective – besides being a technological phenomenon, big data is also a social one – research rarely contextualizes big data towards par- ticular corporations – big data challenge the role of the HR department – neither organizational theory nor theory on HR management adequately discuss the sub- jectivity of big data – research widely ignores the catalyzing effect of big data on complexity – the effects of big data on employees and the company are unclear – big data are insufficiently categorized theoretically – research on big data still lags behind in terms of practical application. Especially when putting into consideration those undeniable deficits, the subject of big data in organizations and the role of hu- man resource management appear both pressing and highly economically relevant; above all doing so by means of a complex systems theory-based conceptualization. For his dissertation, Tobias M. Scholz thus choses a topic that bares the potential for substantial innovation in both theory and practical application. In his work, he clearly utilizes said potential by initiating important developments in three distinct ways: First of all, he provides a novel, concise, scientifically exact, and up-to-date out- line, thus answering the question: “What are big data?” His very differentiated conceptualization goes beyond picking up numerous definitions and the evolutions thereof or differentiating said definitions from related concepts. He interconnects diverse developments of data-driven digitization and adjusts them to one another. In reference to a systematization introduced by Boyd and Crawford , he does away with unrealistic expectations regarding big data, thus bringing the concept back down to earth. He conducts a broad philosophical categorization of big data that includes critical observation. All things considered, he successfully illustrates the limitations VI of big data in organizations, while providing crucial hints as to how big data can be utilized sensibly. Especially the critical evaluation of those terms common to the big data discourse that are oftentimes used in a diffuse fashion, as well as of the only roughly implied paradigmatic progress, forms the base of his constructivist composition of alternative explanations and design suggestions. Secondly, he stays true to his aim of specifying the implications of big data for organizations in general, and for the role of the HR department in particular. Not only does he successively walk the reader through his coherent mental framework; he integrates concepts derived from diverse strands of theory, among which being the ideas of complex systems theory, population ecology theory, and sociohistorical technology assessment, with their practical application. Particularly convincing is his differentiation between reactive, reactive-anticipating, and proactive roles of the HR department. In this context, he competently tackles future tasks that have arisen following the emergence of big data. Among those tasks are “big data risk governance” or “big data immersion”, both featuring a strong link to HR economical practice, like that of “big data literacy” to HR development. En passant, he manages to develop a sustainable future role for the HR department, a corporate function that, as a result of the digitization and the pressing need for legitimization, finds itself at risk of being marginalized in corporate practice. Thirdly, Tobias M. Scholz goes beyond elaborating a merely theory-based concep- tualization on how to handle big data in organizations and the HR management. He also illustrates, in a differentiated manner, their implementability. He does so, firstly, with regards to practical application, by suggesting to fundamentally transform the HR department, while at the same time anticipating the emotional discussion and resistance this would entail, and sounding a word of caution when professionally handling this transformational challenge (of which he also provides a rough outline). He does so, secondly, with regards to research, by placing particular emphasis on social and ethical research challenges, stimulating further research on the transfer between theory and practice, and encouraging the HR research community to more intensely attend to novel paradigms such as gamification. He does so, thirdly, with regards to didactics in academia, by showing that both big data and the conse- quences of their application are fields of major didactic relevance. More indirectly, Tobias M. Scholz takes a step in the theoretical discourse to- wards converging the logic of stabilization and that of dynamization. His major contribution is located on the conceptual metalevel. He bridges the gap between the necessities of constant organizational dynamization on the one hand, and the need for organizational balance on the other, thus postulating what he calls the “homeodynamic organization.” His request to place the responsibility of creating such a coherence into the hands of the HR department lies grounded in the fact that the HR department is the only corporate function concerned with both employees as well as their data-related working conditions. On the one hand, this dissertation about the interaction between data-related technology and human actors reveals to the reader that the implementation of big data is going to fundamentally change the corporate function of human resource VII management, as well as the way this transformation will occur. On the other hand, it illustrates the disposition of HR management itself to be more active, create more value, and drive the ethical implementation of big data in organizations. The fact that Tobias M. Scholz received this year’s best dissertation award of the University of Siegen (“Förderpreis der Dirlmeier-Stiftung”), further attests to the excellence of his research. Siegen, November 2016 Univ.-Prof. Dr. Volker Stein IX Acknowledgement What is the similarity between big data and the number 42 in the Hitchhiker’s Guide to the Galaxy? Both give answers, but the questions are unknown. Big data are complex and big data surround us, therefore, I am truly grateful to my doctoral adviser Volker Stein of allowing me to tackle such a research behemoth. Furthermore, giving me guidance and above all giving me the area of freedom to deal with this topic. I also want to thank Hanna Schramm-Klein and Arnd Wiedemann for being part of my thesis committee and for allowing me to present my thesis in such length and scope. A special thank you goes to Florian Weuthen for his patience to read through my manuscript. The same goes to my mom, my father and my brother for their com- ments and feedback. A special dedication is to my cat Frodo; she could not see the end of this journey. On the way there were many colleagues who made the work a joy: Kevin Chaplin, Anna Feldhaus, Cornelia Fraune, Brigitte Grebe, Lena Kiersch, Martin F. Reichstein, Matthis S. Reichstein, Lina Ritter, Katrin Rödel, Katharina von Weschpfennig and Svenja Witzelmaier. The book may be finished, but big data will become even more important in the upcoming years, so it will be interesting to see how we will transform big data and how big data will transform us. Siegen, November 2016 Tobias M. Scholz XI Table of Contents List of Figures ........................................................................................................XV List of Tables ....................................................................................................... XVII 1. Introduction ......................................................................................................1 1.1 Statement of the Problem ............................................................................1 1.2 State of Research............................................................................................4 1.3 Terminological Clarification .......................................................................6 1.4 Objective of the Thesis .................................................................................6 2. Theoretical Framework .............................................................................9 2.1 Big Data ...........................................................................................................9 2.1.1 Etymological Origin ..............................................................................9 2.1.2 Epistemological Conceptualization and Hermeneutical Observations ............................................................12 2.1.3 Delimitation from Related Terms ....................................................20 2.1.3.1 Data Mining ..........................................................................20 2.1.3.2 Algorithms and Machine Learning..................................21 2.1.3.3 Artificial Intelligence ..........................................................23 2.1.4 Big Data Pitfalls ...................................................................................25 2.1.4.1 Big Data Change the Definition of Knowledge ............26 2.1.4.2 Claims of Objectivity and Accuracy Are Misleading ....28 2.1.4.3 Bigger Data Are Not Always Better Data ......................32 2.1.4.4 Taken out of Context, Big Data Lose Their Meaning ....34 2.1.4.5 Accessibility Does Not Make Them Ethical...................35 2.1.4.6 Limited Access to Big Data Creates New Digital Divides ......................................................................36 2.1.5 May Big Data Be with You ................................................................37 XII 2.2 Big Data at the Socio-Technological Level ...........................................40 2.2.1 Technology and Society .....................................................................40 2.2.2 Technological Determinism ..............................................................41 2.2.3 Social Determinism .............................................................................44 2.2.4 Socio-Technological Concurrence ...................................................47 2.3 Big Data at the Organizational Level ......................................................49 2.3.1 Epistemological Framing ...................................................................49 2.3.2 Organizations as Open Systems .......................................................53 2.3.2.1 Big Data in Cybernetics .....................................................54 2.3.2.2 Big Data in Systems Theory ..............................................59 2.3.2.3 Big Data in Population Ecology Theory .........................61 2.3.2.4 Big Data in Complex Systems Theory ............................64 2.4 Big Data at the Human (Resource) Level ..............................................73 2.4.1 Current Status of Big Data in Human Resource Management ......73 2.4.2 Classification of Views .......................................................................79 2.4.3 Augmentation as an Alternative Path ............................................80 3. Research Framework ................................................................................83 3.1 Mental Model................................................................................................83 3.2 Methodology.................................................................................................86 4. Analytical Implementation ..................................................................91 4.1 Core Assumptions of Big Data within Organizations ........................91 4.1.1 Temporal Dimensionality ..................................................................92 4.1.2 Factual Dimensionality ......................................................................95 4.1.3 Social Dimensionality.........................................................................98 4.1.4 Cross-Sectional Dimensionality .................................................... 101 4.2 Homeodynamic Organization ................................................................104 4.2.1 Characterizing Homeodynamic Organization ........................... 104 4.2.2 New Roles of the Human Resource Department ...................... 109 4.2.2.1 Big Data Specific Roles .................................................... 110 XIII 4.2.2.2 Big Data Watchdog as Cross-Sectional Role .............. 115 4.2.3 Human Resource Daemon .............................................................. 118 4.2.3.1 Data Farm ........................................................................... 120 4.2.3.2 Fog of Big Data .................................................................. 123 4.2.3.2.1 Big Data Baloney Detection ........................................... 124 4.2.3.2.2 Big Data Tinkering ........................................................... 128 4.2.3.3 Big Data Risk Governance .............................................. 131 4.2.3.4 Big Data Immersion ......................................................... 139 4.2.3.4.1 Big Data Authorship ........................................................ 139 4.2.3.4.2 Big Data Curation ............................................................. 143 4.2.3.4.3 Big Data Literacy .............................................................. 147 4.2.4 Human Resource Centaur .............................................................. 151 4.2.5 Big Data Membrane ......................................................................... 154 4.3 Homeodynamic Goldilocks Zone ..........................................................157 5. Results ...............................................................................................................161 5.1 Summary .....................................................................................................161 5.2 Limitations ..................................................................................................166 5.3 Implications for Human Resource Management................................168 5.4 Implications for Research ........................................................................171 5.5 Implications for Teaching ........................................................................173 5.6 Outlook ........................................................................................................175 References ................................................................................................................177 XV List of Figures Figure 1: Original Map Used by Snow (1854).......................................................10 Figure 2: Conceptual Evolution of Data over Time (Scholz 2015a). ...............33 Figure 3: Big Data’s Technology Cycle..................................................................38 Figure 4: Organizational Inertia and Big Data Cap. ...........................................63 Figure 5: Big Data as a Destabilizing Power for Order and Disorder. ............68 Figure 6: Mental Model. ............................................................................................84 Figure 7: Inductive Top-Down Theorizing (Shepherd & Sutcliffe 2011: 366). ....................................................................................................88 Figure 8: The Perception of Individual Identity on the Basis of Data Shadow and Social Shadow. ...................................................100 Figure 9: Evolution of Data Streams within the Data Farm ...........................121 Figure 10: Big Data Risk Governance ....................................................................133 XVII List of Tables Table 1: The Term “Big Data” in the Years 1961–1979........................................11 Table 2: Dimensions of Big Data .............................................................................14 Table 3: Existing Definitions of Big Data ..............................................................17 Table 4: Selection of Cognitive Biases ....................................................................29 Table 5: Type I Errors and Type II Errors ..............................................................31 Table 6: Overview over the Theories on Open Systems ....................................53 Table 7: Definitions of First and Second Order Cybernetics .............................55 Table 8: Inclusion of Organizational Theory Streams in Complex Systems Theory ..........................................................................66 Table 9: Examples of Big Data in Human Resource Management Practice .................................................................................76 Table 10: Hermeneutical Observation of Big Data in HRM ................................78 Table 11: Polarities of Big Data in Organizations on the Basis of the Core Assumptions .......................................................................................92 Table 12: Big Data Tradeoff Concerning Velocity .................................................94 Table 13: Characteristics of a Homeodynamic Organization ...........................108 Table 14: New Roles for HR Department...............................................................110 Table 15: Positioning of the Homeodynamic Goldilocks Zone ........................158