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    Bridging Ethical Gaps: A Case for Virtue Ethics in AI Governance at OTTO
    Organizations have increasingly focused on governing artificial intelligence (AI) by mainly drawing on deontology and utilitarianism - two ethical frameworks that emphasize principled constraints (the former) or desirable outcomes (the latter). However, both theoretical analysis and practice at Germany’s leading e-commerce company, OTTO, demonstrate the limits of relying too narrowly on these approaches. We show that principles- and outcomes-based mechanisms, while useful, exhibit wellknown weaknesses when put into operation under the uncertainties posed by AI. Building on insights from virtue ethics, we argue that AI governance should give stronger attention to how organizations foster the moral character, practical wisdom, and professional virtues of decisionmakers. Drawing on evidence from OTTO’s AI governance initiatives, we illustrate how a more systematic application of virtue ethics helps overcome the shortcomings of deontological and consequentialist frameworks, thereby strengthening organizational AI governance in complex, fast-changing contexts.
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    How Ethical Theories Can Help Build Effective AI Governance in Organizations: Evidence From a Case Study at E-Commerce Company OTTO
    Governing artificial intelligence at the organizational level (AIG) is crucial to ensure that the technologies are used responsibly. The literature has largely focused on identifying suitable means to govern technologies that learn from data and are no longer deterministic. However, there remains considerable uncertainty about what ‘responsible’ use of AI means, and how governance will bring it about. This study addresses these conceptual issues by bringing ethical theories (consequentialism, deontology, and virtue ethics) into the AIG discourse. We first use these ethical theories to clarify the meaning(s) of responsibility and to develop action-theoretical mechanisms that relate governance to the organizational use of AI. Which we then apply in an in-depth case study at Germany’s leading e- commerce company, OTTO. We find that AIG encompasses three dimensions of responsibility (calculated, compliant, and competent use of AI) and that governance measures exhibit both the strengths and weaknesses of the ethical theories on which they are implicitly based. We conclude that governing AI for responsible use depends on situated judgment of individual decision makers but are currently under-theorized. Hence, we propose an alternative view that understands AIG as an ongoing, dialogical reflection between those who design AIG measures and those who enact them.
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    Responsible Use of Artificial Intelligence as Continuous Proportionalization: Fashion Image Generation at OTTO
    The inherent ambivalence of machine learning-based artificial intelligence (AI) technologies makes ensuring their responsible use a pressing concern. While the literature converges on the importance of governance at the organizational level, uncertainty remains about what responsible (use of) AI actually is. We conceptualize responsible AI as both a process and outcome of social evaluation. We propose a model (“continuous proportionalization”) that explains how organizations construct collective interpretations of responsible AI along the dimensions of legitimacy, suitability, necessity, and proportionality. We illustrate the model through a case study of AI-based fashion image generation at Germany’s largest e-commerce company, OTTO.
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