Tag: Faculty

Artificial intelligence already is having a seismic effect on business communications, thanks to the availability of ChatGPT and other AI tools. So, time is of the essence in getting MBA students up to speed on the potential—and the challenges—posed by this rapidly evolving technology.

Enter Generative AI for Communicators, a six-week course offered as part of WashU Olin’s Online MBA curriculum. Staci Thomas, professor of practice in management communications, said she developed the class to explain underlying models that direct AI tools, as well as how they are used in business communications.

“We wanted to take a realistic approach to the course and tell students how these models work,” Thomas said. “They need to understand the flaws and the biases while also understanding the potential.”

To prepare to launch the class, Thomas took several courses in AI, but she doesn’t see herself as an expert. “Rather than saying I know everything, I act as a facilitator and collaborate with people to create a course that covers all the different angles.”

She brings in experts in the use of generative AI in business communications, including industry professionals who already use it. Thomas worked with Olin Professor Salih Tutun, an AI expert, on the technical content and Seth Carnahan, an associate professor of strategy, on ethical issues related to AI.

“There’s an ethics element to every module,” Thomas said. “AI is rife with ethical issues.” She noted that the data set on which the models are based can be pulled from a variety of sources of varying quality. “So it’s pulling both from academic journals and from, say, Reddit.” The models can also mimic the biases of the humans who train them.

Despite these challenges, Thomas said the technology is already a vital business tool.

“I believe we have to embrace it,” she said. “As we talk to business professionals, they’re using it every day. We’re doing our students a disservice if we don’t show them how to use it well.”

An AI-powered assistant: Meet Synthia

To help illustrate the potential uses of AI technology, Thomas worked with the team at Olin’s Center for Digital Education, which provides e-learning support for the OMBA program, to craft a special virtual environment for the course.

AI was used to create background images and even a robot “teaching assistant” named Synthia.

“The robot was animated so that it could move and interact with Staci on the video,” said Jorge Delgado, a video production specialist with the CDE.

The script for Synthia’s dialogue was created in ChatGPT. Verity Woody, a multimedia developer at the CDE, said they used an AI tool called Speechify to convert the text to audio and design Synthia’s voice.

“You can make the voice as robotic or humanlike as you want,” she said. “I wanted to make it sound like she was a robot, but not a ‘beep-boop’ metallic-sounding robot.”

Despite the significant use of AI, Thomas said the team’s creative input was vital.

“We say we built it using AI, but it took humans to actually do it,” she said. “We talked about context, history, the understanding of the program and the students. There were critical questions these guys asked me throughout the development to make it work. It was undeniably a team effort.”

Those conversations allowed Delgado and Woody to work with AI tools while also considering their impact.

Woody said she sees the utility of AI. But she worries about the impact on human artists whose work could be appropriated without compensation or credit. “Like a lot of things, it can be used for good or for not-so-good things,” she said. “I hope we get regulations (to protect artists), but I think there can be a harmonious relationship with AI.”

Since AI technology is already so widely available, Delgado said professionals need to adapt to using it, while ensuring they’re doing so ethically.

“One interviewee (in the course) said something that really stuck with me: ‘It’s not that AI is going to take your job; it’s the people who can utilize AI to its full capacity who are going to take your job.’ It’s out there. If you don’t use it, you’re missing out on opportunities,” he said.

As AI continues to evolve and impact the business world, Thomas sees the potential to incorporate it into future courses. “I don’t think this should be the only course we have on AI—it’s a starter course. We’re putting a stake in the ground with this.”

AI tools used to create the Generative AI for Communicators course:

ChatGPT 3.5 & 4 (with plugins) and Google Bard	language-processing chatbots that can generate humanlike text.
Bing AI	an AI-powered search engine and chatbot
Midjourney	a program that creates images from natural language descriptions
Speechify	an AI voice studio that translates text into voice files

Pictured: Staci Thomas, professor of practice in management communications, and Synthia.

Since its launch in November 2022, numerous authorities have raised concerns about the risks posed by OpenAI’s ChatGPT technology. In March, Italy’s Data Protection Agency took the extraordinary step of banning ChatGPT within the country over concerns about consent and personal data privacy.

Ironically, this one-month ban may have provided the strongest evidence to date of the technology’s transformative impact on business and the economy.

Capitalizing on this rare natural experiment opportunity, researchers at Olin Business School at Washington University in St. Louis and the National University of Singapore examined changes in the relative stock market valuation of Italian firms across multiple industries during the one-month ban to assess the ban’s consequences and generative AI’s overall value.

Their findings—published in a working paper, “Capital Market Consequences of Generative AI: Early Evidence from the Ban of ChatGPT in Italy”—show the ban’s impact was twofold: Not only did the ban negatively impact firm productivity, it also impacted investor behavior.

“Not since the introduction of the internet has a technology so quickly transformed how businesses operate and compete. What’s remarkable is that it’s easy and cheap to adopt, helping small, underdog businesses compete with much larger firms without making heavy investments in infrastructure or human capital,” said Jeremy Bertomeu, an associate professor of accounting at Olin Business School.

Measuring ban’s impact on businesses

Across the globe, businesses have leveraged AI generative technology to optimize processes that previously required significant labor and infrastructure support. Not surprisingly, the researchers found early adopters — including firms that provide professional, scientific and technological services — were hardest hit by Italy’s temporary ban.

According to the data, Italian firms in these high-exposure industries experienced an average negative return of 8.7% compared with similar European stocks during the monthlong ban.

They also found evidence that the ban had a greater impact on newer and small Italian businesses. Compared with larger, more established Italian businesses, these firms underperformed by 6.8-7.1%, respectively. 

“The negative market reaction indicates that new, small and tech-savvy businesses benefit the most from generative AI because it allows them to reduce the information advantages held by larger incumbent firms and narrow the competitive gap.”

How the ban impacted investors, businesses’ bottom line

Because the goal of the research was to understand the capital market consequences of the ban, it was also important to assess how the ban influenced investor behavior.

“ChatGPT transforms the investment landscape by providing investors, especially small investors, with a conversational and interactive platform to gather insights and navigate the complexities of the financial market,” Bertomeu said.

The research showed that the loss of this investment tool led to an increase in information asymmetry during the ban. The effect was greatest for firms with fewer institutional investors, limited analyst coverage and a lower presence of foreign investors — which would still have access to AI technology during Italy’s ban.

As a result of this information asymmetry, bid-ask spreads — the difference between the highest price a buyer will offer and the lowest price a seller will accept — widened during the ban and firms suffered decreased liquidity.  

“In the EU, it is unlikely that other countries will follow suit with a ban, but regulators in France, Germany, Spain, among others, met to discuss whether AI complies with EU privacy laws, and this could lead to future restrictions on the technology,” Bertomeu said.

A cautionary tale

In the short time since its launch, generative AI technology like ChatGPT has revolutionized businesses worldwide, providing a powerful tool for innovation and creation. Its influence on businesses worldwide will only continue to grow. 

‘Regulatory policy should always be based on careful cost-benefit analyses and public input. Our data demonstrate what can go wrong when regulators skip these fundamental steps.’

Jeremy Bertomeu

Yet, simultaneously, governments worldwide are grappling with potential security threats and ethical concerns related to technology. Bertomeu hopes the early evidence presented in this case study will offer a cautionary example of the potential consequences of regulating AI.

“No one asked the Italian regulatory agency to ban ChatGPT, but they did it anyway without any consultation of affected parties or elected officials,” Bertomeu said. “Regulatory policy should always be based on careful cost-benefit analyses and public input. Our data demonstrate what can go wrong when regulators skip these fundamental steps.”

Bertomeu’s co-authors include Yibin Liu, Yupeng Lin and Zhenghui Ni, all from the National University of Singapore.

Please join us in welcoming Dean Mike Mazzeo to the WashU Olin community. Although his official start was September 1, he’s been getting to know the school and our alumni over the past few months.

Enjoy this short video as Mike shares his enthusiasm about leading our school. And keep up with Mike by following him on LinkedIn and Twitter (X). 

Rik Nemanick, an adjunct lecturer in organizational behavior at Olin, poses this scenario in a new Harvard Business Review article:

You’re 15 months into your first job out of college when a senior leader from human resources asks to meet with you. About mentoring … him.

At the meeting, he says he wants to improve your firm’s recruiting practices: “I think you could teach me about what young professionals are expecting these days. I’d love it if you and I could meet over the next few months, and you could ‘mentor’ me on what to do.”

How do you respond?

“Reverse mentorships can be incredibly valuable,” Nemanick said. They promote diversity, help bridge generational gaps and can help you hone your leadership skills.

But they also create dynamics that can pose hurdles and potential risks for the junior employee.

In traditional mentoring, the mentor holds a more senior position and uses their wisdom to guide a junior colleague. When the roles are swapped, it’s called “reverse mentoring,” and it takes work.

“Being a reverse mentor can feel intimidating, especially if you’re new to the workplace,” writes Nemanick, who is the author of the book “The Mentor’s Way.” That book is the culmination of more than 20 years of mentoring training and consulting.

Find out about reverse mentoring in Nemanick’s article, “Are you ready to mentor a more senior colleague?”

Artificial intelligence tools such as ChatGPT and DALL-E are prompting uncertainty about the future employment landscape. Will they help workers by boosting productivity and enhancing the quality of their output? Or will the improved effectiveness of these tools replace workers instead?

As it turns out, the early economic effects of generative AI are already noticeable, if you know where to look.

Olin researchers Oren Reshef and Xiang Hui (along with a colleague from New York University, Luofeng Zhou) set out to quantify how AI tools have affected specific subsets of the labor market—writing-related and image-related freelance workers.

“There’s a lot of uncertainty trying to predict what the effects of AI will be in 10 years, but AI could be very different in 10 years,” said Reshef, an assistant professor of strategy. “We were thinking, ‘Let’s try to see empirically what the direct effect is in the very short run.’”

In both subsets of workers, the effect was evident: In the months after the release of popular AI tools, freelance workers in affected fields saw decreases in both the number of jobs and total earnings recorded on a widely used freelance platform.

The results of this research are the subject of a working paper co-authored by Hui, Reshef and Zhou, “The Short-Term Effects of Generative Artificial Intelligence on Employment: Evidence from an Online Labor Market,” which is currently under review for publication.

‘A more immediate effect’

Reshef and Hui said the team chose freelancers to see the rapid effects of AI releases. Because freelance work is naturally short-term and flexible, employers could pivot that work more quickly to AI than they could with full-time employees.

“There is little friction in this marketplace,” Hui said. “So, when you have technological advance, you would expect to see a more immediate effect.”

The researchers studied this market by collecting data from Upwork, an online freelance marketplace for knowledge workers. They could view workers’ employment histories, skills and qualifications, past earnings and reviews.

They started with workers in writing and related fields (proofreading and copy editing), because research has shown that they are among the most vulnerable to disruption by AI. Specifically, they looked at what happened to their jobs and income on Upwork shortly after the November 2022 release of ChatGPT, a powerful language-processing chatbot that creates higher-quality text than was previously available via AI.

After ChatGPT’s release, the number of monthly jobs for writing-related freelancers on Upwork declined by 2%, while monthly earnings declined by 5.2%.

“AI is really getting better, and this year we have ChatGPT, which is like a bomb going off, making everybody aware of it,” Hui said.

Hui, Reshef and Zhou’s analysis showed that after ChatGPT’s release, the number of monthly jobs for writing-related freelancers on Upwork declined by 2%, while monthly earnings declined by 5.2%.

A similar impact hit image-related workers (designers, image editors and artists) after the releases of two image-based AI tools, DALL-E, in April 2022, and Midjourney, in July 2022. Workers in those fields saw even steeper declines—a 3.7% drop in monthly jobs and a 9.4% loss of income.

While the team expected this outcome, they said it was important to be able to show it empirically.

“This is concrete evidence based on real economic data, instead of intuition or hunches,” Hui said.

Documenting the AI transition

Reshef and Hui were struck by the fact that these negative effects didn’t diminish for freelancers who were identified as more experienced and skilled.

“One hypothesis is that the highest-quality people, those with the most experience, would be the ones most protected from this technology—that their skills would act as a moderating factor,” Reshef said.

Instead, the evidence suggested that more highly skilled workers—as defined by such attributes as the number and skill level of past jobs, hourly rate, and Upwork’s “top-rated” badges—actually saw a greater drop in new jobs and income.

While it seems counterintuitive, he said this outcome is consistent with other research on the effects of AI in the workforce.

“In a [separate] experiment, researchers introduce the technology to various workers,” he said. “They find that it helps the lower-quality workers the most, and, if you think about it, it makes sense. If you’re doing lower-quality work, this new tool can help increase your productivity or quality. For higher-quality workers, instead of being protected, you’re losing your competitive edge.”

Reshef and Hui cautioned that the results regarding skill level are not definitive, but rather are suggestive of that outcome.

They also noted that all these results only reflect the short-term impact of AI tools on freelance workers. As AI technology evolves and becomes more integrated into other tools, these effects might be increased or reduced, or provide benefits to workers or consumers to mitigate them.

“We only look at the short-run effect on these workers,” Reshef said. “We’re showing one potential ‘danger’ of this technology, but there are numerous benefits as well that are beyond the scope of this research.

“People could get a new job working with AI to do something we haven’t even thought of yet.”