Resources applied to initiatives on the Internet-of-Things (IoT) are substantial and growing. For example, estimates suggest that the IoT has a total potential economic impact of $3.9 trillion to $11.1 trillion a year by 2025. At the top end, that level of value would be equivalent to about 11% of the world’s economy (McKinsey Group, 2015). Gartner (2013) suggests that by 2020 there will be around 26 billion devices on the IoT and many of the IoT systems and technologies are expected to usher in automation in nearly all fields.
However, despite the overall positive feeling about the IoT’s development, serious risks are present. For example, there is now evidence that IoT initiatives are often insecure and a recent report suggests that the IoT industry’s security track record has been poor. High profile cases such as the US Federal Trade Commission (FTC) settlement with TRENDnet revealed that because of poor security practices their Home CCTV system allowed strangers to see, and sometimes listen into, over 700 home security camera feeds. IoT critics have considered whether an IoT enabled world create a dystopian nightmare where everyone and everything will be constantly monitored and tracked by the government.
This imminent danger to the integrity of the IoT system can be illustrated with the algorithm of Dr. Arnim Zola in the movie Captain America: The Winter Soldier. In this movie, Dr. Arnim Zola developed an algorithm that focused on potential threats to the mother organization, Hydra, based on SAT scores, social media, voting patterns, and much more to determine if specific behavior or skills could threaten the organization. In a similar way, it is clear that the IoT can also cause or lead to excessive monitoring and data collection if it is not carefully implemented. Unfortunately, the algorithm metaphor of Dr. Zola holds real merits since it is increasingly becoming the norm among knowledge driven companies to collect enormous amounts of data to predict the behavior of their customers.
As the push towards IoT and ‘big data’ makes clear, these risks become more and more pronounced over time when more information is gathered about firms and their stakeholders. While these risks are mainly external to the organization, often the risks stem from internal failures in governance and control and can arise through mistakes, disgruntled employees, and/or lack of integrity. Much more research in needed to uncover how the IoT can be successfully implemented with the customers’ fairness in mind, but also how the dark sides of the IoT can be avoided. We hope with our special issue, that more research will determine the integrity of the IoT system so that businesses will be able to deliver their promises to the customers.
With many IoT projects still not implemented successfully to deliver their intended results, we argue that the lack of clear definitions of IoT has impacted the implementation of IoT negatively. We consider that the IoT failure cannot be attributed to any one factor but suggest some common reasons for the poor results of IoT initiatives. Specifically, investigating reasons for the failure of IoT implementation, we highlight issues at the tactical level, including quality of data, project management skills, and technological skills. At the strategic level, we consider strategic aspects of IoT implementation, such as lack of focus on IoT capability and IoT strategies. Below, we identify several important issues, or dark sides, that IoT providers should consider, divided in four broad categories:
- Knowledge and intelligence-based dark side behavior
Information and market intelligence play an essential role in IoT systems. However, when IoT firms hinder, distort or otherwise manipulate information flows for their own interests and against those of the consumer or other interested parties, various forms of dark side behavior may occur. Two dark sides examples under this heading include: information misuse and privacy issues.
- Transaction based dark side behavior
The second category of IoT dark sides concerns situations in which firms are trying to profit as much as they can without considering a relationship- and more long-term approach. Providing inferior products and services deliberately to some customers or constraining or misdirecting their choices are such examples. By restricting the alternatives available, offering the customer products and services with “hidden” and unexpected costs and conditions, or ignoring the needs of some customers, firms may profit from each transaction. Other examples include confusing customers with the small print or deliberately profiting from financial penalties.
- Relationship based dark side behavior and negligence
When relationships lose their ability to add further value, trust may disappear, acts of opportunistic behavior may come to light or the relationship may simply go stale. Some relationships become bad when the asymmetry and dependence in those relationships become too overpowering. That is, when customers cannot leave, get locked in or are too dependent on the supplier and thus, receive lesser quality of service as a result. Dark side behaviors relating to the relationship occur in situations in which the firm discriminates the needs of some customers, ignoring others, based on their profit margins. Or when the firm makes promises of mutual beneficial outcomes (reciprocity of information provided versus benefits received), but thereafter neglects their promises.
- Integrity challenge and personal dark side behavior
Finally, in the fourth category, we consider dark side instances that concern the lack of integrity and the negative impacts of IoT providers’ dark side behavior on third parties when immoral conduct and manipulation is involved. These dimensions consider service providers’ deliberate attempts at manipulating market conditions in order to take advantage of the situation, while disadvantaging the other party. Important elements leading to dark side behavior include dishonesty and a lack of understanding of unfairness perceptions that leads to exploitation and discrimination of customers.
On the whole, the subject of IoT in marketing and dark side in particular requires more research, as practitioners, academics and policy makers do not appear to have examined the long-term economic and customer impact of IoT and especially its dark side activities. We hope that you will enjoy our special issue:
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