Artificial intelligence (AI) is increasingly able to make decisions in complex situations. Digital machines are replacing all kinds of human tasks, whether repetitive, specific, manual or cognitive.

Xavier Ferràs

There is, however, a worrying dark side to this potent force. We are increasingly bombarded with news stories on the way machines may threaten jobs — something that has huge implications for modern capitalist society. 

Robots are eliminating jobs in factories, warehouses and customer service centres at an accelerating pace.

The future of work will be shaped by digital automation, which may open the door to hyper-productive corporations without employees. But with ever-greater AI capabilities, the future could also be one that dispenses with human management.

With intelligent automation, managers at various levels may become redundant

With intelligent automation, managers at various levels may also become redundant. We could well see data-processing networks making decisions and sending electronic instructions to the corporate structure round the clock. What better than an intelligent algorithm to analyse data and to make decisions in Marketing, Human Resources, Operations, and Finance?

The electronic CEO

We might even have a future ‘Digital CEO’ (just an algorithm) that would continuously analyse all worthwhile information on the news, review customer comments on social networks and supervise internal production indicators.

This electronic CEO would give the right orders to manufacturing plants to maximise corporate results. The entire management could be replaced by a digital machine that would learn all by itself and become more productive with every passing day.

Given this backdrop, many questions arise that go far beyond just the economic implications of AI. How will artificial intelligence affect the practice of management itself?

Operations management and strategy

Machines are clearly superior in the interpretation of big data, pattern identification, error prevention and subsystem coordination. Management processes that are strongly based on logic, statistics, and rational decision-making will soon be performed much better by intelligent algorithms.

This will obviously soon be the case in the fields of Operations Management, where decisions and policies bearing on stock management, procurement, supply chains, production planning, quality control, distribution logistics, all require a high level of mathematical reasoning.

Artificial intelligence
Artificial intelligence machine in a factory (Photo: iStock)

This is also the case in Financial Management. Once the strategy is defined and the corporate objectives are set, machines can be left to get on with implementing the strategy all by themselves.

Under these models, not only will production lines be robotised but so too will Operations Management in those fields that are highly susceptible to automation.

Will robots replace managers?

Leadership is an example of a very human activity – it requires understanding and interpretation of emotions (your own and those of others). It is an activity that needs interaction among people, recognition of individual needs, and the use of this recognition to guide teams toward achieving defined goals.

Artificial intelligence still lacks the emotional skills to successfully complete interactions with people

Can a robot be a leader? MIT researchers show that it would not be difficult for people to receive robot instructions. People could accept a robot as a boss.

But it is one thing to give cold instructions to a human team mate and quite another to lead people, to have the emotional ability to guide a team in VUCA (Volatile, Uncertain, Complex and Ambiguous) situations. To do so, trust must be forged — something for which emotional skills are needed.

Although artificial intelligence is highly capable when it comes to, say, determining the key characteristics of a product to be launched in a particular market, or in diagnosing some types of cancer, AI still lacks the emotional skills to successfully complete interactions with people (for instance, creating brands with emotional values, persuading a customer, negotiating a major contract, or communicating a serious illness in a medical process).

Machines cannot assume the functions of institutional representation. Could a machine act as a company’s institutional representative? Could it have legal responsibilities? Could a machine even be the owner of a business or, say, a patent?

It is likely that processes that involve persuasion, leadership, institutional relations, and ownership will resist the encroachments of artificial intelligence better.

This article is based on research published in the Journal of Management Inquiry.

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