The Impact of Artificial Intelligence on

Management

Prepared by
✓ KOSSIR Ismail
✓ EL IDRISSI Zakaria
✓ SENBLI Nour
✓ AJARNIJI Halim
✓ Rida El BATOULI
Supervised by
✓ Mr WAHABI

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This research focuses on the impact of advancing Artificial Intelligence systems on management
during the next decade. Much of the attention around Artificial Intelligence and work revolves
around the replacement versus augmentation debate. According to previous literature, rather than
simply replacing tasks, machine learning tools can complement human decision making. Based on
semi-structured expert interviews, this research provides tentative evidence that this may be true for
managers on the highest level of organizations, but perhaps less so for operational and middle
managers who may find a larger number of their tasks replaced. As routine tasks of supervision
and administration can be automated, the shift towards interpersonal tasks of leadership could
continue for many managers. Two possible future scenarios are formed to illustrate how Artificial
Intelligence may possibly impact management. In addition, algorithmic management is recognized as
an important factor in the next decade as platform economy keeps growing. Having potential to
replace tasks of the operative managers, it is important to continue research on fairer algorithmic
management. Also, for further studies it is recommended to evaluate AI's impact on each level of
managers separately, because of the disparate work tasks of operative, middle and senior managers.

➔ Literature review

✓ AI
McCarthy, Minsky, Rochester and Shannon (1955, 11) defined Artificial Intelligence as action
performed by a machine that would be considered intelligent if done by hu-man. AI is considered a
hypernym to developments within it, such as machine learning and deep learning. Many more narrow
definitions exist, but for the purposes of this study, if a machine is able to perform a task previously
done by a human manager, it is considered as artificial intelligence.
In its history of over 60 years, AI has seen multiple cycles of initial excitement followed by eventual
disappointment. In the beginning of these cycles, recent advancements led to claims such as that
effectively every single human task could be performed by a machine in just a few years
According to Remes (2018, 32-39) the rapid adaptation of AI programs in various industries during
the last ten years has happened because programmers now have enough data and computing power to
develop deep learning systems, based on the neural network research of previous decades.
✓ Management
Management is the coordination and administration of tasks to achieve a goal. Such administration
activities include setting the organization’s strategy and coordinating the efforts of staff to accomplish
these objectives through the application of available resources. Management can also refer to the
seniority structure of staff members within an organization.
➔ Analysis
What is the Impact of Artificial Intelligence on Management?
 There has been some conversation about what the advent of novel technology means for
managers. A study by Frey and Osborne (2013, 40-45) claims that while workers in many
fields are in a high risk of automation, managers are less likely to be replaced as their work
consists of tasks demanding social intelligence.
 Similarly, as Pulliainen (2019, 84) states in her thesis, many senior level managers are not
worried about replacement as they see AI as a complementary tool, they can use to be more
efficient.

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  Other studies support this augmenting view as well. Jarrahi (2018, 577) highlights the
potential of an AI system with vast computational capability paired with the more holistic
intuition of a human manager.
 Autor (2015, 5) claims that historically scholars and journalists alike have overstated the
labour replacing power of advancing technology, while missing that automation also augments
human skills, creates new work tasks and increases productivity and demand.
 Still according to Makridakis (2017) some people in the field of AI claim that this time it is
different, as task after task can be replaced. People supporting this revolutionary view of AI
maintain that as far as demand for their labour, most workers of today are comparable to
horses at the end of the 19th century. While optimists among this group believe that in the end
this increased productivity will create a utopia for all, pessimists fear that it will lead to a
dystopia for most. (Makridakis, 2017.)
 Arntz, Gregory and Zierahn (2016, 4) point, it is quite unlikely that in the near future every
single task performed in an occupation could be automated. For example, even if one day self-
driving trucks replace drivers, human drivers may still be needed for other tasks such as
loading and offloading goods.
Based on the literature, AI can impact managers directly by replacing or augmenting certain
work tasks. AI can also affect managers indirectly by causing changes in their working
environment. Therefore, the effects of AI can be divided to four levels: global level, level of
society, level of organizational structure and level of managers work tasks.
Article 1: Study focuses on the impact of advancing Artificial Intelligence systems on
management during the next decade

Research strategy in this study is qualitative and interpretative (Eskola and Suoranta, 1998). The
empirical data consists of six semi-structured thematic interviews (Kovalainen and Eriksson, 2008).
The interviewees have been chosen using purposeful sampling (Patton, 2002). Using knowledge
and expertise of AI as the requirement for participation, a high ranking group of authorities in
research, data science and consultancy were selected. As part of the ethical guidelines, the
participants were asked for the permission to record and transcribe the interviews. The interviewees
were also granted anonymity to allow the expression of personal opinions independent of affiliation.
Therefore, the informants’ identities are codified and in the analysis section they are referred to as
Experts 1-6. A similar set of questions were given to each expert, still providing freedom for the
interviewee to focus on the aspects they saw most important on each topic. The questions are based
on 1. How AI can replace managers’ work tasks during the next decade and 2. How much AI can
replace managers’ work tasks during the next decade

Based on the empirical evidence, the expert opinion on the impact of AI on management can be
roughly split into two groups: revolutionary and evolutionary.
➢ Revolutionary view

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The revolutionary group believes that due to the unforeseen capabilities of AI technology,
managers’ work tasks will be greatly affected on all levels. These experts believe machine learning
systems can be used in various white collar work tasks previously thought too difficult to replicate
by machines. After decades of comparatively slow AI development for practical applications, the
possibilities set by computing power have finally caught up with the neural network algorithms of
old, leading to the breakthroughs of the last decade (Remes, 2018, 32-39). Some of the experts
expect that the rate of change starts to grow exponentially in the coming years.

Expert 3: It is all about training. The pace of training the learning models starts to grow
exponentially. In ten years I believe AI can teach AI and the exponential curve gets steeper.
Based on human managers’ history it is possible to make good conclusions, forecasts and finally
decisions. That’s why I believe management as it is now understood can be quite light when it
comes to humans. Ma-chines will be able to do almost all decisions and can make more logical
insights based on better algorithms than humans can alone

As the capabilities of AI systems grow larger, some of the experts suggest that managers should
focus more on understanding the technology. Many of them also suggest that positions such as
Chief Technological Officer will become more important in the future.

Expert 1: Managers must increasingly think on how they use their time. Managers should
probably be some in AI courses learning those tools more, instead of getting involved with
routine or detail management. They should focus more on the big picture and focus on mastering
A.I and robotics technology.

➢ Evolutionary view
The evolutionary group believes that even though AI may impact managers in many ways, even
replace some tasks, it will not cause any unforeseen changes in managers’ work. They believe that
while machine learning systems can automate some repetitive managerial tasks, the focus will
merely shift to softer leadership skills. These tasks of motivation and encouragement are arguably
harder to automate.

Expert 6: You don’t have to manage routines and processes. Instead it will be managing human
capacity, interaction and empathy. In the narratives there’s been a lot about soft leadership skills.
This I believe will be more common, leading individuals.

This view of the second group is consistent with Laitinen’s (2018, 45) claim that we live in a
society of work, in which political, cultural, social and economic factors define the meaning of
work for the individual – while technology only defines what work is done within these parameters.

Perhaps unsurprisingly, most of the interviewed experts believe that AI’s impact is higher on
operative and middle managers than on senior managers. On average the experts estimate that
during the next ten years a third of the work tasks of operative and middle managers can be
automated. For the senior managers the assumption is that slightly less than a quarter of the work
tasks can be replaced by different AI methods. The interviewees explain that the two lowest levels
of management contain more repetitive tasks of supervision that are easier to automate.

Expert 2: Automating operative tasks, such as administration, synchronising timetables, filling

Expert 5: The tasks that can be replaced are administrative, for example if you have a factory
manager that uses a lot of time to adjusting duty schedules. And usually you should as it’s not
very difficult. And if it saves half of a managers working hours, it is quite a valuable thing. I
think that type of administration, excel optimisation and managing different matters will decline

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 radically. How much it can replace a manager depends obviously on how much their work con-
sists of that type of tasks.

Unlike the others, one of the experts believes that in the future, the impact of AI may be greater on
the highest level of management. This is based on the idea of automated decision making: with
enough data on human managers’ decisions and their consequences, machine learning programs can
be trained to select the most desirable decision for each situation. Meanwhile this expert believes
that when dealing with the challenges of leading the workforce, an algorithm may not be enough.

Expert 3: In operative management you need things that a computer cannot re-place. Hands-on
teaching, especially in human resource management. AI can’t analyse a person in ten years as
well as another human being.

Most of the other experts also believe that while the repetitive tasks can be replaced, managers can
use more of their time to focus on tasks demanding softer leadership skills. Even though many tasks
can be replaced, leadership is still necessary.

 In light of the data, it seems that the impact AI may have on operative and middle
management during the next decade may be somewhat understated. For senior managers
however, the impact may be one of augmentation.
 With technology such as automated decision making and dashboards that provide real time
information, a smaller number of managers may be needed for supervisory and administrative
tasks. Still, most of the interviewed experts stress the increasing importance of interpersonal
leadership. Managers of any level excelling in soft leadership skills may be in higher demand
in the near future, which corresponds to the longer progression of leadership shifting away
from the scientific management of last century, demonstrated by Auvinen (2017).

Jobs that are at risk of being displaced or significantly impacted by artificial intelligence (AI)

Article 2: The Impact of AI and Machine Learning on Job Displacement and Employment
Opportunities Rudra Tiwari
• According to Frey and Osborne (2017), nearly half of all jobs in the US are at high risk
of being automated in the next two decades. They found that jobs in transportation and
logistics, office and administrative support, and production are among the most susceptible
to automation.
• Autor (2015) cites data from the US Bureau of Labour Statistics, which shows that jobs
requiring routine tasks, such as data entry and assembly line work, have declined
significantly in recent decades, while jobs requiring non-routine tasks, such as problem-
solving and decision-making, have increased.

The following is a list of jobs that are at risk of being displaced or significantly impacted by
artificial intelligence (AI):
1. Data Entry Clerks: AI can automate data entry tasks more efficiently and accurately.
2. Telemarketers: AI-powered chatbots and automated calling systems can handle customer
interactions.

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3. Toll Booth Operators: Automated toll collection systems are replacing human operators.
4. Manufacturing Workers: Robots and automation are increasingly used in manufacturing,
reducing the need for manual labor.
5. Bank Tellers: Online banking and ATMs have reduced the demand for in-person transactions.
6. Retail Cashiers: Self-checkout kiosks and automated stores are becoming more common.
7. Library Technicians: Digital cataloging and automated checkout systems are reducing the
need for library staff.
8. Stock Traders: AI algorithms can analyze market data and execute trades faster than humans.
9. Customer Service Representatives: Chatbots and AI-powered customer support systems
handle routine inquiries.
10. Radiologists: AI can assist in medical image analysis, potentially reducing the need for
human radiologists.
11. Legal Assistants: AI tools can perform legal research and document review tasks.
12. Fast Food Workers: Automated food preparation and self-service kiosks are reducing the
demand for manual labor in fast-food restaurants.
13. Agricultural Laborers: Robotics and AI are being used in agriculture for tasks like planting
and harvesting.
14. Textile Workers: Automation has reduced the demand for manual labor in the textile
industry.
15. Accountants and Bookkeepers: AI can handle routine accounting and financial tasks.
16. Customer Support Representatives: AI chatbots and virtual assistants are increasingly used
in customer service.
17. Data Analysts: AI can automate data analysis and generate insights from large datasets.
18. Paralegals: AI can assist with legal research and document preparation.
19. Translators and Interpreters: AI-powered language translation tools are improving,
reducing the need for human translators.
20. Newspaper and Print Media Workers: Digital media and automated content generation
have impacted traditional publishing roles.

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 References

✓ Electronic Journal of Business Ethics and Organization Studies : Impact of Artificial

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