The forthcoming Artificial Intelligence (AI) revolution: Its impact on society and firms

The impact of the industrial and digital (information) revolutions has, undoubtedly, been substantial on practically all aspects of our society, life, firms and employment. Will the forthcoming AI revolution produce similar, far-reaching effects? By examining analogous inventions of the industrial, digital and AI revolutions, this article claims that the latter is on target and that it would bring extensive changes that will also affect all aspects of our society and life. In addition, its impact on firms and employment will be considerable, resulting in richly interconnected organizations with decision making based on the analysis and exploitation of “big” data and intensified, global competition among firms. People will be capable of buying goods and obtaining services from anywhere in the world using the Internet, and exploiting the unlimited, additional benefits that will open through the widespread usage of AI inventions. The paper concludes that significant competitive advantages will continue to accrue to those utilizing the Internet widely and willing to take entrepreneurial risks in order to turn innovative products/services into worldwide commercial success stories. The greatest challenge facing societies and firms would be utilizing the benefits of availing AI technologies, providing vast opportunities for both new products/services and immense productivity improvements while avoiding the dangers and disadvantages in terms of increased unemployment and greater wealth inequalities.     

Informational society

The coming technology of automation, communications, and information processing, contributing to a new “social nervous system”, is discussed. The basic assumptions are that in the future, organisations will have no physical location and that man's primary activities will not be traditional work. The article suggests what this would mean for communities, economic organisations, government and the individual, and proposes a utopian institutional structure based on the stated technological assumptions.     

The search for meaning in a changing work context

The nature of work is currently undergoing a complete transformation. In response to economic pressures organizations are reshaping themselves into totally new forms. Information technology is underpinning this transformation by providing the backbone for new organizational structures and new ways of working. The implications of this transformation are far reaching, particularly as the entire concept of work changes. The boundaries which have traditionally existed between organizations, individuals, family, home life and community will disappear as work increasingly becomes situation-independent and centred in the home. Our current understanding of the meaning of work will become increasingly obsolete and therefore will force individuals to search for new meanings of work in their lives. As a result work will take on an entirely different meaning. This article explores the problems of the meaning of work in a context of change. We look forward to a future in which the nature of work as we know it now will have changed beyond recognition. The question we address is this: what will work mean to us in the future?     

The energy outlook: combining the options

Where can we get all the energy we will need for the rest of the century to heat our homes, cool our offices, run our hospitals, and keep our factories going? Not from the conventional sources of energy at home and certainly not from foreign oil, say these authors. According to their calculations, U.S. supplies of oil, natural gas, coal, and nuclear power will be inadequate, and U.S. importation policy has already made us dangerously dependent on the unstable, unpredictable Middle East. To lessen our dependence on imported oil, they say, requires a balanced program of adopting reasonable conservation measures, developing solar power, and producing energy from our usual domestic sources under new incentives.     

New Leadership at the Federal Reserve*

As Chairman of the Federal Reserve for the past 18 years, Alan Greenspan deserves praise for his stewardship of monetary policy. He has guided the Fed and monetary policy in a way that has led to low and stable inflation. But if Greenspan's record clearly deserves praise, he could have done more to move monetary policy into the 21st century and prepare the institution for the future. Greenspan has relied heavily on his personal judgment and has argued repeatedly that the Fed must have extensive flexibility to respond to the economic environment. But if Greenspan's judgment, skill, and luck have served him and the country well, it is dangerous to rely so heavily on the judgment of a single individual. When he departed, he took with him his skill and judgment, as well as his credibility and his personal commitment to low inflation. The Fed he leaves behind has no explicit institutional commitment to long‐run price stability. This article argues that by operating with a set of rules and guidelines, or at a minimum clearly stated institutional objectives, the Fed would eliminate much of the second guessing about what it is doing and why, and the associated volatility in markets. More generally, the benefits of more explicit guidelines for monetary policy include:

• ? Increasing public understanding of monetary policy, including what it can and cannot do.
• ? Increasing transparency and accountability. Most organizations have clear goals and we hold their leaders accountable. The Fed is different. The Fed seems to be held accountable for all things economic and thus it is truly accountable for nothing. It never has to explain its actions and what went right or wrong.
• ? Establishing a clear focus for the Fed regarding its goals and objectives.
• ? Creating increased confidence that sound monetary policy will be followed in the future.

     

Man,the city and the automobile in the future

The present day city mirrors the internal conflict of modern man. He wants to live in towns and preferably in towns which are pleasant to live in. But, at the same time, he does not wish to be deprived of his car and indeed cannot do without it. Yet the present day automobile has shown itself to be incompatible with the city, or at least with a city that is good to live in. Is there any hope of resolving this dilemma in the next generation, the 26 years which will take us to the year 2000, without endangering a powerful automobile industry, probably vital to the survival of our industrial society, and without destroying our civilisation which is essentially a civilisation of town dwellers ?     

When paranoia makes sense

On September 11, 2001, in the space of a few horrific minutes, Americans realized the fragility of trust. The country's evident vulnerability to deadly terrorism rocked our faith in the systems we rely on for security. Our trust was shaken again only a few months later with the stunning collapse of Enron, forcing us to question many of the methods and assumptions underpinning the way we work. These two crises are obviously very different, yet both serve as reminders of the perils of trusting too much. The abiding belief that trust is a strength now seems dangerously naive. This new doubtfulness runs contrary to most management literature, which has traditionally touted trust as an organizational asset. It's an easy case to make. When there are high levels of trust, employees can fully commit themselves to the organization because they can be confident that their efforts will be recognized and rewarded. Trust also means that leaders don't have to worry so much about putting the right spin on things. They can act and speak forthrightly and focus on essentials. In short, trust is an organizational superglue. Nevertheless, two decades of research on trust and cooperation in organizations have convinced social psychologist Roderick Kramer that--despite its costs--distrust can be beneficial in the workplace. Kramer has observed that a moderate form of suspicion, which he calls prudent paranoia, can in many cases prove highly beneficial to the distrustful individual or organization. In this article, he describes situations in which prudent paranoia makes sense and shows how, when properly deployed, it can serve as a powerful morale booster--even a competitive weapon--for organizations.     

Failing by design

It's hardly news that business leaders work in increasingly uncertain environments, where failures are bound to be more common than successes. Yet if you ask executives how well, on a scale of one to 10, their organizations learn from failure, you'll often get a sheepish "Two-or maybe three" in response. Such organizations are missing a big opportunity: Failure may be inevitable but, if managed well, can be very useful. A certain amount of failure can help you keep your options open, find out what doesn't work, create the conditions to attract resources and attention, make room for new leaders, and develop intuition and skill. The key to reaping these benefits is to foster "intelligent failure" throughout your organization. McGrath describes several principles that can help you put intelligent failure to work. You should decide what success and failure would look like before you start a project. Document your initial assumptions, test and revise them as you go, and convert them into knowledge. Fail fast-the longer something takes, the less you'll learn-and fail cheaply, to contain your downside risk. Limit the number of uncertainties in new projects, and build a culture that tolerates, and sometimes even celebrates, failure. Finally, codify and share what you learn. These principles won't give you a means of avoiding all failures down the road-that's simply not realistic. They will help you use small losses to attain bigger wins over time.     

Employment and innovation in advanced communication technologies: Strategies for growth and the growth of employment

If recent political interest and media hype is to be believed, the ‘information society’ is at last upon us, and could signal the end of work as we know it. But what evidence is there of how these new information highways will change work? In this article, based on recent case-study research, a set of messages about how organizations are applying and responding to the new advanced communication technologies are presented. First, innovation was most successful where managers sought to mobilize the new potential of these technologies, rather than implementing rationalization and retrenchment. Second, in order to reap these benefits, it was necessary to adapt organizationally as well as to adopt the technology. Third, one innovation strategy is not good for all situations: the way forward is dependent on the current situation of the organization, rather than on general principles.     

The set-up-to-fail syndrome

Why do some employees perform poorly? Most managers would answer that question by ticking off a list that includes weak skills, insufficient experience, inability to prioritize assignments, and lack of motivation. In other words, they would contend that poor performance is the employee's fault. But is it? Not always, according to the authors. Their research with hundreds of executives strongly suggests that it is the bosses themselves--albeit unintentionally--who are frequently responsible for an employee's subpar achievement. According to the authors, bosses and their perceived weak performers are often caught in a dynamic called the set-up-to-fail syndrome, which tends to play out as follows: A boss begins to worry when a subordinate's performance is not satisfactory. He then takes what seems like the obvious action by increasing the time and attention he focuses on the employee. But rather than improve the subordinate's performance, the increased supervision has the reverse effect. The subordinate, in perceiving the boss's lack of confidence in him, withdraws from his work and from the boss. And the relationship spirals downward. What is a boss to do? First, he must accept the possibility that his own behavior could be contributing to the problem. Second, he must plan a careful intervention with the subordinate that takes the form of one or several candid conversations meant to untangle the unhealthy dynamics in the relationship. The intervention is never easy, but the time and energy invested in it usually yields a high payback.     

The five messages leaders must manage

If you want to know why so many organizations sink into chaos, look no further than their leaders' mouths. Over and over, leaders present grand, overarching-yet fuzzy-notions of where they think the company is going. They assume everyone shares their definitions of"vision;" "accountability," and "results". The result is often sloppy behavior and misalignment that can cost a company dearly. Effective communication is a leader's most critical tool for doing the essential job of leadership: inspiring the organization to take responsibility for creating a better future. Five topics wield extraordinary influence within a company: organizational structure and hierarchy, financial results, the leader's sense of his or her job, time management, and corporate culture. Properly defined, disseminated, and controlled, these topics give the leader opportunities for increased accountability and substantially better performance. For example, one CEO always keeps communications about hierarchy admirably brief and to the point. When he realized he needed to realign internal resources, he told the staff: "I'm changing the structure of resources so that we can execute more effectively." After unveiling a new organization chart, he said, "It's 10:45. You have until noon to be annoyed, should that be your reaction. At noon, pizza will be served. At one o'clock, we go to work in our new positions." The most effective leaders ask themselves, "What needs to happen today to get where we want to go? What vague belief or notion can I clarify or debunk?" A CEO who communicates precisely to ten direct reports, each of whom communicates with equal precision to 40 other employees, aligns the organization's commitment and energy with a well-understood vision of the firm's real goals and opportunities.     

Presidential Address: The Cost of Active Investing

I compare the fees, expenses, and trading costs society pays to invest in the U.S. stock market with an estimate of what would be paid if everyone invested passively. Averaging over 1980–2006, I find investors spend 0.67% of the aggregate value of the market each year searching for superior returns. Society's capitalized cost of price discovery is at least 10% of the current market cap. Under reasonable assumptions, the typical investor would increase his average annual return by 67 basis points over the 1980–2006 period if he switched to a passive market portfolio.     

The end of corporate imperialism

As they search for growth, multinational corporations will have no choice but to compete in the big emerging markets of China, India, Indonesia, and Brazil. But while it is still common to question how such corporations will change life in those markets, Western executives would be smart to turn the question around and ask how multinationals themselves will be transformed by these markets. To be successful, MNCs will have to rethink every element of their business models, the authors assert in this seminal HBR article from 1998. During the first wave of market entry in the 1980s, multinationals operated with what might be termed an imperialist mind-set, assuming that the emerging markets would merely be new markets for their old products. But this mind-set limited their success: What is truly big and emerging in countries like China and India is a new consumer base comprising hundreds of millions of people. To tap into this huge opportunity, MNCs need to ask themselves five basic questions: Who is in the emerging middle class in these countries? How do the distribution networks operate? What mix of local and global leadership do you need to foster business opportunities? Should you adopt a consistent strategy for all of your business units within one country? Should you take on local partners? The transformation that multinational corporations must undergo is not cosmetic--simply developing greater sensitivity to local cultures will not do the trick, the authors say. To compete in the big emerging markets, multinationals must reconfigure their resources, rethink their cost structures, redesign their product development processes, and challenge their assumptions about who their top-level managers should be.     

How much work?

The future of work is a constant topic of discussion. This article approaches it with the deceptively simple notion of demand and supply: how much work is required to yield a reasonable standard of living? And how much work would people prefer to put in? Answers are given from two studies of a mature Welfare State, Sweden. The answers also point to the following underlying questions: What are the driving forces behind the present pattern of work? Is there a lagging self-understanding about needs, risks and possibilities in our type of society?     

The case of the hidden harassment

The past year has seen a growing public awareness of sexual harassment in the workplace. The question of what constitutes sexual harassment and how to recognize it has been debated in the news, the courts, and Congress. This HBR case study is less concerned with defining it than with examining what a manager should do about it. When Filmore Trust manager Jerry Tarkwell found out one of his employees was being sexually harassed on the job, he thought he knew exactly what to do. Following company policy, he immediately notified the bank's equal employment office. Then he called Jill McNair, the employee being harassed. Her response dumbfounded him. "You had no right to call EEO before talking to me," McNair said angrily. Do you have any idea what could happen to me and to my career if people find out about this?" Tarkwell didn't understand; McNair wasn't to blame. He believed the only person who should be worried was the harasser. Tarkwell tried to spell out the procedure for her. "All you have to do is write a letter and ..." McNair cut him off. "If this gets investigated by EEO, everyone in the building could be questioned. I'll probably get transferred, and then I won't have a chance at promotion. And who'd want to work with me? Every man in the company would be afraid I'd report him if he so much as opened a door for me."(ABSTRACT TRUNCATED AT 250 WORDS)     

Do your commitments match your convictions?

How many of us keep pace day to day, up-holding our obligations to our bosses, families, and the community, even as our overall satisfaction with work and quality of life decline? And yet, our common response to the situation is: "I'm too busy to do anything about it now." Unfortunately, unless a personal or professional crisis strikes, very few of us step back, take stock of our day-to-day actions, and make a change. In this article, London Business School strategy professors Donald Sull and Dominic Houlder examine the reasons why a gap often exists between the things we value most and the ways we actually spend our time, money, and attention. They also suggest a practical approach to managing the gap. The framework they propose is based on their study of organizational commitments--the investments, promises, and contracts made today that bind companies to a future course of action. Such commitments can prevent organizations from responding effectively to change. A similar logic applies to personal commitments--the day-to-day decisions we make about how we allocate our precious resources. These decisions are individually small and, therefore, easy to lose sight of. When we do, a gap can develop between our commitments and our convictions. Sull and Houlder make no value judgments about the content of personal commitments; they've devised a somewhat dispassionate tool to help you take a thorough inventory of what matters to you most. It involves listing your most important values and assigning to each a percentage of your annual salary, the hours out of your week, and the amount of energy you devote. Using this exercise, you should be able to identify big gaps--stated values that receive little or none of your scarce resources or a single value that sucks a disproportionate share of resources--and change your allocations accordingly.     

COMPETING IDEOLOGIES IN THE ACCOUNTING AND INDUSTRIAL RELATIONS ENVIRONMENT

Despite differences in approaches towards ‘accounting and industrial relations’, there have been few attempts to record those differences systematically or to locate them within a conceptual framework. This paper documents the diversity among actors in the accounting and industrial relations environment, situates it theoretically and considers its implications for policy and practice. ‘Differences’ are shown to have persisted across time and to transcend national boundaries. Building on previous studies, a framework is presented to explain observed differences in terms of differences in underlying ideologies, based on varying sets of assumptions about society and organizations. Unitarist, pluralist and radical assumptions are seen to lead to different conceptualizations of the management–labour relationship and different sets of ‘problems’ and conclusions concerning the ends served by the disclosure of accounting information to employees and labour representatives. It is also argued that the ideologies identified incorporate competing knowledge interests and involve distinct modes of rationality.     

A dream of ease: Situating the future of work and leisure

This paper represents something of a history of the future. It seeks to examine, in the context of the USA and Britain, debates over the future of work that have taken place during the 20th century, and have continued into the 21st. Such debates, often classics of the futurological genre, might be caricatured as fantastic predictions of a leisured utopia, but are often in fact both more sober, and more nuanced, than such a depiction would suggest. The present paper will explore the common themes that structure future of work debates, and discourses of the future of work will be placed in social and historical context. Most importantly, the paper will uncover commonalities in understandings of what it means to be creative and free in modern society, understandings that are central to the future of work, and indeed the future in general. The paper will, in conclusion, addresses the possible reasons for a decline in predictions of a leisured future, and a growing awareness amongst commentators that work is very much here to stay.     

Africa's dilemma in the transition to the new information and communication technologies

The emergence of the new information and communication technologies (ICTs) has dramatically altered theoretical and practical assumptions about the role of the communication media in socioeconomic development. Today, the role of ICTs in developed and developing societies remains a subject of debate, and Africa has been caught in the middle of this debate. Advocates of ICTs, for instance, point to how the West experienced the impact of industrial technology and found it to be an indispensable tool for development. If the new technologies are good for the West, will the same hold true for the developing world? For Africa, the question is a difficult one: will the new information and communication technologies launch Africa on the path of socioeconomic development or will they subject Africa to a new form of dependence? This article argues that the communication technology which will be adopted by Africans, irrespective of how the West moves, will be the one that is easily accessible and which poses no challenge to sociocultural practices. That communication technology of the future will be the telephone.     

Looking ahead: implications of the present

On its seventy-fifth anniversary, HBR asked five of the business world's most insightful thinkers to comment on the challenges taking shape for executives as they move into the next century. In "The Future That Has Already Happened," Peter Drucker examines the effects of the increasing underpopulation of the world's developed countries. With growing imbalances in labor resources worldwide, he writes, executives in the developed countries will need to improve the productivity of knowledge and of knowledge workers to maintain a competitive advantage. Esther Dyson's article "Mirror, Mirror on the Wall" reveals the mind shift executives will need to make in a networked world, where companies will be known for what they do rather than for what they say. Executives will have to respond openly and intelligently to feedback about their organizations. The old language of property and ownership no longer serves executives, writes Charles Handy in "The Citizen Corporation." The corporation should be thought of no longer as property but as a community, where members are regarded as citizens. Technology has given executives more information than today's machines can help them understand, explains Paul Saffo in "Are You Machine Wise?" Machine-wise executives will know when to turn their computers off and take their own counsel, he writes. Peter Senge's article "Communities of Leaders and Learners" urges executives to reject the myth of leaders as isolated heroes and instead to build a community of leaders. Sustained institutional learning, he writes, requires organizations to reintegrate their typically fragmented learning processes.