The First Industrial Revolution transformed economies and societies by replacing much manual and home-based production with mechanised factory work. Innovations in textiles, steam power and manufacturing dramatically increased productivity, but they also reorganised labour, concentrated workers in factories and shifted control over how work was structured and performed. ‘The question is not simply whether technology made companies more efficient and productive’ says Muskan. ‘It also changed decision-making: who makes decisions, what motivates them and whose interests are served.’
According to Muskan, today’s rise of AI and other digital technologies, often described as part of the Fourth Industrial Revolution, raises similar questions across the wider business world. ‘These technologies do not merely introduce new tools,’ she explains. ‘They can also reshape power inside organisations and societies at large.’
Decentralisation
Muskan’s research includes an examination of decentralisation over a period of around thirty years. Decentralisation refers to how independently and autonomously an employee or team can work within a company. ‘People want to be independent. They would even choose to be paid less if it meant gaining more freedom in their work.’ For companies, decentralisation often yields significant benefits. ‘It leads to increased productivity and innovation. This is particularly true for companies operating in dynamic and competitive environments.’
She analyses data from a large number of German companies, varying in size, from diverse sectors and spread across the whole country. Her research shows that decentralisation is declining, which runs counter to the early evidence in organisational economics. ‘For decades, it was assumed that technologies led to the democratisation of decision-making within companies,’ explains Muskan. ‘The advent of computer hardware and legacy systems did indeed enable employees to work more independently and make decisions in numerous areas. However, since 2010, a shift has been taking place. This is due to new software technologies, such as AI, robotics and cloud computing. As a result, monitoring employees is easier and companies are increasingly steering towards less decentralisation.’
Career opportunities
In another study, she examines the impact of new technologies on an individual’s career opportunities. She focuses on middle management. ‘The prediction was that these management roles would disappear, but it is more accurate to say that they are being reshaped. Within these roles, the focus is increasingly shifting towards coaching and leadership. AI is increasingly taking over the coordination of tasks and the processing of information.’
Her findings show that companies adopting information and communication technologies experience higher turnover among middle managers. However, these technologies do not create equally strong promotion opportunities: the estimated effect on turnover is around ten times larger than the estimated effect on promotion. It is also striking that older middle managers do not appear to be at greater risk of losing their positions and that those with higher educational qualifications have many opportunities in these roles, with prospects for promotion still available. It has become easier for women to enter middle-management roles, but moving further up the hierarchy remains difficult. ‘We find they do not experience a “sticky floor”, but the glass ceiling is still there.’ This shows that technology does not simply flatten hierarchies within organisations. ‘It can renew them in less visible, but no less far-reaching ways.’
Not neutral
The key message emerging from her two studies is that technology is not neutral. ‘It is still often thought that technological tools are objective, that their use by definition leads to greater democracy and inclusivity within companies, but the reality is far more complex,’ says Muskan. ‘In many cases, it primarily reinforces existing power structures within companies.’ If you want to move towards greater equality in the business world, you need to be aware of how the technologies work. ‘Knowledge and technology go hand in hand. Whoever controls the knowledge holds the power and determines the future.’ Muskan cites bias as an example. ‘If the person deploying the technology has certain biases, or if the training data used for AI contains biases, this can lead to biased outcomes.’
Taking matters into your own hands
According to Muskan, democratic decision-making is indeed possible in these technological times, but it requires regulation from the European Union. In addition, individual employees must take an informed stance towards AI and other technologies. She is keen to emphasise this: you have a say in it too. ‘These major developments aren’t as bleak as is sometimes claimed, but awareness is needed. If you inform yourself and learn about it, you can have more influence over it. That way, you can ensure that AI works with you, not against you.’
She explores AI herself, for example in relation to the courses she teaches. ‘Otherwise, I wouldn’t be able to assess the students, because I wouldn’t know what they had and hadn’t done themselves in their text. Nor would I have a clear idea of what key skills they need to master.’
Muskan is optimistic about the future. ‘AI can’t do everything. Tasks will change, but that will also bring something new. We will start to place greater value on social skills. In any case, our foundation remains critical thinking and empathy. That won’t disappear from humanity; it will always be necessary.’
Text: Willem Claassen