The impact of technology on company management cannot be measured only by the number of automated tasks. Work-coordination tools can move decision-making closer to teams and reduce the need for some control layers. At the same time, new management work emerges: managing collaboration between people and AI, developing employee capabilities and defining the boundaries of automation.
When introducing AI, companies often ask which activities can be automated and how much time employees will save. From a management perspective, however, a second question is more important: how will technology change the way work itself is organized?
INSEAD uses the term OrgTech for technologies that affect the division of work, team coordination, the allocation of decision rights, performance control and the handling of exceptions. Research cited by INSEAD shows that shared work-management tools can reduce the intensity of managerial supervision and support decentralization. In other words, digitalization does not have to merely speed up the work of the current structure. It can call into question the reason why some parts of that structure exist.
Imagine a process in which an employee previously gathered information, passed it to a supervisor and the supervisor decided how to proceed. If a new system makes the same data directly available to the employee and at the same time allows them to decide within a predefined scope, only the tool has not changed. The place in the organization where the decision is made has changed.
This does not mean the automatic end of managers. But the work it makes sense to ask them to do is changing. Phanish Puranam of INSEAD mentions the possibility that managers will function more as teachers who develop the capabilities of their subordinates and as coordinators of the division of work between people and AI systems. Determining which part of a process should be handled by a person, which by technology and when a decision needs to be taken back can itself become a distinct management capability.
When introducing new technology, it is therefore practical to draw not only a process map of “before” and “after” but also a map of authority. At each step, ask four questions: who has the information, who proposes the decision, who can approve it and who is accountable for the result. Only then will you see whether the new system is genuinely simplifying the organization or merely automating the old hierarchy.
A second risk is excessive centralization. Technology may allow leadership to monitor ever more work in greater detail. That does not mean it is appropriate to move all decisions upward. The same technology can instead enable people closer to the problem to decide independently because they have access to information that previously only management possessed.
INSEAD also reminds us that an organization is not only a machine for achieving a goal. It is also an environment in which people gain experience and a sense of meaning from their work. A more efficient digital structure is therefore not automatically better if it simultaneously removes mechanisms for learning, accountability or collaboration.
KEY TERMS
- OrgTech: Technology that changes the way coordination, decision-making and the division of work are organized.
- Management intensity: The extent of supervision, coordination and decision-making that requires a separate management layer.
- Decentralization: The movement of decision-making authority closer to the people dealing with the specific problem.
- Human–AI division of work: The allocation of tasks, authority and accountability between employees and artificial-intelligence systems.