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How Technology Is Changing Work and Organizations

Article · March 2016

DOI: 10.1146/annurev-orgpsych-041015-062352

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How Technology Is Changing Work and Organizations Wayne F. Cascio1 and Ramiro Montealegre2 1The Business School, University of Colorado, Denver, Denver, Colorado 80217; email: wayne.cascio@ucdenver.edu 2Leeds School of Business, University of Colorado, Boulder, Boulder, Colorado 80309; email: ramiro.montealegre@colorado.edu

Annu. Rev. Organ. Psychol. Organ. Behav. 2016. 3:349–75

The Annual Review of Organizational Psychology and Organizational Behavior is online at orgpsych.annualreviews.org

This article’s doi: 10.1146/annurev-orgpsych-041015-062352

Copyright c© 2016 by Annual Reviews. All rights reserved

Keywords

technology, work, organizational change, ubiquitous computing, disruptive technology, OP/OB research review

Abstract

Given the rapid advances and the increased reliance on technology, the ques- tion of how it is changing work and employment is highly salient for scholars of organizational psychology and organizational behavior (OP/OB). This article attempts to interpret the progress, direction, and purpose of current research on the effects of technology on work and organizations. After a review of key breakthroughs in the evolution of technology, we consider the disruptive effects of emerging information and communication technolo- gies. We then examine numbers and types of jobs affected by developments in technology, and how this will lead to significant worker dislocation. To illustrate technology’s impact on work, work systems, and organizations, we present four popular technologies: electronic monitoring systems, robots, teleconferencing, and wearable computing devices. To provide insights re- garding what we know about the effects of technology for OP/OB scholars, we consider the results of research conducted from four different perspec- tives on the role of technology in management. We also examine how that role is changing in the emerging world of technology. We conclude by considering approaches to six human resources (HR) areas supported by tra- ditional and emerging technologies, identifying related research questions that should have profound implications both for research and for practice, and providing guidance for future research.

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ANNUAL REVIEWS Further

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INTRODUCTION

We live in a global world where technology, especially information and communication technol- ogy, is changing the manner in which businesses create and capture value, how and where we work, and how we interact and communicate. Consider five technologies that are transforming the very foundations of global business and the organizations that drive it: cloud and mobile com- puting, big data and machine learning, sensors and intelligent manufacturing, advanced robotics and drones, and clean-energy technologies. These technologies are not just helping people to do things better and faster, but they are enabling profound changes in the ways that work is done in organizations. As Murray (2015, p. 6) contends, “Together these innovations are hurtling us toward a new industrial revolution. Savvy corporate leaders know they have to either figure out how these technologies will transform their businesses or face disruption by others who figure it out first.”

Academic literatures not only in business (Turban et al. 2009, VanHoose 2011), but also in medicine (Demaerschalk et al. 2012, Ross et al. 2010), engineering (Kühnle 2010, Smite et al. 2010), sciences (National Research Council 1999) and social sciences (Castells 1996, Wellman & Haythornthwaite 2002) echo this observation. Barley (2015) suggests that although digital technology is rapidly becoming as infrastructural as electricity, there is surprisingly little research on how it is altering work systems or the work that people do.

The last great wave of technological innovation was all about social interaction. The next one may well feature the emerging general technology paradigm known as ubiquitous computing. This concept is not about one technology. Rather, it reflects information and communication environments in which computer sensors (such as radio frequency identification tags, wearable technology, smart watches) and other equipment (tablets, mobile devices) are unified with various objects, people, information, and computers as well as the physical environment. The combina- tion of these developments is giving us a new kind of world, “one that is hyperconnected and data saturated, a world where an Internet of everyone is linked to an Internet of everything” (Wooldridge 2015, p. 29). These new technologies, disruptive as they are, did not just appear overnight. Rather, many other developments in technology preceded them, and their effects on work and organizations over the past several decades have been far-reaching, as we shall see.

Work is defined here as the application of human, informational, physical, and other resources to produce products/services (Alter 2013). Given the increasing reliance on technologies to get work done within and across organizations, the question of how technology is changing work and organizations is highly salient for scholars of organizational psychology and organizational behavior (OP/OB). If one accepts the premises that work does not exist without people and that OP/OB researchers are inherently concerned with the study of people within organizational settings, then OP/OB bears some responsibility for understanding the effects of technology on work and organizations. Research-based answers have profound implications both for research and practice about the kinds of organizational realities that might be produced. Thus, our goal here is to interpret the progress, direction, and purpose of current research on the effects of technology on work and organizations. Seven broad sections comprise this article. We begin with a review of key breakthroughs in the evolution of technology and its effects on work and organizations. In our second section, we focus on the disruptive effects of emerging information and communication technologies as they create further opportunities to unify physical and virtual workspaces. Our third section examines the numbers and types of jobs affected by developments in technology, and how this will lead to significant worker dislocation. A fourth section considers the effects of technology on how and where we work, including new types of work arrangements and work-life fit. In this section, we consider four technologies in some detail: electronic monitoring systems,

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robots, teleconferencing, and wearable computing devices. In the fifth section, we consider the role of management and how it is changing in the emerging world of technology. The sixth section looks toward the future. In it we consider approaches to six human resources (HR) areas supported by traditional and emerging technologies and identify related research needs. The seventh section provides guidance for conducting future research on the effects of technology on individuals, work, and organizations.

KEY DEVELOPMENTS IN TECHNOLOGY AND THEIR EFFECTS ON WORK AND ORGANIZATIONS

The effects of technology1 over the course of human history are well documented (Beniger 1986, Bradley & Nolan 1998, Bradley et al. 2016). The growth and advancement of civilization can be divided into three eras according to their respective core technological infrastructures: the agri- cultural era, the industrial era, and the digital era. Each of these eras has been profoundly affected by the ability to acquire new information and knowledge. However, they have all required and enabled new economic structures, social revolutions, cultural transformations, and work models.

In the agricultural era, people focused primarily on the use of the power of natural elements, such as wind and water. The most important resources were land, livestock, and agricultural implements. The initiative to gain core economic power was in the hands of the owners of the resources (farmers who owned vast and fertile farm lands). During this era, the owner of the resources also controlled access to proprietary information.

In the industrial era, people concentrated on the application of industrial power, the procure- ment of traditional physical resources, and mass production operating in accordance with the law of increasing costs. That is, once all production factors (land, labor, capital) are at maximum output and efficiency, producing an extra unit will cost more than average. Vapor and steam en- gines, as well as fuel, comprised the core infrastructures. During this era, the richness of material civilization was amplified by increasing the productivity of the physical space—building factories and establishing industrial complexes. The relationships among manufacturers, distributors, and consumers; improved productivity; process efficiency; and attention to transaction costs were all critically important to the success of industrial societies.

In the digital era, people are focusing on the generation and trading of products and services via digitalized data, information, and knowledge. This era is based on an infrastructure comprising in- formation and communication technologies. This new infrastructure is not just helping people do things better and faster than in previous eras, but it is enabling new ways of control, coordination, and collaboration on activities more readily, at lower costs, governed by the law of diminishing costs. That is, because of the properties of digital goods, the cost per unit of marginal or addi- tional output incrementally decreases, whereas the amount of all other factors of production stays constant. As digital resources become accessible, processed, transferred, and stored regardless of location or time, borders and geographical distances are no longer as critical as they once were, and wholly new, invisible electronic spaces are now available.

Because the digital era began with the development of computers and communication tech- nologies, we must appreciate that these technologies are also evolving. Indeed, the continuous

1The English-language Wikipedia includes the following description in its entry on technology: “Technology is the collection of techniques, methods or processes used in the production of goods or services or in the accomplishment of objectives, such as scientific investigation. Technology can be the knowledge of techniques, processes, etc, or it can be embedded in machines, computers, devices and factories, which can be operated by individuals without detailed knowledge of the workings of such things” (http://en.wikipedia.org/wiki/Technology).

www.annualreviews.org • Effects of Technology 351

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Pervasive computers and networks empower/enhance unification of physical

and electronic spaces

Communication technology and enterprise systems empower/enhance

effectiveness of dispersed groups and individuals

Personal computers empower/enhance

productivity of individuals

Mainframe computers empower/enhance

efficiency of physical space

Ubiquitous computing Ubiquitous computing

Strategic computing

End-user computing

Enterprise computing

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Figure 1 Stages of information and communication technology within the digital era.

advances of information and communication technology have enabled the scope of human activity to expand continuously in the electronic space and to create a variety of changes in the ways that economic activity is conducted. Hence, we now need to probe more deeply the four distinctive stages of information and communication technology within this era (Applegate et al. 2002, Cash et al. 1994, McKenney et al. 1995), as shown in Figure 1.

The first stage, enterprise computing, was based on mainframe computers. In this stage, the focus was on improving the efficiency of the physical world by analyzing its characteristics in the electronic space and then modifying the physical space. The administrative model followed was that of a regulated monopoly by centralizing all the computing resources within data-processing centers. Many users shared a single mainframe computer. It was infeasible at that time to supply expensive computing equipment to the multitude of potential users.

The second stage, end-user computing, was based on personal computers. The focus in this stage was on supporting productivity improvements of individuals, particularly business profes- sionals. The administrative model followed was that of a free market enabled by each individual having her/his own personal computer/desktop computer. The notion of “one computer per per- son inside a company” became possible.

The third stage, strategic computing, was based on communication technology. The Internet became a global network of networks as heterogeneous computers and communication interfaces were connected with each other, thereby linking local area networks into a single, large commu- nication network (Hauben & Hauben 1995). Companies combined the Internet and enterprise applications systems (such as enterprise resource planning, customer relationship management, supply chain management, material requirement planning, human resource management, and enterprise-form automation systems) to support business processes and interorganizational activ- ities. The administrative mode adopted was a regulated free market structure like client-server architecture.

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Today, information and communication technology is heading toward a new stage that is based on ubiquitous computing. The concept of ubiquitous computing refers to an environment in which computational technology permeates almost everything, thereby enabling people to access and control their environment at any time and from anywhere. During the beginning stages of the digital era, the dual nature of the environment was such that it did not unify the physical world and electronic space. This new stage, however, focuses on linking the physical world directly with the electronic space, thereby creating a ubiquitous space that allows a level of complexity, speed, and quality not possible before. The goal is to create an optimized space that links people, computers, networks, and objects, thereby overcoming the limitations of both the physical world and the electronic space. The administrative model is collaboration and entrepreneurship. Given that ubiquitous computing is paving the way for a new stage, we now expand on this stage and focus on understanding how it may disrupt the way work is done in organizations.

EFFECTS OF DISRUPTIVE TECHNOLOGY

Christensen (1997) coined the term disruptive technology. He separates new technology into two categories: sustaining and disruptive. Sustaining technology relies on incremental improvements to an already established technology. Disruptive technology lacks refinement, often has performance problems because it is new, appeals to a limited audience, and may not yet have a proven practical application. Although companies today have trouble capitalizing on the potential efficiencies, cost savings, and new opportunities created by ubiquitous computing, its various uses and its portfolio of underlying technologies are expanding. Thus, we analyze here its potential to disrupt the way work is done in organizations.

The term ubiquitous computing was coined by Mark Weiser of the Xerox Palo Alto Research Center in 1998 (see “In Memory of Dr. Mark Weiser” at https://www.parc.com/services/focus- area/ubicomp/ ). In Latin, ubiquitous means being everywhere. Ubiquitous computing incor- porates concepts from the previous stages of information and communication technology development, so its basic elements are software, hardware, networks, and data. The ever-cheaper prices of computers, however, have resulted in the proliferation of computing devices such that now they are nearly everywhere. Here computing devices refer not only to the abundant supply of personal computers, but also to embedded (enabled by microminiaturization) and networked (empowered by increased speed and bandwidth of communication networks) devices. These include industrial sensors and processors, speech-recognition and eye-tracking devices, mobile devices, radio-frequency-identification and near-frequency-communication tags and labels, global positioning systems (GPS)–enabled devices, smart televisions, car navigation systems, drones, wearable sensors, robots, and 3D virtual reality, among others. Initially, the communication interfaces for these various pieces of computing equipment were inconvenient. Over time, however, the development of easy-to-use interfaces and their connection to communication networks have, in turn, brought about new ways of linking people, computers, and objects. This has created further opportunities to unify two separate spaces: (a) the physical space, which has always used information to try to make an inherently inefficient system more efficient, and (b) the electronic space, which has used information to overcome the limitations of the physical space.

The ubiquitous computing infrastructure is also allowing the collection of enormous amounts of structured and unstructured data—creating a need to use the adjective “big” to distinguish this new stage of information and communication technology development. As data have become increasingly digitized, everything from newspapers to music and movies can be produced and reproduced easier via digital technology and transmitted at a lower cost. Furthermore, ubiquitous computing is blurring the boundaries between industries, nations, companies, providers, partners,

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competitors, employees, freelancers, outsourcers, volunteers, and customers. Merging the phys- ical and electronic spaces also has implications for privacy, security, and no less important, how companies are organized. New business models are sprouting up to change the way organiza- tions create and capture value in important ways (e.g., Airbnb, Uber, Zipcar, MyTaxi, Car2go, Duolingo).

The widespread adoption of ubiquitous computing will take time, but the timeline is shrinking thanks to improvements in the underlying technologies mentioned above. No one can predict with certainty all of the ubiquitous-computing innovations that the coming years will bring, and realiz- ing their full potential will not be easy. General predictions herald sizeable changes in knowledge acquisition, sharing and distribution, as well as massive ripple effects in the workplace (Andreessen 2011). We realize that computing in this stage does not manifest itself in a clear-cut form, but rather in a more nuanced manner. We provide here brief examples of some applications of ubiq- uitous computing to stimulate our understanding of how the advent of ubiquitous computing may disrupt work and work systems in organizations:

� As employees wear clothing and other wearables embedded with computer chips and sensors, they no longer need to carry a computer separately to meetings. They are armed with up-to- date information, their decisions are guided by analysis of the information provided by cloud computing, and they can resolve operational issues in creative ways that were not possible before.

� Computer networks allow employees to work from the office, their home, or anywhere. Employees are routinely collaborating with people they have never met, in places they have never visited, and staying connected with the office anywhere and anytime. This has enabled the emergence of ubiquitous working environments supporting different types of working styles and conditions.

� The same computer networks also allow for a variety of devices to be remotely controlled, as well as internal temperature, humidity, lighting, and even the opening and closing of windows.

� Computer programs, intelligent robots, and other devices are used to perform an increasing variety of tasks with a high level of technical skills, and with benefits that include lower costs, higher quality, improved safety, and environmental protection. People, however, par- ticipate in defining, creating, and maintaining these automated programs, machines, and other devices.

� Firms routinely capture publicly available information to monitor traffic conditions. They then use that information to find optimal delivery routes, to track vehicle locations, engine status, dangerous driving conditions, etc.

� Product, sales, and customer information can be monitored in real time, 24 hours a day, so that inventory can be supplemented in a timely manner to maintain freshness or to provide additional products and services.

� Employees can integrate their use of Facebook, Twitter, Google, and other social media into their daily routines, and companies can integrate social media into their intranets, so that they can share internal information and knowledge with employees, and even with suppliers and customers if desired.

� Through the use of smartphones, GPS, earphones, and microphones, employees can access online education and training materials anytime from their own companies, but also from universities in or outside their home countries.

� Attachable devices and microchips can be used to transmit information about wearers’ levels of stress, physical disabilities, or injuries in real time to medical organizations, to facilitate preventive treatment as well as timely responses in emergency situations.

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