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Algorithmic Management in Business Organizations

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Algorithmic Management in Business Organizations

Algorithm management is the transference of managerial roles to an algorithm. The

workplace's management, coordination, and administration functions are either semi- or fully

automated. It is developed through a predictive modeling strategy based on labor norms using

workplace data. Workers' performance, job matching, employees ranking, and workplace

disputes are easily defined, tracked, and solved. Diverse transactions across the disaggregated

workforce are supported using algorithm management as the primary coordination mechanism.

Currently, much focus has been placed on assessing the role of algorithm management to

substitute and complete traditional managerial practices.

Algorithm management has enhanced organizational performance with increased

productivity and efficiency. Automating the traditionally manual tasks has increased the rate of

services and goods production (Jarrahi et al., 2021). Increased production rate has created more

time and resources for the management focused on strategic understanding. For example, the use

of the algorithm in scanning job applications has delivered an efficient recruitment process as

opposed to the traditional manual recruitment processes. Increased performance of both the

managers and employees has ultimately guaranteed high organizational performance.

Algorithms have reduced organizational complexities, thus increasing managerial

decision-making and remote management. Data relating to the various management issues have

been collected and used to formulate data-driven and evidence-based algorithms. Algorithmic

systems have been significant to ensure objective and non-biased decision-making processes in

organizational management (Jarrahi et al., 2021). For example, using algorithms in forecasting

staffing based on relevant data such as customer traffic has ensured its significance in
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determining the scheduling strategy. A combination of algorithms with managers’ intuitions has

proved to enhance the efficiency of the systems.

With the increased adoption of algorithm management, managers have been tasked to

decide the most effective algorithm systems for their organizations. One of the critical factors

that guide the choice of an algorithm system is the intended use, such as departure alerts and

performance reviews. The systems are not designed to replace the human role in decision-

making entirely but instead to encourage new strategies in approaching, understanding, and

acting upon any organizational data or information.

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References

Jarrahi, M. H., Newlands, G., Lee, M. K., Wolf, C. T., Kinder, E., & Sutherland, W. (2021).

Algorithmic management in a work context. Big Data & Society, 8(2).

https://doi.org/10.1177%2F20539517211020332