Critical evaluation on the threat of the combination of Hardware/Software into autonomous Robots to the management of the organization....

1. Critical evaluation on the threat of the
combination of Hardware/Software
into autonomous Robots to the
management of the organization

2. Introduction
Two first waves of Industrial Revolutions have made the large impacts on the
technology and social life, initially the job loss but ultimately the potential
benefits for the humans because of the creation of economic opportunities
and transformation of the society (Avent, 2014). The third great wave goes far
from the industrialization, to focus on the information technology and the mix
of the hardware and software. It also boosts the powers of the autonomous
Robots, or the rise of the “thinking” machines to completely transform the
global economy and workforce (Stewart, 2015). The adoption of the machines
to plan, implement and control the tasks challenges the management of the
humans. That said, at a certain point, when the Robots are powerful to make
decisions, they may replace the people inside an organization. In contrast,
another perspective supposes that the emergence of Robots assists the
development of the organization. It should be considered as the profitable
chance, not the potential threat.
Based on this debate, the objectives of the essay are to evaluate critically the
existence of the Hardware and Software into the autonomous Robots and
recognize whether it threatens the management of the organization or not. It
is noticed that the essay is written in the standpoint of the managers, not the
scientists or the policy makers. The limitation refines the contents of the
essay. Thus, the profitability of the organization along with the management of
the workforce will be two major concerns in the essay. Moreover, the essay
uses the critical literature review as the method to address the debate and
respond to the objectives. Then, in the evaluation, the theories or different
perspectives will be taken into account, including, Ends and Means,
Displacement Theory, Replacement Theory and Substitution. They are
analysed and discussed to identify the supportive or opposite evidences on
the autonomous Robots and management of the organization.

3. Literature review and Critical evaluation
Ends and Means
Firstly, the view of the authors in the Economist about the means and ends to
ease the transition, which takes place because of the integration of the
advanced Hardware and Software with the autonomous Robots, will be taken
into account. The Economist (2014) protects the roles of the humans in the
management of the organization since humans are flexible and adaptable to
the changing world while the Robots or machines seem to be fixed. This point
is the supporting argument to minimize the threats of the combination of the
advanced technology into the Robots. It is also the advantage of the humans
in managing the organization. That said, the mass unemployment due to the
technological world may not occur certainly as ends of the transition. Similarly,
in the perspective of Moniz (2013), the humans and robots may act as co-
workers to reveal their strengths instead of the entire replacement of the robot
in the workforce. Moreover, according to Singh et al. (2013), it is confirmed
that the belief that the robots take away jobs from the employees is untrue
since the advanced technology creates new careers, with which the human
capabilities face limitations such as fast speed and absolute accuracy. It
means even though the autonomous robots offer many favourable
advantages, the threats for the workforce in term of job loss are not accurate.
Nonetheless, except for the job loss, the Economist (2014) notices that the
transition of the third great wave causes the threats on the organizational
structure and the human resource management. Since the employees and the
robots are co-workers (Moniz, 2013), the organizational structure will be
adjusted certainly. The working environment, in which the robots and people
perform tasks smoothly and cooperatively, is necessary to change inside the
organization. The reason is also proved in the study of Singh et al. (2013)
because the robots have been now intelligent and affordable. So, the
organizations can easily add some autonomous robots to their workforces. It
causes the change in the organizational structure.
Apart from the organizational structure, another problem associated with the
transition in the technological world is the inequality in the workforce, between
the less-skilled people and more-skilled people (The Economist, 2014).

4. Hence, while the replacement of the humans by the robots is unreal, the
competition among the humans is fiercer as the consequences of the
transition. The combination of the Hardware/ Software with the autonomous
Robots is a means to strengthen the competitive environment in the
workforce, refine and filter out the capable workers. But, it appears as both
the threat and the opportunity. While the human capital experiences the
inequality in salary and job positions, the chances to access and enjoy the
outstanding and excellent employees are bigger. It is the reason for the
recommendations of the Economist (2014) to invest in the higher education
and implement the suitable policies to balance the labour and deliver the
values of the technology equally. The issues mark the pressures on the
Government. But, in the standpoint of the managers, the opportunities to
recruit the excellent candidates and save costs and time by applying
autonomous robots are the means to the increase profitability.
In general, if considering the transition to the combination of Hardware/
Software into the autonomous Robots as the means and ends, three
evidences are argued. The replacement of the humans by the autonomous
Robots is untrue but the replacement of the less-skilled people by the more-
skilled people is certain. So, the change in the organizational structure
completely occurs. While the threats from the transition are pressures on the
Government, the ends of the autonomous Robots bring many chances for the
managers to enjoy the excellent workforces and advanced technology. The
potential threats for the manager may be the ways to manage the workforce,
which combines the humans and the robots.
Displacement Theory
In another view, the Displacement theory is taken into account. It refers to the
change in the employment in the economy, either in an industry or entire
economy. It is the consequence of the free labour market, in which the supply
and demand interact with each other to determine the labours. According to
Chapple (1999), the displacement addresses the “crowding out” of jobs. The
displacement can be caused directly by the employment programs of the
Government or indirectly via the change in the workforces and the external
environment (Bjorklund et al., 1991). There is still a debate in the free

5. movement in the labour market. In the empirical evidences in Sweden,
Calmfors and Skedinger (1995) identified that the active labour market affects
the employment in different directions. The employee training and
development programs are recognized to be more effective than the job
creations in the free market.
In application of displacement theory to the transition of the advanced
technology and autonomous robots in the management of the organizations, it
is initially recognized that the labour market will be freely pushed and pulled
by the technological level. The addition of the autonomous robots may result
in the crowding out of jobs. According to Cabibihan et al. (2013), autonomous
robots can perform many functions simultaneously and complicatedly while
the humans could not implement successfully. Eventually, in the third great
wave, robots may be not simply the machines to produce the goods, they are
also intelligent and humanoid to think and act like a person (Bogue, 2014).
Thus, the addition of the robots in the workforce with the advantages more
outstanding than the human beings and the accuracy along with speed, will
cause a noticeable issue in the supply of the employees, known as the
combination of the people and the robots. As a result, in the free market, the
demands in the humans to perform tasks decrease and the supply is available
with both the humans and autonomous robots. In application of the
displacement theory, the surplus in the workforce will certainly occur. It
threatens the people in the workforce to be seeking for a career. So, the
perspective of this theory is contrary to the findings in the means and ends
report of the Economist (2014). The likelihood of the replacement of the
humans by the robots is controversial. In the above perspective, the
intervention of the Government is still mentioned, but the displacement theory
appreciates the free movement in the labour market. While the Government
intervention can minimize the situations, in which the workers can find new
jobs via the effective policies and programs, the free labour market moves
flexibly and causes the surplus. It is the reason for the difference in the results
of two perspectives.
Moreover, according to Calmfors and Skedinger (1995), the training is more
effective and successful than the creation of new jobs. It is derived from the
easy elimination of the weak workers in the free market after the transition

6. occurs to create chances for the performance of the autonomous robots. That
said, the displacement theory refers to the elimination of the unnecessary and
ineffective employees without any external interventions. In the management
of the organization, the elimination may lead to the job loss inside the current
workforce. It represents a threat for the managers. The role of the managers
nowadays does not limit to the control of the employees but expands to the
management of the robots and machines.
Replacement Theory
In comparison with the displacement theory, the replacement theory is biased
toward the Marxist perspective. The Marxism believed in the economic base
to build and determine the society (Liodakis, 2010). It concentrated on the
materiality in the relationship among people. In association with this approach,
the replacement theory emphasizes the issue of the replacement of the
machines and men because of the requirement in the efficiency and
effectiveness along with the failure of the existing systems (Bagui et al.,
2012). The replacement process happens when the current issues and people
are less economical to continue performing any more or destroyed by
accidents. It means the rationales for the replacement are derived from both
the pull and push factors. According to Strongman (1984), the application of
this theory is to gain the “approximate optimum” results.
Then, in application to the theory, the combination of the Hardware and
Software into the autonomous Robots pulls the society to achieve the higher
level of the technology and superior products, which consume less energy
and raw materials and require less human efforts. It draws the picture to be in
line with the findings of Bagui et al. (2012) about the efficiency and
effectiveness of the future system. In other words, under the replacement of
the autonomous robots, the managers of the organizations expect to cut
additional costs and boost productivity. Because of this expectation, the
demands on the employees as the human capitals are forced to lower. Such
shift of the demand curve in the labour market decreases the attractiveness of
the human capitals. Thus, the threat on the loss of the jobs of the employees
to be replaced by the positions for the robots is very dangerous. In the view of

7. the Economist (2014), the argument on the competition among the employees
in term of skills is established. In the displacement theory, the active labour
market experiences the combination of the humans and robots as the supply
to threaten the competition of the humans with the robots. Then, in the
replacement theory, the demand side is emphasized. That said, the reason for
the dangerous signals in the transition economy come from the competitions
with the robots and with other employees in the workforce as well as the
expectation of the managers of the organization about the positive future with
the application of the autonomous robots.
Moreover, in the Marxist perspective, the point of view of the managers will be
materialistic to concern with the optimum results and the profitability. So, the
existence of the autonomous robots is significant to the threat of the
management of the organization, especially when they are now affordable
and intelligent to offer speed and accuracy. For the managers in this
perspective, they may be willing to sacrifice the loyal employees and the
sustainable corporate culture to accept the participations of the autonomous
robots and machines in order to accumulate the biggest profits. Nonetheless,
the contention in this perspective still confuses the consequence of the
autonomous robots as the threat for the management of the organization.
According to Burkett (2005), it is argued that the Marxist perspective limitedly
supposed that only the ruling class owned the means of the production, so,
they had the powers to decide whether or not the employees would be fired.
But, in reality, the employees now are protected under the labour laws. Thus,
in the pursuit of the profitability, it is still a considering issue. In other words,
even though the threat of the combination of the hardware and software into
the autonomous robots is significant, it still faces the barrier of the rights and
policies to protect the employees. The managers of the organization may not
easily and entirely act as the materialistic people to gain as much profit as
possible. Another argument is that the meaning of ownership and control now
separates with each other (Castree, 1995). It means although the
autonomous robots are very efficient and effective, the control of the
managers or humans is appreciated. The organizations can replace the
workforce by the robots, but the replacement will be never entire and
comprehensive because no one will control and lead the machines and

8. robots. Especially, since the Marxism pursuits the profitability and abnormal
returns, the robots with the fix system could not reach the optimum results
without the prior design and control of the managers.
Substitution
From three above concepts of Economist concept, free market concept and
Marxist concept, the contention that the combination of the hardware and
software with the autonomous robots is the significant threat of the
management of the organization is proved strongly. No decisive conclusion is
identified. They mainly focus on the argument about the replacement of the
employees by the robots as the consequence of the third great wave. In the
last concept of the Labour Economics, the different view on the emergence of
the autonomous robot is taken into account. It may act as the substitute of the
employees. In theory, Dionne et al. (2005) suppose that the substitution takes
place in the exchange economy, in which the existing systems are appraised
to be old or obsolete to be substituted by the new and modern ones.
According to Congregado and Golpe (2013), the transition comes from the
complements to the substitution. Then, it is argued that after the autonomous
robots are produced and become popular in the mass market, their positions
can change from the complements to the substitution or not. In the above
concepts, the co-operations between the humans and robots and the
assistance of the advanced technology under the control of the managers are
mentioned. It means three above theories still address the autonomous robots
as the complements.
In this theory, however, the likelihood for the substitution of the human beings
in the organization by the robots is very far in the uncertain future because of
the human rights. Regarding the social aspect, this probability is low.
Nonetheless, if considering the workforce as the labour economics, in which
the labours are the normal products to be exchanged in the market, the
substitution is possible. To explain, like a product such as motorbike or
computer, the buyers will pay for the better ones, which have more functions,
higher qualities at affordable prices. In comparison of the robots and humans,
since the robots have more functions, higher speed and accuracy and loyalty
as well as the lower chances to make conflicts along with empowerment, the

9. organizations will prefer to purchase them. That said, in the labour economics
concept to consider the labour as the product in the market, the substitution
by the robots is possible and potential. It highlights the threat for the
management of the organization, especially the relationship between the
employees and the employers. In association with the changing organizational
structure to the autonomous robots and advanced technology, the humans
may be deemed into a dangerous condition to lose their jobs and
management.
However, it is argued that the employee replacement cost is high at that time
to substitute by the robots (Dube et al., 2010). So, as an economist, the
organization face the barriers to decisively make decisions on the substitution.
Also, in the future when the external environment changes substantially and
the existing system of the robots could not suit these changes, the substitution
can cause risks and losses. It results in the temporary employment instead of
sustainability. As a result, in association with the contention, the problems of
the substitution by the robots are still noticeable.
Conclusion
In conclusion, the essay responds to the objective to evaluate the threat that
the combination of the hardware and software into the autonomous robots to
bring to the management of the organization. From four perspectives, of the
Economist, the free market, the Marxist approach and the substitution theory,
the debate on the threat is found strongly and potentially. While the Economist
confirmed that the future of the job loss of the humans because of the robots
will never occur, the remaining theories argue that the future of the
substitution by the robots is possible when the robots are popularly produced
and sold in the mass market. However, the threats are more dangerous and
stressful for the Government than the organizations. To recommend, in all
four theories, the training and development of the human capital are highly
appreciated. Then, it is suggested that to cope with the threats, the
organizations need to invest in the training programs to improve the less-
skilled people to more-skilled people and adapt them with the technological
environment. Furthermore, the Government should invest in the higher

10. educations to boost the current workforce in order to manage the next
generations of the labours to control smoothly and effectively the robots and
machines.

11. References
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http://www.economist.com/news/special-report/21621156-first-two-industrial-
revolutions-inflicted-plenty-pain-ultimately-benefited
Bagui, S.K., Chakraborti, A. K. & Bhadra, S.M. (2012) Application of
Replacement Theory in Determination of Pavement Design Life. Jordan
Journal of Civil Engineering, 6(1), 147- 160
Bjorklund, A., Havemen, R., Hollister, R. & Holmlund, B. (1991) Labour
Market Policy and Unemployment Insurance, Oxford: Clarendon Press
Bogue, R. (2014) The role of artificial intelligence in robotics. Industrial Robot:
An International Journal, 41(2), 119 – 123
Burkett, P. (2005) Entropy in ecological economics: A marxist intervention.
Hist. Mat., 13, 117-152
Cabibihan, J., Javed, H., Jr, M.A. & Aljunied, M.S. (2013) Why Robots? A
Survey on the Roles and Benefits of Social Robots for the Therapy of Children
with Autism. International Journal of Social Robotics, 5(4), 593-618
Calmfors, L. & Skedinger, P. (1995) Does Active Labour Market Policy
Increase Employment? Theoretical Considerations and Some Empirical
Evidence for Sweden. Oxford Review of Economic Policy, 11(1), 91-109
Castree, N. (1995) The nature of produced nature: Materiality and knowledge
construction in Marxism. Antipode, 27, 12-48
Chapple, S. (1999) Displacement effects of active labour market policy.
Report for the Department of Labour, Retrieved from
http://employment.govt.nz/PDFs/op1997-3.pdf
Congregado, E., & Golpe, V.E. (2013) From complements to substitutes:
Structural breaks in the elasticity of substitution between paid employment
and self-employment in the US. SERIE DOCUMENTOS DE TRABAJO
09/2013. Retrieved from http://www2.uah.es/iaes/publicaciones/DT_09_13.pdf
Dionne, S.D., Yammarino, F.J., Howell, J.B. & Villa, J. (2005) Substitutes for
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Dube, A., Freeman, E. & Reich, M. (2010) Employee Replacement Costs.
IRLE Working Paper No. 201-10. Retrieved from
http://irle.berkeley.edu/workingpapers/201-10.pdf

12. Liodakis, G. (2010) Political Economy, Capitalism and Sustainable
Development. Sustainability, 2, 2601- 2616
Moniz, A.B. (2013) Robots and humans as co-workers? The human-centred
perspective of work with autonomous systems. IET Working Papers Series
No. WPS03/2013. Retrieved from http://arxiv.org/pdf/1507.06136.pdf
Singh, B., Sellappan, N. & Kumaradhas, P. (2013) Evolution of Industrial
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Stewart, H. (2015) Robot revolution: rise of 'thinking' machines could
exacerbate inequality. The Guardian, Retrieved from
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machines-could-displace-third-of-uk-jobs
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can-deal-labour-imbalance-means-and-ends

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