Algorithmic Management in The Gig Economy as a Step Toward Dystopia Or Utopia

In nowadays, the economy world has developed in term of science and technology. We cannot deny that it has affected on our daily life and it obviously does impact on world of economy yet new techniques and solutions are introduced into the business world and it leads to qualitative and quantitative increase in productivity. Recently ‘Algorithmic Management’ has been introduced into the business world. What it does is using computer control instead of human manager to decide how business operations should be performed (Möhlmann & Zalmanson2017). It helps and rise ‘gig economy’. Let’s start with a definition of gig economy given by Alex Wood that it is a temporary work position (such as freelance, independent contractors and so on) that the workers receive the jobs or tasks commanded not by human manager, but to app (Alex et al 2018). For example, Uber eats — is an on-demand food delivery app which customer can choose menu items from the local restaurants that have partnership with Uber Eats (O’connor 2016).

Healy has explained that there are three variables to drive Uber Eats business which are an ‘App’— which customer/users need to download and register in order to use. Second, customer — customers need to specify their location and timeframe also they can indicate the range of price that they can effort. Lastly, seller s are the providers such as the restaurant that sell the meal or the driver that willing to deliver the meal to customers (Healy, Nicholson & Pekarek 2017). However, the workers with Uber Eats are different with workers in the office of other companies where the Uber Eats drivers can work at any time they want with a flexible schedule. They just need to log in the app when they want to work and Log out after the they done (Nat 2018). From the example given cannot really classify whether algorithmic management in the gig economic is stepping toward dystopia or utopia. For instance, a company has employed thirty people to pack rice into the bag and estimate to get it done for hundred packs in an hour. If this company get an automatic computer commanded machine to pack rice, the company will only need twenty minutes to get it done for a hundred packs and just need one person to control or operate the machine and machine do all the same work which was supposed to be done by thirty people, but it can be done by one person.

On contrary, machine is indeed more efficient by using man power. But that doesn’t mean that the machine does not have defective during packaging process. This is a fact that, in the modern world, organisation intend to use modern technology doing production in place. And thus, this will increase more production in line, and reduced the labor cost of the work cost. This paper will examine the effects of algorithmic management in the gig economy, analyses the classical management theories and show how it relates to algorithmic management in gig economy and decide whether is dystopia or utopia. The author has claimed that there is an increasing of portion of U.S. workers in gig economy jumped from 10% in 2005 to 16% in 2015 (Hussung 2016). Generally, for the gig worker themselves, the gig economy is seen by many lifestyles, less frustration from absenteeism and it is flexible. Software and program now allow gig workers to swap shift with no hassle and use the robot system to standardise their work. However, there are the effects of algorithmic in the gig economy such as unstable earning, reduction of job security and lack of society connection are occurred (Tores 2018). Significantly, lack of society connection is affected to the financial insecurity as well.

The author has given the explanation that when the workers are managed by the notification on their phone, it became harder to connect or build the relationship with their boss because when the technology take place, the conversation is reduced (Tores 2018). Therefore, this can tell the difference between algorithmic management and the classical management. As mentioned above, algorithmic management is using computer to command the task instead of human. In contrast, the classical management is focused on understanding management and how human works with human. It consists three perspectives which are Scientific Management —This perspective is founded by Frederick Taylor. It is focused on ‘one best way’ to do a job. On the other hand, it aims to improve the productive of an individual (Samson, Donnet & Daft 2016). Taylor has developed four principles for his theory of scientific management. For the first principle, develop the best method scientifically for workers to perform each task. Second, Managers should make sure and carefully select worker with the right abilities for the task. Third, Managers has to be careful to train and motivate the workers. Last principle that Taylor developed was that the managers should support the workers and be responsible, also carefully planned work (Samson, Donnet & Daft 2016).

Bureaucratic Management was introduced by Max Weber. This theory is based on relied on a rational set of structuring guidelines; rules and procedures, hierarchy, and clear divisions of labor (Samson, Donnet & Daft 2016). He believed that the organisation that based on rational would be more efficient and adaptable. There are some rules of bureaucratic management are defined by Max Weber which are When using machine, the workers must wear ear and eyes’ protection.The workers must provide an accurate schedule, showing job and activity.Workshop, maintenance and duty has to be assigned. The workers who are late or get too many absent without a reason, made a damage to the equipment, have careless or unsafe behavior, theft and improper behavior from an alcohol will be discharging from the workplace. These are some example of the rules that Weber has set and provide for the organisation in order to deal with the employees. So, every workers will get the fairness and know what then rules are (Samson, Donnet & Daft 2016).

Administrative Management — is different from the scientific management where administrative management focused on managing an organization as a whole rather than an individual (Samson, Donnet & Daft 2016). The classical management perspectives have given the organisation a new ideas and skill of establishing an efficient and high productive of the workers. However, Healy has mentioned that in nowadays, the definition of scientific management has changed to use technology break down the complexity of the jobs/tasks into simple ones and use technology to measure the workers’ performance instead of using human to do all the things above. Yet the world of gig economy has grown but it leads to a high unemployed rate.

Over a million employees in Australia are unemployed due to the growth of gig economy (Healy, Nicholson & Pekarek 2017). This show that it causes problem for gig workers on job security and job stability. For example, if the workers work on a temporary job, they obviously need to be looking for the next job. Furthermore, it cannot be guaranteed that they will find more work that can make their financial stable. Harland believed that the replacement of work in the gig economy will never be permanent because of the longevity and security will be first valued by most of the employees. “Permanent employment will continue to thrive where there is a match of company values with that of the employee, and where it’s perceived to contribute to their career development and progress.” (Hopskin n.d.). However, under the influence of culture, what is gig economy’s culture and does it matter for freelance?

In the gig economy’s culture can be defined as a flexibility to work at any time and the workers can enjoy doing something that they wanted to do (Malik 2018) and M. McGovern said yes, it does because of culture makes people reflect themselves to their mission in both of big and small business. Many organisations are focus on company culture in the reason of making employees happy will bring work to be more productive. Furthermore, the stronger of company culture, the more stand out of brand will be (Talent Culture Team 2018). This indicated that culture is really important in defining a company and create an unforgettable experience for the customers because culture is the environment that companies can create for their employees. It can determine work satisfaction and relationship between managers and employees.

Overall, although the advantage of working in the gig economy are varied, the flexibility of working such as setting working hours and able to make a decision whether to accept work/task or not. However, these perception of flexibility and freedom were common across all the occupations, depends on the individual in a range of the situations and him/her occupations. For example, some of them had previously worked in am employed environment and later on realised that the freedom they had from self-employed is happier. On the other hand, working in the gig economy world workers are facing with low pay rate which is received pay was below the average, lack of job security and social isolation, as many workers who had worked in the office will find that missing working in the office has made them missed the opportunity to socialise, communicating and meeting new people.

Culture has a powerful influence and play important role in the organisation. In the workplace, culture is the reflection of company’s characteristic and personalities that set the overall of that organisation. For example, when you see how people behave and how they speak to each other and you have got the core of that organisation’s culture. Stewart has suggested that for the future, there is still a need of awareness for the gig economy and the government should take an action on setting a regulation for protecting the consumer and employees in particular (Stewart & Stanford 2017).

References:

1. Healy, J, Nicholson, D & Pekarek, A, 2017, ‘Should we take the gig economy seriously?’ Labour & Industry: a journal of the social and economic relations of work. Available from: Onesearch. [27 September 2018].
2. Hopskin, C, n.d., Understanding the ‘gig economy’ and the changing world of work. Available from: https://insightsresources.seek.com.au/gig-economy-changing-world-work. [28 September 2018].
3. Hussung, T, 2016, Understanding the Gig Economy and the World of Freelancers. Available from: https://online.king.edu/business/the-gig-economy/. [23 September 2018].
4. Malik, S, 2018, Why Gig Culture is not for all? Finexta. Available from: https://www.finextra.com/blogposting/15694/why-gig-culture-is-not-for-all. [1 October 2018].