Manufacturing Revolution Boosts People Issues: The Evolutionary Need for ‘Human‐Automation Resource Management' in Smart Factories

• DOI: http://doi.org/10.1111/emre.12368
• Date: 01 June 2020
• Published date: 01 June 2020

Manufacturing Revolution Boosts People

Issues: The Evolutionary Need for ‘Human-

Automation Resource Management’in

Smart Factories

VOLKER STEIN and TOBIAS M. SCHOLZ

Chair for Human ResourceManagement and Organizational Behavior, Universityof Siegen, Am unteren Schloss 3, 57072,

Siegen, Germany

Driven by significant innovations in manufacturing on the edge of a ‘second machine age ’,automation will play a

pivotal rolein turning the world of work upside down.Digitized manufacturing is fundamentally changingrelations

between human and machine. The expected symbiosis has not yet been systematically organized, since human

resource management has widely ignored the topic of automation. If HRM fails to answer the final call, it will lose

its influence in smart factories, ultimately being replaced by other functions. Our theoretically derived concept of

human-automation resource management (HARM) discloses a possible way out by specifically tackling the

conjunction between humans and machines. We will sketch HARM as the combination of HRM and automation

management and,therefore, as the next evolutionary step in the advancementof HRM. After supporting the strategic

integration by means of its synergistic benefits, we will determine the tasks HARM is expected to fulfill at the

automation-people-nexus.

Keywords: human resource management; automation; future ofindustrial labor; manufacturing; smart companies

Introduction: people and the automation

of manufacturing –A mutual exclusion?

Imagine the smart factory of the future: completely

modularized manufacturing processes,monitored, largely

data-optimized, with blockchain-based payment flows,

and steered by decentralized cyber-physical systems that

generate as many autonomous real-time decisions as

possible. People from the core workforce as well as from

the working cloud create the computerization

infrastructure and provide for higher-order decisions,

conflict solution, and meaning in terms of businessmodel

and value creation. Many people-related challenges arise:

from factorylayouts and manufacturing interoperability to

skill shifts, life-long learning, corporate cultural

sustainability, work ethics, etc. Will the interests of robots

and humans be played off against each other? Who

decides on that? Who can, who will take the lead in

transforming smart factories?

Ever since our ancestors crafted primitive tools out of

stone, innovations in manufacturing have continuously

led to changes in the working world, and to work itself.

Today, the innovative contribution of technology to

manufacturing lies within its automation (Chryssolouris

et al., 2008), applying robots (Engelberger, 2012), sensor

systems (Meijer et al., 2014), and full software support

(Xu, 2012) to advanced production processes (Zhong

et al., 2013), material handling (Wang and Shih, 2016),

payment transactions (Dieterich et al., 2017), and quality

control (Ghosh, 2014).

While automation optimizes production processes and

allows for transformation towards a knowledge-based

society with high energy efficiency, the collateral damage

of collaborating robots is the potential destruction of jobs

(Worstall, 2013). Similar to the era of industrialization of

the 18th and 19th century, the definition of work has been

changing and will continue to change rapidly again in the

21st century. Human-robot-teamwork (Nourbakhshet al.,

2005) brings about an increasing determinability of

Correspondence: Tobias M. Scholz, Chair for Human Resource

Management and Organizational Behavior, University of Siegen, Am

unteren Schloss3, 57072 Siegen, Germany,Tel.: +49 271 740 3228.

E-mail tobias.scholz@uni-siegen.de

European Management Review, Vol. 17, 391–406, (2020)

DOI: 10.1111/emre.12368

© 2019 The Authors. European Management Review published by John Wiley & Sons Ltd on behalf of European

Academy of Management (EURAM)

This is an open access article under the terms of the Creative Commons Attribution License, which permits use,

distribution and reproduction in any medium, provided the original work is properly cited.

location,flexibility, and efficiencyof work (Angerer et al.,

2012). In today’s working world free of boundaries and

limits (Ohmae, 1990), with the human brain remaining

the main source of innovativeness (Brynjolfsson and

McAfee, 2012), automation leads to a digitization-

oriented shift in the needs of employers (Levy and

Murnane, 2012; Collin and Palier, 2015) and thus to a

growing imbalance in the supply and demand of required

qualifications (Cappelli, 2012). Researchers paint the

picture of a race of humans against machines

(Brynjolfsson and McAfee, 2011). Sennett (2005, p. 83)

even describes working people as afflicted by a ‘specter

of uselessness’. Examples such as Foxconn replacing

workers with one million robots (Ackerman, 2011) or

Watson, IBM’s artificially intelligent computer program

winning at Jeopardy, strengthen this belief. Defeated by

Watson, the contestant Ken Jennings stated: ‘I, for one,

welcome our new computer overlords’(Markoff, 2011).

The prevalent discourse structure on the future

relationship between humans and robots resembles an

either/or discussion (PwC, 2017; Elliott, 2018): when

one rises, the other one falls. The protagonists of this

either/or view adduce comprehensible reasons: in favor

of the humans, researchers invoke that only real people

can be creative, judging, socially empathetic, and

situationally valuable (e.g., McAfee, 2014; Wu, 2015;

Pistrui,2018), and they refer to the recentfailure of Tesla’s

fully-automated not at all ‘smart’factory (Edwards and

Edwards, 2018). In favor of the robots, researchers argue

that only machines can work constantly, error-free,

technologically sustainably, and cost-efficiently (e.g.,

Deloitte, 2015; Wingfield, 2017).

Reviewing this discussion, its underlying problem

cannot be overseen: it is a play-off against each other,

leading to a rather destructive win-lose result or even

lose-lose result of the inherent conflict of distribution of

work (McKinsey Global Institute, 2017). As it is well-

known from negotiation methods such as principled

negotiation (Fisher and Ury, 1981), striving for a win-

win-result allows for the combination of the qualities of

each side. This gives rise to a synergistic view in terms

of a symbiotic both/and relationship of working humans

and working robots (e.g., Flemming, 2019), which is still

a neglected topic in research, especially lacking a

theoretical framework.

The research gap consists of the specification of the

automation road ahead for businesses in four exploratory

fields: (a) the business function/s that organize/s the

concomitanttransformation; (b) the existenceof synergies

between working humans and working robots as part of

the changing automation reality and of the automation

narrative; (c) the task areas for the exploitation of

synergies on condition of minimal collateral damages;

and (d) the ways to balance the cost of renewal and

profitability.

However,the literature on the humans’wayof handling

automated manufacturing from a human perspective is

scarce and reflecta distant, apprehensiveposition: ‘Tod ay,

people treat most robots in the workplace like wild lions:

caged and approached only by trained staff’(, p. 15).

Only a few papers focus on people’s reaction to robot-

made decisions (Borenstein and Arkin, 2016;

Geiskkovitch et al., 2016), the social and emotional

perceptions (Sauppé and Mutlu, 2015), the people’s

employability (Davenport and Kirby, 2015), and the

competences required to deal with this change

(Bremer, 2015; Gallina et al., 2015). They all are rather

selective and concentrate on specific points of interest,

but without bringing together the theoretical foundation

and conceptual clarification of how, in the near future,

humans and robots will presumably be working as a team

(Beer et al., 2014). Therefore, it will be essential to shape

the human role within the automated world before it

becomes obsolete.

This paper contributes to the existing but scarce

literature in both theory and practice. Up to now, general

discourse sees automation as a force that will lead to

significant turmoil concerning labor, especially as it is

driven by technology rather than by the humans. At

variance with those opinions, this paper underlines the

synergistic potential of combining humans and robots.

This understanding signifies the theoretical anchoring

in the capabilities-oriented strategic management

perspective with the focus on the resource-based view

(Barney, 1991). The management of a business utilizes

any resources to achieve a sustainable competitive

advantage. This competitive advantage is usually based

on the combination of valuable, rare, imperfectly

imitable, and non-substitutable internal resources

(Barney, 1991) and capabilities, best developed as first

mover on the market. As knowledge about technological

innovations and improvements is quickly circulated, the

resource focus nowadays incorporates these accelerating

dynamics. Consequently, Helfat and Peteraf (2003)

refine the strategic management of organizational

resources and capabilities towards the ‘dynamic’

resource-based view. This paper, therefore, evaluates

the strategic alternatives of dynamically managing

categorially different organizational resources in future

labor regimes.

Furthermore, we aim at deepening the debat e in which

the human perspective will retain importance in this

context. The human factor will remain the crucial source

for creating competitive advantages for a business and

for ensuring its social harmony. It is not by chance that

human resource management (HRM) has evolved as a

business function to concern itself with issues such as

work ethics (Sloan and Gavin, 2010), sustainability

(Jabbour and Santos, 2008), and responsibility (Shen,

2011), and, therefore, is predestined to answer crucial

392 V. Stein and T.M. Scholz

© 2019 The Authors. European Management Review published by John Wiley & Sons Ltd on behalf of European

Academy of Management (EURAM)