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Internet research

Caught up in the current

München, 02/16/2016

The Munich Center for Internet Research will analyze the social dynamics of digitalization. Here LMU‘s Thomas Hess discusses new organizational and leadership structures, the future of work and the challenges posed by digital technologies.

Foto: everythingpossible /

Professor Hess, let’s assume that you work for one of these modern concerns that make maximum use of digital technology. How much does your employer already know about you?
Hess: The traditional approach to personnel management provides him with relatively little information about me. He has access to my core data, he knows a little about my background from another file, and he can consult another source for information about my career in the firm. That’s the way things used to be. In the digital world, more and more is being added to this dataset. It is now possible, at least in theory, to collect data that reveal exactly what I do each day, who receives emails from me, and how and with whom I interact. My whole pattern of behavior in the firm could be documented simply by collecting all the clues I leave behind in digital form in the course of my working day.

What’s new is not so much the collection and storage of data as such, but the ways in which different types of data can be correlated and analyzed in a wide range of contexts. What can employers learn from this?
Ultimately, it would be possible to construct a detailed personal profile: Where do my strengths lie, what kinds of experience do I possess? In what fields am I less well-versed? In what areas might I lack the ability to lead? One could very quickly discover what I am currently working on, which of my assigned tasks I have yet to carry out – and perhaps one could design a training program specifically to remedy my deficits. In principle, one can extract from ongoing data streams information relating to what every single employee and/or specific staff groups is/are currently doing, or find out how new strategic initiatives have been received. But first there are two technical challenges to be overcome: How can the information that relates to me as an individual, which is encoded in different formats and stored in different places, be combined into a coherent whole? And how does one distill useful knowledge from this mass of data - information from which inferences about my future performance or behavior could be drawn, for instance? Large-scale application of modern techniques of aggregation and analysis of large amounts of heterogeneous data is just getting underway. – We are now entering the era of big data.

Digitalization not only ensures that the individual worker is always available. Big data also makes sure that she has nothing to hide – Is that a realistic assessment?
Hess: Certainly not in the short and medium term. But if this development were allowed to proceed unchecked, one can indeed, in the longer term, imagine a scenario in which companies are in a position to monitor their entire staff, and observe and evaluate each individual employee from all sorts of angles. However, we already have a legal framework for dealing with this situation. It just needs to be adapted to take these new possibilities into account. Moreover, firms are not interested in every scrap of information they may possess. Collecting and collating information costs money. In my opinion, these two factors together will restrict application of the full range of technological options, so that in the end firms will not exploit them to the extent of peering into the very souls of their employees.

Is such transparency really likely to improve the quality of work or make it more efficient? And, if so, can it also make the world of work more human?
Hess: It is very difficult to make predictions in this context. But one thing one can say is that companies will need new leadership models. They now have far more personal data on, and a far clearer picture of their employees. In a collaborative project with the Institute for Social Research (ISF), which specializes in problems relating to the future of work, we plan to study the impact of this development on organization and leadership in the workplace. It may well turn out that firms will choose leadership models that issue broad guidelines instead of insisting on micromanagement. In other words, we may get the opposite of the fully transparent employee. Research has shown that constant monitoring can have a negative impact on performance. Conversely, a certain degree of privacy promotes incremental, continuous improvement.

What then are the likely consequences for the organization of work in companies?
Hess: For a start, companies will assign tasks in a far more flexible manner. On the whole, today’s companies have a stable and hierarchical form of organization. Staff members have defined sets of tasks to perform. In the future, tasks will be allocated far more frequently to project teams. New duties will no longer be automatically assigned on the basis of an employee’s or a department’s predetermined area of responsibility, but based on detailed and diversified information on the specific abilities and skills available.

Among the issues you are studying is how companies can make best use of cloud computing, and where they need to take particular care. What effect does the provision of such a wide-ranging technical service by an outside source have on the work of the commissioning company?
Hess: Cloud computing is just a technical concept that allows for the transfer of data storage and analysis from a dedicated local terminal to a central processor. But the term is also used as a catchword for the idea that internal flexibilization can entail the delocalization of a firm‘s activities into the internet, the so-called cloud. Let’s assume you can divide a process into 10 subtasks. To achieve the desired end result, one can assign each of these within the firm. Alternatively, one can outsource particular steps via the internet. Now the process consists of in-house operations and specialized services provided from outside. This makes for a more flexible and specific pooling of the skills required for the realization of a complex task. In many cases, it will be possible to automate task management. The deconstruction of the whole operation, perhaps even the final quality-control measures – insofar as these can be formalized – will be done by computers. Tasks that used to require the skills of a qualified manager will be delegated to a machine.

Questions relating to organization and leadership in digital workplaces constitute the basis for one of the pilot projects to be undertaken by the new Munich Center for Internet Research, in which you will be deeply involved. What is the basic idea behind the new Center?
Hess: The overall objective of the studies planned at the MCIR is to characterize in detail how societies and economies are being transformed by the internet. A number of national and international research initiatives in this field are already up and running. But most of these focus on particular social or technical aspects of the phenomenon. We will seek input not only from researchers but also from other social groups – to help us select and define issues for investigation, for instance. We hope that this will ensure a continuous flow of ideas that can keep up with the rapid advance of the field. We also plan to rethink interdisciplinary cooperation and its organization, with the aid of novel approaches to management which are emerging from developments in software.

Can you tell us more about your actual research projects?
Hess: LMU, the Technical University of Munich (TUM) and the Max Planck Society, as well as other universities and research institutions – such as the ISF – are all involved in the new Munich Center. In the initial phase of its work, we hope to tackle three other issues, in addition to the project on leadership and organization mentioned above. The first project concerns the interface between informatics and legal science, and will look at the question of accountability in self-regulating systems: Who bears the technical and legal responsibility for the operation of such systems? With whom does the legal liability lie when a driverless car causes an accident? The passenger? The person who programmed the car’s software? Another focuses on the media, which have become a classical arena for digitalization. It will ask how public broadcasters, with their specific supply mandate, can best go about marketing their products on digital media. And finally we want to look at how online platforms, such as those now available for the provision of transport services or accommodation, can be made more efficient and can effectively regulated.

These are quite specific questions addressing issues of broad relevance that are likely to turn up in many different settings. This is not an attempt to gain a wide-screen panorama of the digital world.
Hess: They are pilot projects – which are indeed intended to give an impression of the spectrum of topics we hope to cover. They are also designed to show how well we can cooperate, because successful interdisciplinary collaboration is not something that can be taken for granted. Moreover, the MCIR concept rests on two other pillars. The first is the series of lectures and discussions, in which recognized pioneers and established authorities in internet research will take part, and which will enrich the debate about the internet and its broader consequences. Guest speakers will be Alessandro Acquisti from Pittsburgh, whose work focuses on information technology and public policy, Jarim Lakhani, expert on management of technology innovation, Harvard Business School, and Helen Nissenbaum, expert on privacy und online trust, New York University. And the MCIR’s last pillar is an attempt to collect data on internet use on a neutral basis and make it available to the public. Together these efforts will ultimately demonstrate how one might go about building a larger institution that would be capable of taking a broader view of the whole complex of issues.

The Bavarian State Government is also engaged in setting up the Bavarian Digitalization Center are the two initiatives designed to complement each other?
Hess: The Zentrum Digitalisierung.Bayern has a clearly defined goal: to promote economic growth in Bavaria by providing resources to support applied research and creating a platform for cooperative ventures between industrial firms that have not collaborated with one another in the past. Our Center will focus on the repercussions of this networking process, keeping all their social aspects and their impact on diverse interest groups in view.
Interview: Martin Thurau

Prof. Dr. Thomas Hess
Prof. Hess is Director of the Institute for Information Systems and New Media at LMU, Coordinator of LMU’s Center for Internet Research and Media Integration (ZIM) and a member of the Steering Committee of the new MCIR.

The Munich Center for Internet Research (MCIR)
is an interdisciplinary research center, hosted by the Bavarian Academy of Sciences, which studies the effects of the internet on society and economic life. The initiators of the MCIR are researchers based at the Fraunhofer Institute for Applied and Integrated Security, the Institute for Social Research (ISF), LMU Munich, the Max Planck Institute for Innovation and Competition ,the Technical University of Munich (TUM), (MPG), and the Armed Forces (Bundeswehr) University Munich.

Foto: Taiga -