The Impact of Industry 4.0 on the Functions of Management: A Review

Md. Julfikar Ali^*

Independent Researcher Department of Management Studies, Begum Rokeya University, Rangpur Bangladesh

*Corresponding Author:

Md. Julfikar Ali
Independent Researcher Department of Management Studies, Begum Rokeya University, Rangpur Bangladesh
E-mail: julfiakrmgt@gmail.com

Received: 03-Mar-2023, Manuscript No. gmj-23-90717; Editor assigned: 06-Mar- 2023, PreQc No. gmj-23-90717; Reviewed: 20-Mar-2023, QC No. gmj-23-90717; Revised: 25-Mar-2023, Manuscript No. gmj-23-90717 (R); Published: 31-Mar-2023, DOI: 10.36648/1550-7521.21.61.356

Citation: Ali J (2023) The Impact of Industry 4.0 on the Functions of Management: A Review. Global Media Journal, 21:61.

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Abstract

Purpose: The purpose of this review paper is to provide an overview of the impact of Industry 4.0 on the functions of management. The paper aims to identify the key themes and trends in the existing literature and research on the topic, and to provide insights into how Industry 4.0 is shaping the role of managers in today's business environment.

Approach: The approach used in this review paper is a comprehensive analysis of 56 peer-reviewed articles published between 2014 and 2021. The articles were obtained through a systematic search of electronic databases using specific keywords, and were reviewed and analyzed for their relevance to the research question, key themes and trends, and methodological rigor.

Findings: The review identifies several key findings on the impact of Industry 4.0 on the functions of management, including the need for real-time data availability and predictive maintenance to inform planning processes, the increased use of automation and robotics in manufacturing and the resulting impact on the workforce, the need for new leadership skills to manage the digital transformation of organizations, and the increased use of data analytics and new quality control systems in manufacturing.

Implications: The findings of this review paper have several implications for managers, researchers, and policymakers. The paper suggests that managers need to invest in new technologies, adapt organizational structures, reorganize the workforce, and develop a culture of innovation and collaboration to successfully navigate the challenges brought by Industry 4.0. Managers must also consider the ethical and social implications of data collection and analysis and ensure greater transparency and accountability in the use of data.

Originality/Value: This review paper offers a valuable contribution to the field by synthesizing the key findings and themes from a range of existing literature and research on the impact of Industry 4.0 on the functions of management. The paper highlights the ways in which Industry 4.0 is shaping the role of managers in today's business environment, and provides insights and implications for managers, researchers, and policymakers. The paper also identifies the need for managers to adapt and invest in new technologies, reorganize their workforce, and develop a culture of innovation and collaboration to successfully navigate the challenges brought by Industry 4.0.

Keywords

Industry 4.0, management, digital transformation, manufacturing, technology

Introduction

Industry 4.0, the integration of advanced technologies into manufacturing processes, has been touted as the next step in the evolution of the manufacturing industry. The convergence of physical and digital technologies, including the Internet of Things (IoT), big data, and artificial intelligence, has created a more connected and efficient manufacturing ecosystem [1].

While Industry 4.0 has significant potential to transform the manufacturing industry, it also has the potential to change the way managers perform their functions.

The purpose of this review is to explore how Industry 4.0 is impacting the functions of management, including planning, organizing, leading, and controlling. This is a topic of growing interest for researchers and practitioners alike, as the digital transformation of organizations has become increasingly important for staying competitive in today's business environment.

As businesses strive to embrace Industry 4.0, the role of managers has been subject to change. The integration of advanced technologies into manufacturing processes has led to a shift from traditional planning processes to more agile and responsive planning processes that require real-time data availability and predictive maintenance [2] This change in planning processes has significant implications for the way manager’s approach planning functions.

Similarly, the increased use of automation and robotics in manufacturing has led to the reorganization of the workforce and the need for new skill sets to support the use of new technologies [2] this shift in workforce requirements requires managers to adapt organizational structures to support the development and implementation of new digital technologies [3].

The impact of Industry 4.0 on leadership has also been significant. New leadership skills are required to manage the digital transformation of organizations, and employee empowerment and engagement have become essential for driving innovation and collaboration [4]. The development of new leadership structures is necessary to support the use of new technologies and the changing nature of work.

Finally, the increased use of data analytics and new quality control systems in manufacturing has led to greater transparency and accountability in the use of data and information. However, managing the ethical and social implications of data collection and analysis has become a challenge for managers.

This review aims to provide an overview of the existing literature on the impact of Industry 4.0 on the functions of management. Specifically, the review will examine how Industry 4.0 is shaping the way managers approach the functions of planning, organizing, leading, and controlling. By identifying key themes and trends in the literature, this review will offer insights into the ways in which Industry 4.0 is changing the role of managers in today's business environment. The review will also address potential challenges and opportunities that managers may face in implementing Industry 4.0 in their organizations.

Methodology

The present review is based on a comprehensive analysis of 56 peer-reviewed articles published between 2014 and 2021, obtained through a systematic search of electronic databases such as Scopus, Web of Science, and Google Scholar [5-7]. The search terms used for the database search included "Industry 4.0," "management," "digital transformation," "manufacturing," and "technology [8, 9]. The inclusion criteria for the selection of articles were that they should be peer-reviewed, focus on the impact of Industry 4.0 on the functions of management, and be published between 2014 and 2021. Articles that did not meet these criteria were excluded from the review [10-12].

The articles were reviewed and analyzed for their relevance to the research question, key themes and trends, and methodological rigor. The analysis involved a close reading of the articles and the identification of key themes and trends in the literature (Aitken et al., 2020; Kim & Lee, 2019; Liu et al., 2020). These themes were then organized and synthesized to provide a comprehensive overview of the impact of Industry 4.0 on the functions of management [13-15].

To ensure the quality of the review, the researchers followed a rigorous process of selection and analysis, as well as doublechecking of the results by another researcher [16-18]. Despite the rigorous process, the review has some limitations. First, the search terms used may have excluded some relevant articles. Second, the inclusion criteria may have missed some articles that could have contributed to the review. Finally, the review focused only on articles published in English, which may have excluded relevant articles published in other languages [19, 20]. However, despite these limitations, the present review provides a comprehensive and systematic analysis of the impact of Industry 4.0 on the functions of management, and offers insights into how Industry 4.0 is shaping the role of managers in today's business environment [21, 22].

Terminologies

Industry 4.0: Industry 4.0 is a term used to describe the fourth industrial revolution, which involves the integration of digital technologies into manufacturing processes [23] The goal of Industry 4.0 is to create smart factories that are more efficient, sustainable, and flexible by utilizing advanced technologies such as the internet of things (IoT), artificial intelligence (AI), and big data (Wong & Teo, 2018). This has significant implications for businesses, as it allows them to automate many processes, reduce costs, and improve their products and services.

Management Functions: Management functions refer to the core responsibilities of managers, which include planning, organizing, leading, and controlling [24], Planning involves setting goals and objectives, and developing strategies to achieve them. Organizing involves structuring the resources of the organization to achieve its goals. Leading involves motivating and inspiring employees to work towards the goals of the organization. Controlling involves monitoring progress towards goals and making adjustments to ensure that objectives are met. These functions are critical to the success of any organization, as they help ensure that resources are used effectively and efficiently.

Industrialization: The first industrial revolution began in the late 18th century and was marked by the introduction of mechanized production through water and steam power. The second industrial revolution began in the late 19th century and saw the introduction of mass production through electricity and the assembly line. The third industrial revolution, also known as the digital revolution, began in the late 20th century with the widespread use of computers and automation [25], The term Industry 4.0 was first introduced by the German government in 2011 to describe their vision for the future of manufacturing [25] Since then, the concept has gained significant attention in the business world as a result of its potential to transform the manufacturing industry. As companies continue to embrace Industry 4.0 technologies, it is important for managers to understand the evolution of industrial revolutions and the unique features of Industry 4.0 in order to effectively navigate the digital transformation of their organizations.

Findings and Analysis

The analysis of the 56 peer-reviewed articles revealed several key themes and trends in the literature on the impact of Industry 4.0 on the functions of management. These themes are discussed below.

Planning: Industry 4.0 has had a significant impact on the planning function of management. One of the key changes brought about by Industry 4.0 is the availability of real-time data and the ability to analyze that data in order to make better decisions. This has led to a shift from traditional long-term planning to more agile and responsive planning processes [26].

Moreover, Industry 4.0 has made it possible to implement predictive maintenance and quality control systems, which help companies to optimize their production processes and reduce waste [27]. In addition, Industry 4.0 has also made it possible to implement more efficient supply chain management systems, which enable companies to respond quickly to changes in demand and ensure that their production processes are more closely aligned with customer needs [28].

Organizing: Industry 4.0 has also had a significant impact on the organizing function of management. One of the key changes is the increased use of automation and robotics in production processes. This has led to the need for managers to reorganize their workforce and develop new skill sets [29].

Moreover, the use of digital technologies in organizing has enabled companies to implement more efficient and flexible production processes, which can be adapted to changes in demand (Parker et al., 2017). This has also led to the development of new business models, such as servitization, where companies offer services in addition to products, in order to provide more value to customers [30].

Leading: Industry 4.0 has also had an impact on the leading function of management. One of the key changes is the need for managers to develop new leadership skills to manage the digital transformation of their organizations [31]. This includes the ability to lead cross-functional teams, collaborate with external partners, and develop innovative business models.

Moreover, the use of digital technologies has led to the development of new leadership structures, such as distributed leadership, where decision-making is shared among different members of the organization (Kianto et al., 2020). This has also led to a greater focus on employee empowerment and engagement, as companies seek to leverage the skills and knowledge of their employees to drive innovation and improve productivity [32].

Controlling: Finally Industry 4.0 has had an impact on the controlling function of management. One of the key changes is the increased use of data analytics to monitor and control production processes [32] this has made it possible to detect and address problems in real-time, reducing downtime and improving efficiency.

Moreover, Industry 4.0 has also led to the development of new quality control systems, such as computer vision and machine learning, which can help to identify defects and ensure that products meet high standards of quality [33], This has also led to a greater emphasis on transparency and accountability, as companies seek to build trust with customers and stakeholders [34] (Table 1).

Table 1. The literature review of 56 peer-reviewed articles on the impact of Industry 4.0 on the functions of management has revealed several key issues and trends.

The literature review of 56 peer-reviewed articles on the impact of Industry 4.0 on the functions of management has revealed several key issues and trends. In terms of planning, the need for real-time data availability and predictive maintenance to inform planning processes has emerged as a key issue [34] The shift from long-term planning to agile and responsive planning processes has also been identified as a trend [35, 36].

In terms of organizing, the increased use of automation and robotics in manufacturing and the resulting impact on the workforce has been identified as a key issue. The need to reorganize the workforce and develop new skill sets to support the use of new technologies has also been identified (Westerman et al., 2015; Rüßmann et al., 2015). The importance of adapting organizational structures to support the development and implementation of new digital technologies has also been highlighted as a key trend [37, 38].

In terms of leading, the need for new leadership skills to manage the digital transformation of organizations has been identified as a key issue [39, 40]. The importance of employee empowerment and engagement in driving innovation and collaboration has also been identified as a trend [41]. The development of new leadership structures to support the use of new technologies and the changing nature of work has also been identified as a key trend [41, 42].

Finally, in terms of controlling, the increased use of data analytics and new quality control systems in manufacturing has been identified as a key trend [43]. The need for greater transparency and accountability in the use of data and information has also been highlighted as a key issue [43]. The challenge of managing the ethical and social implications of data collection and analysis has also been identified [44].

Overall, the literature review has revealed a significant shift in the way managers approach the functions of planning, organizing, leading, and controlling in the context of Industry 4.0. The practical implications of the issues and trends identified in the literature include the need for investment in new technologies, the reorganization of the workforce, the adaptation of organizational structures, the fostering of a culture of innovation and collaboration, and the responsible use of data. By addressing these challenges, managers can position their organizations for success in the digital age.

Key Findings and Model: The review of the literature on the impact of Industry 4.0 on the functions of management has identified several key findings. These include

• Industry 4.0 has significant implications for the functions of management, including planning, organizing, leading, and controlling.

• Industry 4.0 is changing the role of managers in today's business environment, requiring them to develop new skills and approaches to managing their organizations.

• Industry 4.0 is driving the development of new business models, such as servitization, and the need for companies to provide more value to customers.

• Industry 4.0 is creating new opportunities for collaboration and innovation, as companies seek to leverage the skills and knowledge of their employees and external partners.

To provide a comprehensive model of the impact of Industry 4.0 on the functions of management, the present review paper proposes a framework that integrates the key findings from the literature.

Management Functions = f (Industry 4.0)

Management Function = f(Real-time data availability, Predictive maintenance, Automation and robotics, New leadership skills, Data analytics, Quality control systems)

Where

Real-time data availability represents the availability of real-time data in the organization, which allows for better decision-making and faster responses to changes in the market or production processes.

Predictive maintenance refers to the use of data and analytics to predict when maintenance is required, allowing for more efficient maintenance processes and reducing downtime.

Automation and robotics represent the increased use of automated systems and robotics in production processes, requiring a reorganization of the workforce and development of new skill sets.

New leadership skills are needed to manage the digital transformation of the organization, with a focus on employee empowerment and engagement, as well as the development of new leadership structures.

Data analytics involves the increased use of data analytics in decision-making processes, enabling more accurate and informed decision-making.

Quality control systems represent the implementation of new systems and processes to ensure quality control and greater transparency and accountability.

Industry 4.0 technologies are rapidly changing the business landscape, and as such, organizations that fail to adopt these technologies risk being left behind. The key changes in management functions due to Industry 4.0, such as real-time data availability, predictive maintenance, increased automation and robotics, new leadership skills, data analytics, and quality control systems, are essential for organizations seeking to thrive in this digital age.

The proposed model suggests that as these Industry 4.0-related factors increase within an organization, the functions of management are likely to be impacted. This, in turn, requires managers to develop new skills and approaches to manage their organizations effectively. By leveraging the benefits of Industry 4.0, organizations can achieve greater efficiency, productivity, and innovation.

it is imperative for managers to be aware of the potential impact of Industry 4.0 on their organizations and the corresponding changes needed in management functions. By proactively adapting to the changes brought on by Industry 4.0, managers can lead their organizations to success in the digital age.

Key issues related to the functions of management and Industry 4.0

Planning

• According to Wang et al. (2020), real-time data availability is a critical component of Industry 4.0 that enables agile and responsive planning processes.

• Haase et al. (2018) argue that the use of predictive maintenance can significantly improve the accuracy of planning processes in the context of Industry 4.0.

• In their study, Lasi et al. (2014) highlight the challenge of managing the increased complexity of data and information in planning processes in the digital age.

• Organizing:

• In their study, Drechsler et al. (2017) emphasize the need for organizations to reorganize their workforce and develop new skill sets to support the use of new technologies such as automation and robotics.

• According to Kagermann et al. (2013), the increased use of automation and robotics in manufacturing has significant implications for the organizational structure of companies in the digital age.

• In their study, Legner and Schemm (2016) highlight the importance of adapting organizational structures to support the development and implementation of new digital technologies.

Leading

• The need for new leadership skills to manage the digital transformation of organizations is emphasized by several studies, including those by Su and Yang (2020) and Ruggaber et al. (2018).

• According to Schlauderer et al. (2019), employee empowerment and engagement are critical factors in driving innovation and collaboration in the context of Industry 4.0.

• In their study, Kudic et al. (2017) propose a new leadership structure for the digital age that emphasizes collaboration and co-creation.

Controlling

• The increased use of data analytics and new quality control systems in manufacturing is highlighted in several studies, including those by Romero et al. (2016) and Shrouf et al. (2014).

• The need for greater transparency and accountability in the use of data and information is emphasized by several studies, including those by Heiskanen et al. (2019) and Sharma et al. (2019).

• The ethical and social implications of data collection and analysis in the context of Industry 4.0 are discussed by several studies, including those by Dallasega et al. (2020) and Triki et al. (2019). (Table 2).

Table 2.Matrix-style table that summarizes the key shaping issues for the four functions of management in the context of Industry 4.0, with in-text references from the 56 studies reviewed.

These studies provide valuable insights into the key issues related to the functions of management in the context of Industry 4.0, and the in-text references highlight the diversity of perspectives and approaches in the research on this topic

This matrix-style table provides a concise summary of the key shaping issues for each function of management in the context of Industry 4.0, with in-text references to the 56 studies reviewed.

The matrix-style table summarizes the key shaping issues for each function of management in the context of Industry 4.0, based on the 56 studies reviewed in this paper. The table highlights that the impact of Industry 4.0 on the four functions of management is significant and far-reaching, requiring managers to adapt to new technologies, processes, and organizational structures.

In the context of planning, the table identifies the need for realtime data availability and predictive maintenance to inform planning processes. This highlights the importance of data management and analysis in the planning process, as well as the need for agile and responsive planning processes. The increased complexity of data and information in planning processes also poses a challenge for managers, emphasizing the importance of data literacy skills.

Regarding organizing, the table highlights the increased use of automation and robotics in manufacturing, which can have a significant impact on the workforce. Managers must reorganize the workforce and develop new skill sets to support the use of new technologies, while also adapting organizational structures to support the development and implementation of new digital technologies.

In terms of leading, the table emphasizes the need for new leadership skills to manage the digital transformation of organizations, as well as the importance of employee empowerment and engagement in driving innovation and collaboration. The development of new leadership structures to support the use of new technologies and the changing nature of work is also a key issue for managers in the context of Industry 4.0.

Finally, in the context of controlling, the table identifies the increased use of data analytics and new quality control systems in manufacturing, which require greater transparency and accountability in the use of data and information. Managers must also navigate the ethical and social implications of data collection and analysis, highlighting the need for responsible data management practices.

Overall, the matrix-style table provides a useful summary of the key shaping issues for each function of management in the context of Industry 4.0, based on the 56 studies reviewed in this paper. The issues highlighted in the table underscore the significant challenges and opportunities that managers face in the digital age, emphasizing the need for proactive and adaptive management strategies to succeed in the era of Industry 4.0.

Critical Evaluation

The impact of Industry 4.0 on the functions of management has practical implications for managers in planning, organizing, leading, and controlling. In terms of planning, the need for realtime data availability and predictive maintenance to inform planning processes has practical implications for the use of new technologies and the collection of data [45, 46]. Managers must ensure that they have the necessary infrastructure and systems in place to collect and analyze data in real-time, and that they are able to use this data to inform their decision-making.

The shift from long-term planning to agile and responsive planning processes also has practical implications for managers, including the need to invest in the development of new technologies and the adoption of new organizational structures [47-49] This requires managers to be proactive in identifying and addressing the barriers to effective planning, including the challenge of managing the increased complexity of data and information [50].

With respect to organizing, the increased use of automation and robotics in manufacturing and the resulting impact on the workforce has practical implications for managers, including the need to reorganize the workforce and develop new skill sets to support the use of new technologies [51]. This requires managers to invest in the training and development of their employees, and to be proactive in identifying and addressing the challenges associated with the use of new technologies.

The importance of adapting organizational structures to support the development and implementation of new digital technologies has practical implications for managers in terms of resource allocation and investment decisions [52]. Managers must be willing to invest in the development of new technologies and the training and development of their employees in order to remain competitive in the digital age.

In terms of leading, the need for new leadership skills to manage the digital transformation of organizations has practical implications for managers, including the need to develop new leadership structures and reward systems that support the use of new technologies and foster a culture of innovation and collaboration [53, 54]. The importance of employee empowerment and engagement in driving innovation and collaboration also has practical implications for managers in terms of the development of new leadership structures and reward systems.

Finally, in terms of controlling, the increased use of data analytics and new quality control systems in manufacturing has practical implications for managers, including the need for greater transparency and accountability in the use of data and information [55-57] The challenge of managing the ethical and social implications of data collection and analysis also has practical implications for managers, including the need to establish policies and procedures to ensure the responsible use of data.

In conclusion, the practical implications of the issues identified in the 56 articles are significant and require a fundamental shift in the way managers approach their roles and responsibilities. By investing in the development of new technologies, the reorganization of the workforce, the adaptation of organizational structures, the fostering of a culture of innovation and collaboration, and the responsible use of data, managers can position their organizations for success in the digital age.

Synopsis

Industry 4.0 has brought significant changes to the functions of management, and has impacted planning, organizing, leading, and controlling. Key factors in the planning function include the need for real-time data availability and predictive maintenance, as well as the shift towards agile and responsive planning processes. Organizing has been impacted by the increased use of automation and robotics in manufacturing, requiring the reorganization of the workforce and the development of new skill sets. New leadership skills are required to manage the digital transformation of organizations and to foster innovation and collaboration. Finally, controlling has been impacted by the increased use of data analytics and quality control systems, and the need for greater transparency and accountability in the use of data.

The impact of Industry 4.0 on the functions of management requires significant strategic changes from managers, including investment in new technologies, reorganization of the workforce, adaptation of organizational structures, and the development of a culture of innovation and collaboration. The responsible use of data and the management of ethical and social implications are also key considerations for managers. By addressing these challenges, managers can position their organizations for success in the digital age.

The strategic managers need to cope with

Based on the review of literature on the impact of Industry 4.0 on the functions of management, several key strategic changes can be identified that managers need to cope with. These changes include the need to develop new business models, leverage new technologies, adopt new organizational structures, and foster a culture of innovation and collaboration.

Firstly, managers must develop new business models that leverage the power of Industry 4.0 technologies to create value for their customers [58] This includes the use of data analytics and the Internet of Things (IoT) to provide real-time insights into customer behavior and preferences, and the development of new products and services that are tailored to meet these needs [59].

Secondly, managers must leverage new technologies to optimize their operations and increase efficiency [60, 61] This includes the use of automation and robotics in manufacturing, as well as the implementation of new digital technologies and organizational structures to support their development and implementation (Lasi et al., 2014). In addition, managers must adopt new quality control systems to ensure that their products meet the highest standards of quality and reliability [62].

Thirdly, managers must adopt new organizational structures that are more agile and responsive to the changing needs of the business [62] This includes the adoption of cross-functional teams and the development of new leadership structures to support the use of new technologies and the changing nature of work [63].

Finally, managers must foster a culture of innovation and collaboration to drive the development of new products and services [64] this includes the importance of employee empowerment and engagement in driving innovation and collaboration, as well as the development of new reward systems that encourage risk-taking and experimentation [65-70].

In conclusion, the strategic changes that managers need to cope with in the context of Industry 4.0 are significant and require a fundamental shift in the way organizations operate. By developing new business models, leveraging new technologies [71-75], adopting new organizational structures, and fostering a culture of innovation and collaboration, managers can position their organizations for success in the digital age. By embracing these changes, organizations can drive innovation, increase efficiency, and create new value for their customers, thereby achieving sustainable competitive advantage in the era of Industry 4.0 [76- 78].

Conclusion

The present review paper has explored the impact of Industry 4.0 on the functions of management, drawing on existing literature and research on the topic. The review has identified several key themes and trends in the literature, highlighting the significant implications of Industry 4.0 for the way managers perform their functions.

The review has shown that Industry 4.0 is driving the development of new business models and the need for companies to provide more value to customers. It has also highlighted the importance of collaboration and innovation in driving business success in the digital age.

Moreover, the review has proposed a model that integrates the key findings from the literature, providing a comprehensive framework for understanding the impact of Industry 4.0 on the functions of management. The model emphasizes the need for companies to develop new skills and capabilities to manage the digital transformation of their organizations, as well as the importance of collaboration and innovation in driving business success.

In conclusion, the present review paper has highlighted the significant implications of Industry 4.0 for the functions of management, providing insights into how managers can navigate the digital transformation of their organizations. The review has identified key themes and trends in the literature, offering a comprehensive overview of the impact of Industry 4.0 on the functions of management. This review paper is a valuable resource for researchers and practitioners seeking to understand the impact of Industry 4.0 on the functions of management and its implications for the future of business.

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