Recent advances in artificial intelligence (AI) and computer technology are causing us to think again about some really basic questions: what is a firm? What can firms do better than markets? And what are the distinctive qualities of firms in a world of smart contracts and AI?
What’s the Purpose of Companies in the Age of AI?
Firms are good at organizing economic activity. But so is technology.
August 13, 2018
Summary.
While there has been a lot of discussion about “what’s left for humans?” as AI improves at exponential rates, we now have to ask, “what’s left for firms?” And as computer technology simplifies and reduces transaction costs, the role of the firm in offering efficient transactions becomes less important. Instead, other things that firms do uniquely well that will come more to the forefront. Four in particular: managing tensions between competing priorities; taking a long-term perspective; providing purpose (a moral call to action); and nurturing “unreasonable” behavior including experimentation and unorthodox thinking.
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Accelerate your career with Harvard ManageMentor®. HBR Learning’s online leadership training helps you hone your skills with courses like Digital Intelligence . Earn badges to share on LinkedIn and your resume. Access more than 40 courses trusted by Fortune 500 companies.
Excel in a world that's being continually transformed by technology.