Generative AI Beyond the Hype—New Technologies in the Face of Organizing and Organizations

Abstract

Generative artificial intelligence (GAI) challenges creative efforts and work that build on expertise. Since GAI has the ability to generate content that can be easily confused with human output, it puts professionals and their organizations at risk. We explore how professional service firms (PSFs) (in law, architecture, and auditing) react to this new technology and what it has entailed for them. We show that GAI has not been perceived as a threat, but these professionals have rather embraced the new technology. However, actual results of GAI initiatives remain to be seen. Also, concerns have been raised that GAI comes with an opportunity cost, as other potentially more suitable and profitable technologies are overlooked. Building on insights from our case study, we highlight several issues that need to be further explored. Ideas for a future research agenda, as well as practical advise for how to put GAI into use, are outlined.

Digital Transformation and the Dawn of Generative Artificial Intelligence (GAI)

We live in a digital age where new technologies are constantly introduced and are making a massive impact. Innovative technologies, such as data analytics, cloud computing, the Internet of Things, virtual reality, blockchain, and AI, have a significant impact on the way we work, the way we organize, and how we create value (Urbach et al., 2019). While technological innovations have always had an impact on our lives, Brynjolfsson and McAfee (2014) have claimed that the current technological development, referred to as the second machine age, differs from previous developments in that human intelligence is now increasingly being substituted by machines (as compared to the first machine age when manual labor in manufacturing and agriculture was replaced by automation). This means that organizations that build their value on human intelligence and expertise—such as professional service firms (PSFs)—are currently becoming increasingly challenged by technology. For example, with AI human knowledge is argued to be replaced with the analytical capacity and the power of machines (Huang & Rust, 2018). This development puts not only professional, but also creative, industries at risk (Anantrasirichai & Bull, 2022; Susskind & Susskind, 2015).

Recent progress in AI, adding generative capabilities, has substantially added to this effect and led to a discussion on how we need to rethink our understanding of creativity and innovation (Amankwah-Amoah et al., 2014; Lee, 2022). The reason for this is that in contrast to AI in general, GAI has the ability to create novel content based on interactions with a user, combining vast pools of information with machine precision, speed, and consistency (Brynjolfsson et al., 2023). While both utopian and dystopian scenarios can be painted from this development (Auslender, 2023), these are yet speculations about the impact of the new technology. We are still in an exploration phase and need a deeper understanding of how this change actually impacts us (cf. Hagberg et al., 2017; Hagberg & Jonsson, 2022). According to an utopian narrative, generative technologies come with a promise of adding immense work productivity as well as quality that can free our time (Auslender, 2023), but according to a more dystopian narrative the power of GAI can be seen as technological development spiraling out of control (Boström, 2020; Jackson, 2023). Both perspectives rest on the assumption that the impact of GAI is not only determined by its transformative power, but also by its broad implementation in organizations and society at large. For example, when the GAI-based tool ChatGPT was launched by OpenAI in the fall of 2022, the usage grew by the millions in the first couple of weeks (Stokel-Walker, 2022). The launch of ChatGPT represents one of the fastest implementations of technology ever, as it is user-friendly to the extent that anyone can use it, you do not have to be an expert on technology. This makes organizations eager to figure out how to use and benefit from it. With this rapid implementation, however, also came a strong pressure on organizations to adapt, or else face the fear of being left behind. Although many organizations have embraced the new technology, many organizations are still in an exploration phase, trying to find a way of either making sense of GAI to fit in with their existing strategies and practices, or use it to rethink the way they do business (Holmström, 2024; Selten & Klievink, 2024). For professionals and their organizations, this implies a need to implement new technology simultaneously as their own work and expertise is expected to be challenged by it (Kronblad, 2020; Pemer, 2021). This means that professionals experience a need to implement GAI despite not really knowing whether it is a threat or an opportunity to their own professional existence.

To explore this situation further, we are currently conducting a research project in which we study how digitalization and AI in general and GAI in particular, is understood and met in classic PSFs (von Nordenflycht, 2010). Classic PSFs are characterized by basing their value creation mostly on human capital and having a monopoly position with their professional knowledge base (von Nordenflycht, 2010). Examples of classic PSFs are law firms, architecture firms, and auditing firms. Accordingly, we have studied three leading PSFs in Sweden from the fields of law, architecture, and auditing, asking how these firms have met the new opportunities and challenges from GAI, and how this has affected their professional work. In doing so, we add to the ongoing conversation on how GAI influences how we think about creativity and innovation, and how GAI can be implemented in ways to support human endeavor rather than replacing, or diminishing, it. Currently the scholarly debate points to a lack of direction in regard to GAI development and it is argued that it is high time to decide how we should steer GAI moving forward (Amankwah-Amoah et al., 2024; Kanitz et al., 2023). But, in order to do so, we need to understand the current status of GAI in organizations. As provocatively asked in a recent JABS editorial “Does GAI assist humans or do humans assist GAI?” (Oswick, 2024). We add to this debate by asking: Are PSFs using GAI to strengthen their professional abilities, or are they feeling exposed to a professional threat stemming from the technology? Or, in other words; do they understand GAI as a threat or an opportunity?

Recent Research: PSFs and Generative AI

While PSFs have been exposed to many challenges in digital transformation (Goto, 2022; Kronblad, 2020; Susskind & Susskind, 2015), it is expected that these firms will be particularly affected by the introduction of GAI, as GAI could potentially challenge their professional monopolies and business models building on the billable hour (Cook et al., 2024; von Nordenflycht, 2010). The generative ability in GAI challenges this as the GAI-empowered system can use existing knowledge bases to create new content at an instant.

Simply put, a GAI-empowered system creating text-based content starts off with the user providing it with an instruction (prompt) whereafter the system searches through a large language model (“LLM”) extracting words and putting that together based on statistical calculations (Hashmi & Bal, 2024). This means that a system empowered with GAI generates a complete answer, as compared to Google, or other search engines, which simply provide a list of sources of information. A system empowered with GAI is smart in the way that it can “remember” past interactions and can “pick up” on user intent (Chatterjee & Dethelfs, 2023), why a conversation with a GAI system effectively resembles human interaction. Thereby the roles and practices of professionals can be at risk, particularly as systems are increasingly generating responses and predictions that resemble and can be confused with those stemming from professionals (Faraj et al., 2018). A GAI-empowered system is not restricted to text, but can also perform calculations and create numeric responses, imagery, 3D models, and video. This means that professionals in classic PSFs are potentially challenged by the technology, regardless of the shape and form of their professional delivery (sketches, numeric analysis, predictions, or text). This is not only a matter of a loss of human autonomy, but can also imply a massive power shift (Faulconbridge et al., 2024). For instance, it might not only be that the machines are taking over and replacing the professionals’ work, but that they might become outcompeted by other PSFs that are better at utilizing GAI. This makes strategic organization and leadership in relation to GAI vital both for the survival of the firms and the professional roles.

Tentative Findings: The Use of Generative AI in PSFs

Based on our ongoing case study of the digital transformation in PSFs, comprising over 100 interviews as well as workplace observations, in three large PSFs in Sweden (which is also one of the most digitally competitive countries in the world ¹ ), we found that an extensive interest in GAI was triggered when ChatGPT was launched. All of a sudden GAI became a “must-have” and the overall view of AI changed from skepticism to enthusiasm almost overnight. This shift in attitude toward AI in general, and GAI in particular, raises several interesting questions that need to be further explored.

First of all, we found that as GAI became increasingly accessible to the professionals in their private lives, they also started to see it as useful in their professional work. The most tech savvy professionals consequently started to experiment in how to improve their work practices with GAI. Thus, GAI was not seen as a threat, but was rather welcomed as an addition to their professional work. In this sense, we did not experience the fear that previous theory has anticipated, that professionals would refrain from generative technologies in hope not to be replaced (see, e.g., Susskind & Susskind, 2015). What we saw was rather the opposite. The professionals viewed this as an opportunity to leverage their knowledge base and have more time for developing human expertise. Soon seminars and presentations were held in the three firms to promote broad GAI use. The professionals were eager to understand what GAI could mean to them, and how they could implement it into their work practices. We saw this in a range of projects being launched. New collaborations were also being initiated with external parties (supplying GAI software or GAI competence) as the PSFs could not build the competence internally fast enough. In this regard, experimental use of GAI was being applauded, and formal in-house incubators were being set up.

Second, while embracing GAI, the large impact for the firms remains to be realized. While the implementation of GAI was rapid, neither business models nor work practices have yet changed in a considerable manner in the studied firms. In other words, neither the utopian nor the dystopian narratives have been realized. Instead, we found that GAI had often steered the organizations toward planning what to do and talking about initiatives rather than actually doing new things, missing out on actual value creation and preparation for the future. We found that while there were some pioneer users of GAI, that talked about new value being created with new businesses and business models taking shape, most still talked about GAI as a potential, and it was rather experiments than work influencing short-term revenue that was affected.” We focus on having generative AI and not what it can give us” said one interviewee. We could see that when the technology was put into use, it was often in internal processes, rather than in work directed at, or in interactions with, clients. Such internal implementation is often built on previous practices and established ways of working, with GAI replacing a previous practice, rather than experimenting with GAI from its own merits and what GAI can do. In contrast, the PSFs noted an increase in competition from new firms, smaller start-up firms being quicker to make use of, and create value from, the new technology. “It is probably not GAI that will outcompete me, but a lawyer that can better use GAI than me” remarked one of the lawyers that we interviewed. Showing that they did not perceive GAI as a threat to their profession, but possibly to the way of organizing traditional PSFs, as they see a new type of professional firms empowered with technology as rising competition. This also added to the sense of urgency—there was “no time to lose.”

Third, and what we found thought-provoking is that some interviewees expressed opportunity costs in relation to innovation connected to this somewhat rushed focus of GAI. As said by one of them: “Interestingly, I think that the desire to be inventive in using GAI has led to a drop in innovative capability in regard to other technologies.” This meant that many other investments, and innovative efforts, relating to other digital technologies had to stand back, in fact resulting in less innovation and creativity. “This is one of many technologies and when we prioritize this—what else are we missing out on?” This quote indicates a risk that the focus on implementing GAI, regardless of the outcome, results in investments being directed at GAI projects, rather than being dispersed according to actual needs and opportunities. Also, at the architecture firm, it was explained to us that “since GAI can generate hundreds of variations in seconds” professional capacity in GAI projects was more about making judgments, deciding what design to go with, rather than actually creating the design. Thus, they expressed a risk in relation to innovation and creativity meaning that the use of GAI could affect the creative work process which restricted initial contemplations of creative experimenting, having a deteriorating effect on creativity itself.

In summary, our tentative findings contradict previous predictions in the literature that professionals would be reluctant to adopt AI in general and GAI in particular, while we also show that the real impact of GAI has yet to take shape. Also, our study shows that the focus on GAI comes at a cost, where other projects and technologies are overlooked and where the creative process of professional work might be at risk.

Toward a Future Research Agenda

As in all technology shifts, it is imperative to ask relevant questions. This is especially true in relation to GAI, as the implementation has been extremely fast. Rather than contributing to the utopian or the dystopian speculations about the impact that GAI will have, we need to explore and understand the technological shift while it is in the making. We need an initiated discussion about how to work with machines and how to keep human agency over technology. We need to improve our capacity, to steer and control their superior capacity to handle information.

By using the example from PSFs, a number of questions arise that need to be further explored both in research and practice:

With GAI being launched, how do organizations organize this change? How do GAI usage align with value creation?

How does GAI challenge how we think of power in organization, and who is ruling who?

What role are human experts giving GAI? Is GAI understood as a threat or an opportunity, and what does this mean for work practices and organization?

What strategies should be used for GAI integration inorganizations to retain creativity and innovative capacity?

How should we handle new issues and unintended consequences that arise with increased use of GAI at the workplace, such as information overload, inadequate data quality, and self-reinforcing data production.

Practical Advice

By trying out and experimenting with GAI, PSFs can strengthen cultures for continuous learning and develop capabilities for adapting to the fast-changing environment. And this could actually be key in avoiding becoming relics in an AI-infused world.

To successfully navigate the introduction of GAI, we suggest the following:

Technological evaluation: Our empirical studies indicate that focusing solely on GAI risks hampering the development of innovative capabilities, making it a “tech focus” rather than an “innovation focus.” We therefore suggest that PSFs should not just focus on a specific technology, such as GAI, but on developing their capabilities for innovation and the exploration of new value propositions. While it is helpful to create cultures that promote early use and take advantage of certain technologies, PSFs still need to explore innovation with an open mind and make strategic decisions that are aligned with their value propositions. There is a need to bring GAI out of the hype and focus on whatever technology that is most suitable for organizational needs.

Remain in creative control: We suggest that PSFs should not restrict themselves to using GAI to automate internal processes or solely increase efficiency, but consider how to use GAI in a creative manner to enhance quality and create new value. In fact, using tools like ChatGPT as a shortcut can make the results more streamlined and of less quality and creativity, that is, we produce more, but at less quality. What comes out is “plausible and human-like but not necessarily truthful responses” (Kanitz et al., 2023) This means that we advise professionals to develop creativity, curiosity, and critical thinking—and to use GAI merely when it is feasible to enhance their work while remaining in control of the work process and its outcomes.

Build prompting skills: With GAI the answer will never be better than the question and the output will unlikely outmatch the prompt. The scope of our question or instruction will bind the delivery of the GAI tool. The better the instruction, the better the delivery. Thus, developing prompting skills is vital. We therefore recommend that PSFs set aside time and resources to allow professionals to develop their prompting skills, not just aimlessly try the new technology out. Doing so would enable them to take control of the technology and assert human agency and creative direction.