AoEJ: Academy of Education Journal

Volume 12 Nomor 1, Januari 2021

THE ROLE OF HIGHER EDUCATION POLICY AND THE DEVELOPMENT

OF MANAGEMENT SCIENCE IN THE INDUSTRIAL REVOLUTION

4.0: A PERSPECTIVE FROM INDONESIA

Yudha Dwi Nugraha

Departemen Manajemen, Universitas Islam Bandung

Jl. Tamansari No.1, Tamansari, Kec. Bandung Wetan, Kota Bandung, Jawa Barat 40116

Email: yudhadwinugraha@unisba.ac.id

ABSTRACT

The development of digital technology has disrupted a variety of human activities, not only as a

driving force for the economy but also in the fields of science and technology and higher education.

The industrial revolution 4.0 era has influenced higher education policy, teaching, and

development of management science in universities. This article focuses to discuss the role of

higher education policy and the development of management science in the era of industrial

revolution 4.0. Based on theoretical studies and relevant literature reviews, the author argued that

the challenges of the industrial revolution 4.0 must be responded quickly and appropriately by all

stakeholders to be able to anticipate changes in the world and increase the competitiveness of the

Indonesian college student in the midst of global competition. The management science curriculum

development must emphasize the fields of Science, Technology, Engineering, and Mathematics.

Management science should refer to learning based on information and communication

technology, the internet of things, big data, and computerization. Furthermore, management

science is expected to create higher thinking order skills (HOTS) for higher education students.

Finally, management science is also expected to provide teaching and have noble values, spiritual

values, wisdom, and the element of human touch.

Keywords: STEM; HOTS; Management science; Higher education policy.

INTRODUCTION

The world has now entered the era of the industrial revolution 4.0 marked by

increased connectivity, interaction and development of digital systems, visual and artificial

intelligence. The world is now also open and without limits, where everyone is easy to

interact and communicate. This arises because of the phenomenon of globalization that

makes a global life. The phenomenon that opens up new opportunities in efforts to build

and improve the lives of the people and nation. The development of the industrial

revolution 4.0 uses intelligence engineering and the internet of things as coffers of

movement and connectivity between humans and machines. The term industry 4.0 itself

originated from the idea of the fourth industrial revolution in which the industrial

revolution occurred four times, culminating in the 2000s, technology, interconnection, and

data analysis developed rapidly which gave rise to the idea that all technology be

integrated into various industrial fields.

There are four industrial design principles 4.0 (Herman et al., 2015): First,

interconnection (connection). Second, transparent information. Third, technical assistance.

Fourth, decentralized decisions. Industry 4.0 has a significant impact on various aspects

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Volume 12 Nomor 1, Januari 2021

such as management science, education, labor market, society and according to Horváth &

Szabó (2019) also for manufacturing companies. Hüther (2016) argued that the possibility

of change can put pressure on policies, economic regulators and also new skills and

competencies needed by new technology will require changes in the education system.

Social cohesion can be weakened if technological change is not accompanied by

significant changes in the socio-economic system (Vacek, 2017). Therefore, Szabó et al.

(2019) argues that Industry 4.0 is a socio-economic and technological phenomenon.

The higher education policy deals with how universities organized, operated and

funded. It must bring the disruptive effect in this digital era. For campuses that are not

ready, they will not be able to catch up. Higher education policy must also touch to various

sides starting from the philosophical and technical sides. Universities are required to keep

up to date in order to be able to keep up with the demands of the industrial revolution 4.0.

Management referred to knowing what you wanted to do and then monitoring it in

the best way (Drucker, 1998, 2009). Since then, management theory evolved which

consists of two parts of the essence of management, physical and conceptual (Freedman,

1992). Management is a combination of various components or scientific disciplines and

management is the key to economic progress (Alford, 1951; Drucker, 1998; Wrege &

Greenwood, 1991).

The entry of the 4.0 industrial revolution era, various scientific disciplines,

particularly management science, and higher education policy, experienced adjustments

and changes. Therefore, it is crucial for researchers to investigate how the development of

higher education policy and management science in the era of the industrial revolution 4.0.

From the review of several articles and from the best of author knowledge, the author has

not found a article specifically discusses the role of higher education policy and the

development of management science in the industrial revolution 4.0.

The main purpose of this article is to review the role of higher education policy and

development of management science in the era of the industrial revolution 4.0. Based on

the evolutionary concept of management processes, this article aims to focus on how the

industrial revolution has influenced higher education policy and management science.

Furthermore, this letter will summarize the discussion about the concept of industry 4.0,

the evolution of management science by including the origin of management and its

progress during industrialization. Finally, the role of human resources and management

science curriculum in the industrial revolution 4.0 era, the role of higher education policy

and the direction of the development of management science will also be discussed.

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Volume 12 Nomor 1, Januari 2021

LITERATURE REVIEW

Industrial 4.0 Concept

The end of the 18th century was the beginning of the industrial revolution when

mechanical production facilities powered by water and steam were first used in the world.

The second industrial revolution began when mass production became possible with the

use of electricity and the distribution of labor in the early 20th century. Several scholars

(Ghobakhloo, 2018; Kagermann et al., 2013; Shrouf et al., 2014) argued that third

industrial revolution marked by a higher degree of automation of production and different

work processes and achieved through information technology industries and application of

electronic. Furthermore, the fourth industrial revolution was considered a result of the

horizontal expansion of information technology (Lee et al., 2018). Communication

technology and information is widely used in various fields, including government,

business and everyday life (Kovács, 2017a) and according to Aichholzer et al. (2015),

interconnection is a fundamental element.

According to Buhr (2017), the industrial concept 4.0 was introduced in 2011 by the

German Industry-Science Research Alliance. Dorst et al. (2015) and Spath et al. (2013)

argued that the term industry 4.0 describes an increase in digitization of the entire supply

chain and resulted in connecting actors, systems, and objects based on real-time data

exchange. As a result of this interconnection, machines, processes, and products with

artificial intelligence will be able to adapt to changing environments (Hecklau et al., 2016).

Moreover, Posada et al. (2015) and Roblek et al. (2016) define five key elements of

Industry 4.0 consisted of (1) digitization, customization and optimization of production; (2)

adaptation and automation; (3) human and machine interaction; (4) value-added and

storing services, and (5) automatic data exchange and communication.

Zezulka et al. (2016) proposed that industry term 4.0 is used for three factors: (1)

digitization and network integration, (2) digitization of products and services, and (3) new

market models. There are four main elements of Industry 4.0 as identified by Hermann et

al. (2015), namely the physical cyber system, the Internet of Things (IoT), internet services

and smart factories. In addition, Industry 4.0's main features are virtualization,

interoperability, automation, flexibility, real time availability, service orientation, and

energy efficiency as defined by Perales et al. (2018).

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Volume 12 Nomor 1, Januari 2021

The history of management and the industrial revolution

According to Drucker (2009) and Greenwood (1999), the history of management is

as old as humans and management has existed for thousands of years. The tangible

evidence that depicts management is the Egyptian pyramid and the Great Wall of China

(Argyris, 1965; Drucker, 1998). In 1776, Adam Smith is the first oversaw the efforts of

various manufacturing techniques and considered laid a milestone towards management

(Sheldrake, 2003; Van Der Aalst et al., 2003; Wrege & Greenwood, 1991; Wren &

Bedeian, 1994). Adam Smith argued that the community will benefit economically if each

job assigned to workers is broken down into a variety of repetitive tasks that are tapered

(Hofstede, 1994; Lawler, 1973; Light et al., 1995). Furthermore, Adam Smith focused on

concepts and problems related to management processes to increase motivation among

workers (Frey & Osterloh, 2002; Sheldrake, 2003).

Adam Smith argues that the division of labor leads to efficient production (Davis &

Naumann, 1999) and the level of productivity increased by responsive knowledge about

tasks (Rosenberg, 1965). The time paradigm shifted agricultural economics towards

mechanical economics in the 15th century (Nicholson, 2011). During the industrial

revolution, people felt it was more economical to produce products in factories than at

home (Armitage, 2000). Most researchers (Sheldrake, 2003; Van Der Aalst et al., 2003;

Wren & Bedeian, 1994) suggest that the industrial revolution served as the most important

turning point in the past. Berman (1992) and Cooper & Burrell (1988) urged that the

industrial revolution almost affected every trait of daily life in various ways. The standard

of living of the general population began to experience constant growth and this happened

for the first time in history (Sheldrake, 2003; Van Der Aalst et al., 2003; Wren & Bedeian,

1994). Jones (2001) and Wrege & Greenwood (1991) argued the need for a comprehensive

approach to management thinking sparked a journey to modern management after the

industrial revolution.

Furthermore, the foundation of scientific management is laid by Frederick W. Taylor

and it was based on the classical management theory (Aufhauser, 1973; Freedman, 1992;

Freeman & Louçã, 2002). According Jones et al. (2003), Frederick Taylor introduces the

concept of scientific management that influences management thought processes on a

fairly large scale. Frederick Taylor found that workers' abilities could be improved and the

economy could obtain substantial growth by using scientific procedures and methods

(Freedman, 1992). Drucker (1998) argued that the scientific management principles

introduced by Frederick Taylor are widely applied throughout the industry to increase

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organizational productivity. The purpose of scientific management is to create knowledge

about how to develop work processes although the archetypal application of scientific

management in manufacturing (Taylor, 2013; Wrege & Greenwood, 1991; Wren &

Bedeian, 1994).

Weber's contribution is a characteristic framework referred to as "bureaucracy" and

his contribution to management thinking is truly bureaucratic (Joerges & Czamiawska,

1998; Swedberg, 2000). According to Weber, society is increasingly industrialized (Käsler,

1988) and the goals of creation and industrial goals are also increasingly complex with

rapid innovation (Rappa, 2003). According to Morgan (1989), bureaucracy shows that

management styles must be hierarchical and to achieve a certain level of work skills,

people must obey the order of legitimate authority (Rothschild-Whitt, 1979). Clegg (1990)

suggested that the emphasis of the bureaucracy is on legal authority and the obstacles

behind legal authority are to ensure treatment and equal opportunity for all (Handel, 2003).

Argyris (1965) and Satow (1975) argued that organizations as machines act as rational

companies. In addition, achievements and associations that connect divisions and places

are intended to make work as efficient as possible (Alford, 1951; Bennis, 1966; Berman,

1992; Morgan, 1982). In Weber's view, bureaucracy acts as a model in the organizing

industry (Engel, 1970). Bureaucratic management functions as a major feature in modern

society (Blau, 1956) and during the industrial revolution it was considered rational and

efficient (Handelman, 1981) although bureaucratic management is subject to various

criticisms (Hodgson, 2004).

RESEARCH METHOD

This article used qualitative methods with a phenomenological approach. According

to Creswell 1998), phenomenological studies describe an experience or phenomenon. Data

collection is carried out by means of literature study and also using document study data

collection methods. The data collected consists of secondary data and obtained through the

study of literature.

Secondary data collection used in this study is the literature study which includes

secondary data collection obtained from the relevant articles and books. According to

Nazir (2013) data collection techniques by conducting a study of reviewers of books,

literature, notes, and previous reports relating to the problem being studied.

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RESULTS

The role of human resources and management science curriculum in the industrial

revolution 4.0

In a world of industrial revolution 4.0, it is required individuals who possess creative

and innovative qualities. Qualified individuals are human beings who have positive

competitiveness who can later produce a work or product that can compete globally. One

effort that can be done to improve the quality of individuals is the use of educational

technology that requires fundamental changes in the education system. This fundamental

change is related to curriculum policy, especially management science, because the

curriculum is a reference used in learning and training in education and/or training which

in its development involves philosophical thinking, psychology, science, technology, social

and culture. This management science curriculum must be able to direct and shape higher

education students who are ready to face the era of the industrial revolution 4.0 with an

emphasis on the fields of Science, Technology, Engineering, and Mathematics (STEM).

In addition, reorienting the development of the management science curriculum at

the university must also refer to learning based on the Internet of Things, ICT, big data,

computerization, and entrepreneurship. Universities in Indonesia that are also experiencing

the rapid development of the industrial revolution 4.0 must be able to adapt and innovate

by emphasizing the development of human resources (the university academic community)

and specifically the management science curriculum. So that all the academic community

and management science curriculum with an emphasis on the fields of Science,

Technology, Engineering, and Mathematics (STEM) can be one of the drivers of the

industrial movement, especially higher education in order to have competitiveness and

achieve high productivity in the global era.

The role of higher education policy in the era of the industrial revolution 4.0

Higher education policies must be able to encourage economic growth and national

competitiveness in the era of the industrial revolution 4.0. Furthermore, the higher

education policy must be able to produce two outcomes or achievements that are fulfilled

by universities, namely publication in Scopus indexed journals or the like. The second is

regarding the absorption of alumni by working world and will later become a disruption

effect for universities if they do not have a systemic mechanism in tracking the

whereabouts of alumni (tracer study). The policy will also encourage universities to

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Volume 12 Nomor 1, Januari 2021

strengthen networking with the business and industry world to ensure the certainty of their

alumni is absorbed.

Besides networking with outsiders, universities themselves also need to be creative

in building an entrepreneurial ecosystem as well as an industrial and business world that is

used by students, at least for an apprenticeship, if as a target the workplace cannot be

optimized. The entrepreneurial ecosystem needs to start with curriculum design. The

Government of Indonesia has issued a policy on developing a curriculum called KPT

(higher education curriculum) which is equipped with guidelines for its preparation. In the

higher education curriculum, it is clear that it has the spirit of link and match with the

industrial revolution 4.0.

The development of management science in the industrial revolution 4.0

Management science today is the work of research conducted by various researchers

including Adam Smith which introduced the principles of division of labor for the first

time to increase worker productivity with efficiency. Nowadays, management theories are

being and have been used in various industries to discuss the phenomenon of productivity

of management thinking which is at the heart of organizational performance. A major step

towards management progress occurred during the industrial revolution. Furthermore, the

main contribution to management thinking is the result of logic during the era of

modernism and industrial development during industrialization. The management

principles developed by Adam Smith place the foundation of the management thought

process. Moreover, the scientific management theory proposed by Fredrick W. Taylor and

the bureaucratic theory proposed by Max Weber is still practiced today in the industry as a

model that is used as a reference by researchers (Ayesha, 2015).

The direction of the development of management science including marketing

management, operational management, human resource management (people

management), financial management and strategic management must emphasize in the

fields of Science, Technology, Engineering, and Mathematics (STEM). In addition,

management science is expected to be able to create higher thinking order skills (HOTS),

especially for higher education students. According to Bloom's Taxonomy introduced by

Benjamin S. Bloom in 1956, cognitive processes are divided into lower-order thinking

abilities (LOT) and higher-order thinking abilities (HOT). Abilities that include LOT are

the ability to remember, understand and apply, while HOT includes the ability to analyze,

evaluate and create.

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Volume 12 Nomor 1, Januari 2021

In term of journals publication, several researchers have investigated the links

between the industrial revolution 4.0 and various derivatives of management science. For

example, Liboni et al. (2019) investigated the potential impact of industry 4.0 on human

resource management (HR) - with a special focus on employment, job profiles and

qualifications and skills requirements in the workforce - which could have implications for

supply chain management (SCM). Furthermore, Ardito et al. (2019) also presents a

comprehensive picture of innovative efforts made in developing digital technology to

manage the interface between supply chain management and marketing processes (Supply

Chain Management - Marketing). In the era of the industrial revolution 4.0 which is

dominated by technology, artificial intelligence, and robots, the management science

teaching must be using the latest technology. Furthermore, management science must also

provide teaching of noble values, spiritual values, wisdom and also the element of human

touch for both lecturers and students.

CONCLUSION

The industrial revolution is an era of innovation and technology that spread not only

in the European economy but also throughout the world in its early days. The era of the

industrial revolution not only leads to technological innovation but also to new

management prospects. Over time, the range of management knowledge continues to move

forward. During the industrial revolution, the scientific principles of management and the

bureaucratic style add a significant contribution to the management thought process and

worker productivity.

The era of the industrial revolution 4.0 has changed the way of thinking about

management science. More important changes are changes in the perspective of the

concept of management science itself. The management science curriculum developed

must be able to direct and shape students who are ready to face the era of the industrial

revolution with an emphasis on the fields of Science, Technology, Engineering, and

Mathematics (STEM). Management science must already refer to ICT-based learning, the

Internet of Things, big data and computerization to produce graduates who are able to

compete in this unlimited global era. The academic community must also understand how

education and learning are organized, namely student-centered learning, collaborative

learning, meaningful learning and integrated with the community.

The presence of the industrial revolution 4.0 has produced new business concepts,

new jobs, and new professions. However, with the passage of time and the development of

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Volume 12 Nomor 1, Januari 2021

technological empowerment, it could be that business concepts that have been built with

professions and jobs will now be replaced by robots and artificial intelligence machines.

This due to the development of industrial revolution 4.0 is more focused on digital

lifestyle, thinking tools, learning research and the workings of knowledge. A unique

characteristic in the industrial revolution 4.0 is the application of artificial intelligence in

the form of robots used as a substitute for human power. This technological advancement

enables the use of technology in all fields, without exception in management science.

Therefore, management science must align with the industrial revolution 4.0 to remain

relevant to the business or industrial world, the world of teaching or education, the world

of research and community service now and in the future.

Strategic policies need to be formulated in various aspects ranging from institutions,

fields of study, curriculum, resources, and development of research to innovation.

Reconstruction of higher education institutional policies that are responsive and adaptive to

the industrial revolution 4.0 in developing the transdisciplinary science and study programs

needed. Also, the development of a distance learning system, hence reducing the intensity

of lecturer and student meetings. This is later expected to be a solution for students in

remote areas to reach high quality higher education.

The role of lecturers in the development of management science in the industrial

revolution 4.0 era is also crucial. Millennials are expected to be lecturers and demanded to

be more competitive and up to date in this VUCA world. There are five lecturer

qualifications and competencies needed in the industrial revolution era 4.0, including (1)

educational competence, (2) competence in research, (3) competence for technological

commercialization, (4) competence in globalization, and (5) competence in future

strategies, (Retrieved January 21, 2020, from

http://sumberdaya.ristekdikti.go.id/index.php/2018/01/30/era-revolusi-industri-4-0-

saatnya-generasi-millennial-menjadi-dosen- future/).

In the era of the industrial revolution 4.0 which is dominated by technology, artificial

intelligence, and robots, in addition to teaching management science using the latest

technology, management science must also be a pioneer in producing academics who have

noble values, spiritual values, wisdom and also the element of human touch.

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Volume 12 Nomor 1, Januari 2021

RECOMMENDATION

Based on the conclusions, some suggestions that can be considered are:

1. Future articles are suggested to focus on the direction of the development of

management science in the industrial revolution era 1.0, 2.0 and 3.0.

2. Future articles are intended to conduct an empirical test of the direction of the

development of management science in the era of the industrial revolution 4.0 by

using mix methods which can be started with qualitative methods (focus group

discussion or in-depth interviews) then followed by quantitative methods (survey or

experiment).

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