From Fragmentation to Integration: Finding the Psychological and Instrumental Common Ground for Algorithmic Management and Marketing

Algorithms drive automated management and marketing decisions, yet researchers study their effects on employees and consumers in separate streams, and neither captures how the two stakeholders are digitally enacted. Drawing on stakeholder theory and value-sensitive design, we develop an integrated framework explaining how algorithmic management and marketing jointly transform stakeholders’ well-being. Positioned within the techno-human being view, it treats the algorithm as a shared identity infrastructure and defines algorithmic control as using computational systems to direct, evaluate, and discipline a party to an exchange, enacted across the organization, its employees, and its consumers rather than configured by management alone. Multi-dimensional well-being is the psychological outcome of these algorithmics, encompassing both reduced ill-being and the sustained satisfaction, trust, and engagement that design for stakeholders’ flourishing supports. We theorize bidirectional spillover pathways, carried instrumentally through algorithmic control and psychologically through emotional contagion and appraisal, that produce negative spirals, in which controlling algorithms erode employee engagement and frustrate consumers, or positive synergies, in which supportive algorithms enhance well-being in both groups. Sustainable value creation therefore requires transparent, ethical algorithmic governance, and we propose a multi-level governance including ethics boards, value-sensitive development teams, and stakeholder voice mechanisms as a reflexive practice.