MBA & Master Glossary
Substitution Effect (AI)
Definition
The substitution effect describes tasks previously performed by humans being taken over entirely by algorithms. It no longer affects only routine administrative work but increasingly cognitive knowledge work – from data analysis and reporting to parts of software development and legal research. For executives, the key question is which parts of their role are substitutable and which are not.
Example: "In reporting the substitution effect is visible: standard analyses are produced by AI."
Why this matters for your MBA
"Substitution Effect (AI)" is one of the terms you will come across when comparing MBA and Executive MBA programmes in Germany, Austria and Switzerland — in admission requirements, accreditation details or programme descriptions. On mba.de you can check how individual business schools handle it and compare programmes independently.
Source: mba.de – independent comparison portal since 2003.