ARTIFICIAL INTELLIGENCE ADOPTION AND ORGANIZATIONAL PERFORMANCE: THE MEDIATING ROLE OF DECISION-MAKING QUALITY
DOI:
https://doi.org/10.69980/7x4aj948Keywords:
Artificial Intelligence, performance, viewpoint, Dynamic Capabilities, managerial expertiseAbstract
Artificial Intelligence (AI) is becoming popularly known as a strategic enabler of organizational change, but little empirical evidence exists explaining how the adoption of AI translates into improved organizational performance. The paper will fill this gap by analyzing how the quality of decision making mediates the relationship between the use of AI and organizational performance. The paper is based on the theory of Dynamic Capabilities and the Resource-Based View, which suggests that AI is a capability that improves decision-making processes, which will subsequently lead to performance outcomes. The research design adopted was a quantitative and cross sectional research design using a data collected by the researcher on 240 respondent managers. Partial Least Squares Structural Equation Modeling (PLS-SEM) of ADANCO was used to analyze the proposed model. The findings show that the adoption of AI has a robust positive impact on the quality of the decisions and the performance of an organization. The quality of decision-making is also an important factor in the organizational performance. The mediation analysis supports the idea that the quality of decision-making is a mediator of the relationship between the AI adoption and performance, which is why it is the critical element influencing the choice of underlying mechanisms. The results are useful to the literature as they unpack the process that creates organizational value and goes beyond the direct effect models to a more subtle, process oriented viewpoint. The research also provides some practical advice, indicating that the organizations need to supplement the investments in AI with the initiatives that will improve the decision-making processes. In general, the study can give a solid idea of how and under what conditions the adoption of AI can result in excellent organizational performance.
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