Artificial Intelligence Adoption and Organizational Effectiveness: The Sequential Mediating Roles of Digital Transformation, Strategic Agility, and Innovation Capability with the Moderating Effect of Top Management Support

Abstract

Artificial intelligence (AI) has become a game-changer in the world of business and is a key driver of corporate transformation in today's context. AI technologies are becoming more popular as aids for businesses to make decisions, boost efficiency and effectiveness. But, the application of AI does not always have a direct impact on the effectiveness of organizational functioning, and it requires some internal organizational mechanisms. The field of study examines the role of artificial intelligence in improving organizational effectiveness, considering the mediating variables of digital transformation, strategic agility and innovation capability as well as the moderating variable of top management support. AI tools play a vital role in harnessing the latest technologies when businesses are in the process of digital transformation. Digital transformation increases the ability to respond and be flexible, facilitates strategic agility, strengthens the innovation capacity and in the end improves the effectiveness of the organisation. This connection can be amplified and reinforced by the leadership and commitment of high-level management that can set direction, resources and leadership. This study was an explanatory research using quantitative approach and data was collected from the managers/executives of the organizations that have adopted AI. Data collection is used through dealing with structured questionnaire, which has been developed according to the valid scales. Purposes sampling is used in the selection of the respondents where respondents with know-how are selected. The data are analyzed by SmartPLS that involved measurement model assessment, structural model evaluation, sequential mediation testing, and interaction and bootstrapping techniques. The study contributes to the field of Digital Transformation and Strategic Management that offers a useful explanation of how the use of AI can help organizations be more effective through the use of sequential organizational capabilities.