The Impact of Artificial Intelligence Capabilities on Decision-Making Performance

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Abstract
Artificial intelligence (AI) is touted as a game changer for managers, yet few empirical studies have measured whether AI improves managerial decision-making performance. The authors argue that AI enhances decision-making when companies have the digital capabilities to support its adoption and a business strategy to justify it. Drawing from the AI and the decision-making literatures, a research model is proposed linking AI capabilities, digital capabilities, and digital business orientation to decision-making performance. A longitudinal study of managers and structural equation modeling were used to test the model. The results show that while AI capabilities enhance decision making performance, their strongest effect is on decision speed. The findings also confirm the roles of digital capabilities and business orientation in mediating the impact of AI capabilities on decision-making outcomes, underscoring the need for companies to develop complementary assets to maximize the impact of their AI investments.

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