Impact of Artificial Intelligence on Organisational Performance and Managerial Decision-Making

Jaya Arun Mehar

Authors

Jaya Arun Mehar

Keywords:

artificial intelligence, organisational performance, managerial decision-making, AI adoption, organisational readiness

Abstract

Artificial intelligence (AI) is now becoming a part of the working life of organisations, but the data on its impact on management decisions and organisational outcomes is yet scarce and varied, and on the conditions that enable it to succeed are even less so. The study investigates how the use of AI and organizational preparedness affect managerial decision-making quality and organizational performance. Managers and professionals were presented with a structured questionnaire with five-point Likert scale items and the data were analysed by SPSS-based procedures such as descriptive statistics, Cronbach's alpha, Pearson correlation, multiple regression, bootstrapped indirect effects, independent-samples t-test and one-way ANOVA. Good reliability was obtained for the measurement scales. Organisational readiness and AI use proved to be important positive factors in explaining the variance in decision-making quality, both individually and together, accounting for a significant amount of the variance in the actual quality of decision-making. In the same way, the quality of decisions and the readiness of organisations for AI had positive strong effects on the performance of organisations. The process of quality decision-making, further, partially mediated the relation between AI adoption, OR and OP. All the hypotheses were confirmed. The study reveals that the usefulness of AI depends on its ability to be incorporated into organisational processes for decision making, and supported by good and accurate data, employee skills, and management support and commitment.

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