The role of artificial intelligence in strengthening dynamic capabilities: Proposal for a conceptual model

Abstract

Using organizational innovation as a mediating variable and a digitally focused organizational culture as a moderating variable, this literature review investigates the function of artificial intelligence (AI) in creating dynamic capacities. According to recent studies, AI improves an organization's capacity to spot opportunities, take advantage of shifts in the market, and reallocate resources all of which support ongoing strategic adaptation. However, how AI is incorporated into organizational procedures, practices, and culture has just as much of an impact as the technology itself. In theory, this study advances our knowledge of how digital technologies contribute to the development of dynamic skills by putting forth an integrative conceptual model that connects technology, innovation, and culture. It draws attention to the organizational processes that enable AI to act as a catalyst for resilience, learning, and agility. From a managerial standpoint, this review emphasizes that in order to turn AI's potential into a long-term competitive advantage and strategic performance, leaders must invest not only in AI tools but also in creating an open digital culture and encouraging organizational innovation. Lastly, future study directions are proposed, such as the empirical investigation of these linkages in other sectors and new situations.