Microfoundations of AI Empowerment Capability to Transform Organizations

The advancement of artificial intelligence (AI) has sparked remarkable anxiety on how to empower AI capability to reap benefits and address the challenges. There is very limited knowledge on the operationalization of AI empowerment capabilities and their effects. Drawing on the microfoundations of dynamic capability (DC) theory, this study fulfils this research gap by presenting an AI empowerment capability and its effects on organizational agility and firm performance. Using a systematic literature review, thematic analysis and in-depth interviews of 20 AI experts in Australia, the findings present theoretical insights, managerial guidelines and policy implications. The results show that technological sophistication, AI governance, AI literacy, training & development, and ethical orientation are the significant dimensions of AI empowerment capability.