Impact of AI capability, digital strategy, and digital maturity on organisational performance

Abstract In the face of the inevitable digitalisation of enterprises, limited research has investigated the impact of digital strategy, digital maturity, and AI capability on organisational performance. Drawing on the resource-based theory and recent work on AI in the organisational context, this research aims to uncover the configurations under which a firm’s digital strategy, digital maturity, and AI capability would jointly lead to higher performance. This study uses a unique fuzzy-set qualitative comparative analysis methodology to analyse data collected from 56 SMEs to investigate three domains of AI capability, along with digital strategy and digital maturity. The results suggest that high organisational performance does not depend on a single condition but rather on complex synergistic interactions among the studied conditions. The results indicate that three equifinal configurations lead to high performance of SMEs. The study suggests that AI technical resources are mandatory for any viable solution. This study provides pioneering insights into the empirical contributions of AI capability, digital strategy and digital maturity and their relationships to organisational performance in SMEs, by using a configurational approach. The adopted theoretical perspective addresses the need for a holistic approach to uncover the mechanisms underlying digital strategy and digital maturity in relation to AI capabilities in SMEs, and their mutual impact on organisational performance. These results have practical implications for decision-makers and owners of SMEs, providing new insights into the combination of factors that drive high performance.