The Automation–Augmentation Paradox in New Product Development: A Curvilinear Model of Digital Employee Adoption and Perceived Teamwork Performance

This study investigates the paradoxical impact of AI-driven digital employees on the new product development project performance. Integrating sociotechnical systems and ambidexterity theory, we tested a moderated mediation model using three-wave, time-lagged survey data from 396 employees engaged in new product development projects. The findings reveal an inverted U-shaped relationship between digital employee adoption and perceived teamwork performance. This nonlinear effect is explained by the differential mediation of ambidextrous innovation. Digital employee adoption promotes exploitation linearly but has a curvilinear effect on exploration. Furthermore, customer participation in value cocreation strengthens the exploitation path while mitigating the potential negative effects on exploration.