The impact of AI-based information system integration embedded with ESG considerations on perceived overall organizational performance

This study examines how artificial intelligence (AI)-based information system integration, conceptualized as a perceived integration capability embedded in organizational workflows, is associated with perceived overall organizational performance. It focuses on the mediating roles of dynamic capability activities, employee AI action readiness, and environmental, social, and governance (ESG) practices, defined as routinized monitoring, disclosure, and governance activities. Using survey data from 496 employees in firms with AI systems, the proposed framework is tested through structural equation modeling and supplemented by machine-learning-based predictive analysis. The results indicate that AI-based information system integration is associated with perceived overall organizational performance mainly through indirect pathways. It is positively associated with employees’ awareness of AI-supported sensing, seizing, and reconfiguring activities and with their readiness concerning the practical applicability of AI-supported information in daily work, both of which are associated with stronger ESG practices and higher perceived overall organizational performance. Its direct association with ESG practices is positive but weaker than the indirect pathways through dynamic capability activities and employee AI action readiness. Bootstrapped analyses support parallel and sequential indirect effects, while multi-group analyses show that the overall relationship pattern is stable across small and medium-sized enterprises and large enterprises. This study contributes by shifting attention from AI adoption to the perceived integration of AI into organizational workflows and by identifying dynamic capability activities, employee AI action readiness, and ESG practices as complementary pathways linking AI integration to perceived overall organizational performance.