Digital Transformation and Organizational Performance: Evidence From Multinational Firms

Abstract

Although artificial intelligence has driven digital transformation in several countries and sectors, many large companies are still lagging behind in adopting these technologies. In fact, business managers remain unaware of the strategic role AI can play. Therefore, explaining the potential of AI and its strategic implications could be a viable solution to address this issue. In this context, this chapter explores how AI can enhance organizational performance by developing dynamic capabilities. Using a survey-based approach, we collected data from multinational firms in Tunisia to examine the indirect effect of AI adoption on organizational performance. Data was gathered from 226 multinational firms and analyzed through structural equation modeling. Our findings reveal that AI adoption positively impacts three key dynamic capabilities: exploration innovation, strategic decision-making speed, and exploitation innovation. These results highlight the strategic benefits of AI adoption in multinational firms, fostering capabilities that, in turn, enhance organizational performance.