AI Strategic Integration and Sustainable Organizational Performance

Artificial intelligence (AI) has evolved from an operational technology into a strategic organizational capability supporting managerial decision-making and governance. However, limited empirical research explains how strategic AI integration contributes to sustainable organizational performance through managerial and governance capabilities. This study examines the relationships among AI Strategic Integration, Augmented Management Capability, Intelligent Governance Systems, and Sustainable Organizational Performance using the Dynamic Capabilities perspective. A quantitative survey was conducted with 200 managerial-level respondents from organizations across multiple industries. Data were analyzed using Partial Least Squares Structural Equation Modeling with 5,000 bootstrap resamples. The findings show that AI Strategic Integration positively influences Augmented Management Capability, which strengthens Intelligent Governance Systems and subsequently contributes to Sustainable Organizational Performance. AI Strategic Integration also has a significant direct effect on Sustainable Organizational Performance and a significant sequential indirect effect through both mediators. The study demonstrates that AI creates organizational value through interconnected managerial and governance capabilities.