Abstract
PurposeThe aim of this study is to investigate how team-level leader-member exchange (LMX) and the instrumental use of artificial intelligence (AI) by team members influence team psychological empowerment and information systems development (ISD) team performance.Design/methodology/approachA survey approach was employed to collect time-lagged, multi-source data for testing the proposed model of this study (N = 514 responses from 88 teams). PROCESS macro was used to analyze the data to generate empirical results.FindingsThe results suggest that instrumental AI use indirectly influences ISD team performance by enhancing team psychological empowerment. Additionally, it moderates the effects of team-level LMX on team psychological empowerment and ISD team performance. Furthermore, the results demonstrate that the interaction effect of LMX and instrumental AI use on ISD team performance is mediated by team psychological empowerment.Originality/valueWhile research on ISD consistently demonstrates that teams, data, and technology collectively contribute to the success of these projects. What is less known, however, is how the exchange relationship between ISD teams and their leader, as well as technological factors, contribute to ISD projects. This study draws on LMX theory to propose how team-level LMX and the instrumental use of AI by team members influence team psychological empowerment and ISD team performance. The study puts forth a mediated moderation model to develop a set of hypotheses. It offers valuable contributions to AI and LMX, along with implications for ISD team management.