DECISION-MAKING FACTORS FOR ADOPTING ARTIFICIAL INTELLIGENCE TECHNOLOGIES AND TRANSFORMING SOURCES OF SUSTAINABLE COMPETITIVE ADVANTAGE

Abstract

Technologies based on artificial intelligence are increasingly replacing and augmenting humans in managerial tasks such as decision-making. Modern artificial intelligence (AI) technologies are capable of performing cognitive functions previously associated only with the human mind. According to the company’s resource concept (RBV), people’s cognitive abilities are a source of non-copyable competitive advantages because they are difficult to simulate, so AI technologies can change the sources of competitive advantages. This study aims to identify the factors that influence the decision of industrial companies to adopt artificial intelligence technologies, as well as to examine the relationship between the adoption of AI technologies with the effects of replacing and/or complementing the cognitive abilities of employees and their impact on the formation of a competitive advantage. The study was conducted on the database of 147 industrial companies, empirically estimating the occurrence of the substitution effect during the introduction of AI technologies. The complementarity effect was estimated using two models: a random effect probit model with random effects (random effect probit) and a fixed effect logit model with fixed effects (fixed effect logit). This made it possible to assess the intra-firm dynamics of resource changes during the implementation of AI technologies in the business process - that is, to trace the effect of resource substitution during the implementation of AI. The results showed that: (1) The decision to invest in AI technologies depends on factors such as the availability of skills to implement AI, the cost of implementing new technologies and the level of current costs in the company as a whole, the expectation of financial and economic impact. (2) The decision to invest in AI is significantly more prevalent among companies that are currently waiting to implement it. The benefits of such investment are manifold. Firstly, it allows for a reduction in the time taken to complete operations. Secondly, it enables a reduction in the number of employees required, due to a reduction in the volume of routine operations. Thirdly, it allows for a reduction in the cost of personnel management. Finally, it facilitates a greater speed of development and promotion of new products. (3) The introduction of AI has the greatest impact on the formation of non-copied competitive advantages, particularly in the following areas: marketing and analytics, development and IT, sales and customer service and the development of new products. (4) The introduction of AI gives rise to both a substitution effect and a complementarity effect, which together result in a shift in the sources of competitive advantages. While the replacement of traditional, domain-specific human cognitive capabilities with numerous computing capabilities of AI leads to the destruction of existing advantages, the complementarity of human and machine capabilities allows for the creation of new, permanent non-copied advantages. The company’s resource concept is augmented, and it is shown that heterogeneous unrelated resources, such as human capital and machinery, can also serve as a source of distinctive competitive advantages.