AI Usage Intensity and Organizational Performance: The Mediating Effect of Decision Quality and the Moderating Effect of AI Trust

Abstract

Purpose: This research seeks to analyse the effect of the intensity of AI application on organizational performance via decision quality. Furthermore, this research explores the effect of AI trust (AI literacy) as a moderator variable in the proposed relationship. Methodology Employed: Quantitative and cross-sectional research design was used where survey responses were gathered from employees working in the IT and ITES industries. The proposed hypotheses were examined using the moderated mediation approach (PROCESS Model 7). Key Findings: It is evident that AI application has a significant effect on decision quality and organization performance. Nevertheless, there is a negative moderating effect when there is high AI trust on decision quality and organizational performance. Managerial Implications: Organisations must concentrate on developing decision-making skills and competencies instead of emphasizing artificial intelligence implementation. The use of artificial intelligence requires managers to balance AI through critical reflection. Artificial intelligence education and AI transparency would help improve human-AI interaction. Contribution of the Study: The proposed model offers an interesting contribution by considering decision quality as a mediator between artificial intelligence usage and organisational performance. Furthermore, it considers the role of artificial intelligence trust as a boundary condition, which makes the model more practical and realistic.