Does AI orientation facilitate operational efficiency? A contingent strategic orientation perspective

Abstract

Despite the importance of Artificial Intelligence (AI) in operations management, the relationship between AI orientation––the strategic direction towards the implementation and integration of AI into the organization––and operational efficiency remains unclear. Drawing upon a strategic orientation perspective, we propose that the relationship between AI orientation and operational efficiency is positive, but it is subject to the influences of market, industry and institutional environments. We analyzed a sample of 1597 A-share firms listed in Shanghai and Shenzhen Stock Exchanges in China from 2012 to 2020. We deployed fixed-effect ordinary least square regressions, as well as instrumental variable two-stage least squares (IV-2SLS) models. Our findings contribute to the literature on strategic orientation and operational improvement, and provide practical insights into whether and when firms should develop AI orientation to enhance operational efficiency.