Artificial Intelligence Adoption and Organisational Performance: The Mediating Role of Knowledge Management Capability

Artificial intelligence (AI) has become an important organisational capability that supports decision-making, service innovation, process redesign, and operational efficiency across industries. Despite increasing organisational investment in AI technologies, evidence on how AI translates into superior organisational performance remains inconclusive. Drawing on the Resource-Based View (RBV) and the Knowledge-Based View (KBV), this study proposes that Knowledge Management Capability (KMC) explains how AI adoption contributes to organisational performance. It suggests that implementing AI has a positive effect on network performance, particularly by strengthening KMC, namely knowledge acquisition, sharing, storage, and use. The study develops and validates a mediation model to investigate the relationships among AI adoption, KMC, and organisational performance across operational, financial, and innovation dimensions. For managers and/or professionals in digitally transforming organisations, a positivist, deductive, and quantitative cross-sectional survey design is specified. AI adoption positively influences organisational performance; AI adoption positively influences KMC; KMC positively influences organisational performance, which AI-Performance partially mediates due to AI; and KMC does not have any causality. This study contributes to the literature by integrating RBV and KBV to explain the mechanism through which AI adoption improves organisational performance. It further demonstrates that knowledge management capability functions as a critical organisational capability linking AI-enabled resources with operational, financial, and innovation outcomes.