Navigating the artificial intelligence (AI) driven algorithmic paradox in hospitality: Unpacking the inverted U-shaped relationship between algorithmic management and employee service innovation

This study investigates how artificial intelligence (AI) driven algorithmic management influences hotel employees service innovation. Drawing on the paradox perspective and ambidexterity theory, the study proposes a curvilinear relationship between AI driven algorithmic management and service innovation, mediated by individual ambidexterity and moderated by paradox mindset. Based on data from a two-wave survey of 406 hotel employees in China, the findings indicate an inverted U-shaped relationship between AI driven algorithmic management and service innovation. Individual ambidexterity mediates the relationship with an inverted U-shaped path from algorithmic management to service innovation. Furthermore, paradox mindset plays a moderating role: the inverted U-shaped pattern is maintained when paradox mindset is lower, whereas a linear relationship emerges as paradox mindset increases. These results offer novel insights into the nuanced effects of algorithmic management and provide suggestions for service enterprises seeking to enhance service innovation through strategic algorithmic practices.