Harnessing AI for organizational resilience: the moderation role of managerial discretion

Purpose With the rapid development of artificial intelligence (AI), manufacturing firms increasingly leverage AI to improve risk detection and response capabilities. Yet, it remains unclear whether and how AI application effectively enhances organizational resilience, especially long-term resilience. Grounded in dynamic capability theory (DCT), this study aims to investigate the relationship between AI applications and organizational resilience – captured through volatility and growth – and further explores how this relationship is moderated by managerial discretion, conceptualized across organizational, environmental and institutional dimensions. Design/methodology/approach Using linear panel regression models with fixed effects, we analyze data from 3,688 listed Chinese manufacturing firms from 2013 to 2023 to test the research model and hypotheses. Findings Results show a significant positive relationship between AI application and organizational resilience, reflected in reduced volatility and sustained growth. Moreover, managerial discretion shapes this relationship: organizational discretion and environmental discretion strengthen the effects of AI, while institutional discretion shows heterogeneous moderating effects – both firm ownership structure and regional institutional environment positively influence volatility, but the former weakens growth and the latter remains insignificant. Originality/value This study deepens the application of DCT by analyzing the influence mechanism of AI on organizational resilience. It also extends research from the reaction resilience to specific shocks toward the long-term resilience in uncertain environments. Additionally, by introducing managerial discretion as a boundary condition, it expands its application scenario and provides enlightenment for firms to create a suitable environment of managerial discretion to better leverage the value of AI for resilience.