Navigating innovation in the age of AI: how generative AI and innovation influence organizational performance in the manufacturing sector

Purpose Generative artificial intelligence (GenAI) is one of the most diffused AI technologies, capable of generating manifold forms of content, including music, text, images and synthetic data. The purpose of this study is to analyze the determinants that affect GenAI acceptance and its outcomes on both the explorative and exploitative forms of innovation. Design/methodology/approach The study employs a conceptual framework based on the technology-organization-environment (TOE) paradigm. Through Smart-PLS analysis, it examines empirical data retrieved from an online survey where 302 manufacturing companies took part. Findings It is found that GenAI has the potential to facilitate both exploratory and exploitative innovation, particularly via the moderating effect of environmental dynamism. Hence the adoption of GenAI has potential to improve organizational performance. Originality/value The study is the first empirical project to investigate factors that influence manufacturing firms' adoption of GenAI. As the first project to have integrated the TOE paradigm when examining the impact of environmental dynamism on exploratory and exploitative innovation, the study emphasizes the double innovation potential of GenAI in organizational performance improvement.