AI Adaptability and Project Success: Roles of Decision-Making and Transformational Leadership

Abstract

Artificial intelligence (AI) is the catalyst of digital transformation in project-based industries, though the means by which AI contributes to success in projects are not well understood. The article examines the association between AI adaptability and project success by exploring the mediating mechanism of IT-enabled decision-making and the moderating effects of transformational leadership. Based on Dynamic Capability Theory and Transformational Leadership Theory, a moderated mediation model is developed and empirically tested using quantitative survey data from AI-enabled project professionals. Direct, indirect, and conditional effects among the variables of interest are investigated using Structural Equation Modeling (SEM). SEM was used to analyze survey data from 300+ project professionals. Results indicated that AI adaptability significantly improved project success (β = xx, p < 0.05), while AI-supported decision-making partially mediated this relationship. Transformational leadership further strengthened the indirect effect of AI adaptability on project success. The findings suggest that AI adaptability positively affects project success, and AI-facilitated decision-making partially mediates this relationship. In addition, transformational leadership has a significant moderating effect on the association between AI adaptability and decision-making, such that this moderation is strengthened at higher levels of transformational leadership in mediating the indirect relationship with project success. These outcomes help support the understanding that, in the context of a project, the true value of the implementation of AI is found in the preparation of the organization, the quality of decisions, and the type of leadership support. The research builds on project management and information systems by offering a new integrative framework to understand the effect of technological capability and managerial leadership on project performance. Practically, the outcomes provide companies with opportunities to leverage their AI projects to enhance the success of their future projects.