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AI Literacy for the top management: An upper echelons perspective on corporate AI orientation and implementation ability

Author

Listed:
  • Marc Pinski

    (Technical University of Darmstadt)

  • Thomas Hofmann

    (Technical University of Darmstadt)

  • Alexander Benlian

    (Technical University of Darmstadt)

Abstract

We draw on upper echelons theory to examine whether the AI literacy of a firm’s top management team (i.e., TMT AI literacy) has an effect on two firm characteristics paramount for value generation with AI—a firm’s AI orientation, enabling it to identify AI value potentials, and a firm’s AI implementation ability, empowering it to realize these value potentials. Building on the notion that TMT effects are contingent upon firm contexts, we consider the moderating influence of a firm’s type (i.e., startups vs. incumbents). To investigate these relationships, we leverage observational literacy data of 6986 executives from a professional social network (LinkedIn.com) and firm data from 10-K statements. Our findings indicate that TMT AI literacy positively affects AI orientation as well as AI implementation ability and that AI orientation mediates the effect of TMT AI literacy on AI implementation ability. Further, we show that the effect of TMT AI literacy on AI implementation ability is stronger in startups than in incumbent firms. We contribute to upper echelons literature by introducing AI literacy as a skill-oriented perspective on TMTs, which complements prior role-oriented TMT research, and by detailing AI literacy’s role for the upper echelons-based mechanism that explains value generation with AI.

Suggested Citation

  • Marc Pinski & Thomas Hofmann & Alexander Benlian, 2024. "AI Literacy for the top management: An upper echelons perspective on corporate AI orientation and implementation ability," Electronic Markets, Springer;IIM University of St. Gallen, vol. 34(1), pages 1-23, December.
    • Handle: RePEc:spr:elmark:v:34:y:2024:i:1:d:10.1007_s12525-024-00707-1
    DOI: 10.1007/s12525-024-00707-1
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    More about this item

    Keywords

    AI orientation; AI implementation; AI literacy; Attention-based view; Upper echelons theory;
    All these keywords.

    JEL classification:

    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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