Title

Competitive Advantage Through Artificial Intelligence: Toward a Theory of Situated AI.

Authors

Kemp, Ayenda

Abstract

How can firms establish competitive advantages using artificial intelligence (AI)? Although AI is beginning to permeate business activities, our understanding of how AI can be used to create unique value is limited. To address this void, I introduce the concept of situated AI and illuminate its importance for establishing AI-driven competitive advantages. The paper highlights the organizational activities involved in situating AI—specifically, grounding, bounding, and recasting. It also explains the conditions in which these situating activities better enable firms to develop AI-driven capabilities that are firm-specific, cost-effective, and appropriate for opportunities in the strategic environment. Thus, this paper provides an integrative framework for connecting a firm's AI pursuits to competitive advantage.

Subjects

ARTIFICIAL intelligence; COMPETITIVE advantage in business; BUSINESS enterprises

Publication

Academy of Management Review, 2024, Vol 49, Issue 3, p618

ISSN

0363-7425

Publication type

Academic Journal

DOI

10.5465/amr.2020.0205