Artificial Intelligence and Machine Learning as Catalysts for Dynamic Capabilities: A Framework for Organizational Innovation and Competitive Advantage

Abstract

Information Technology firms are operating in competitive and volatile market conditions and are using Artificial Intelligence (AI) and Machine Learning (ML) technologies to augment dynamic capabilities and transform their organizational strategies to achieve market success. This study attempts to explore the effect of AI/ML capabilities on dynamic capabilities, organiza-tional innovation, and competitive advantage within IT firms in Chennai. The research examines how AI/ML aids organizations to sense, seize, and trans-form opportunities to foster innovation and improve market positioning by leveraging the dynamic capabilities framework. The sample data collected from 415 IT professionals were analyzed using IBM SPSS and Jamovi. The study findings show a moderate level of AI/ML adoption, with significant variability in its effects on organizational innovation and competitive ad-vantage. The results confirm that AI/ML capabilities mediate the relationship between dynamic capabilities and organizational innovation, while organiza-tional innovation further drives competitive advantage. The study indicates AI/ML capabilities enhance organizational agility, sustained competitiveness and promote innovation. The study aids to the research literature represent-ing the strategic importance of AI/ML in driving dynamic and innovative outcomes. The study findings offer insights for practitioners and emphasize the need for future research to explore broader applications of AI/ML across industries and regions..