Artificial Intelligence Capabilities and Sustainable Competitive Advantage: A Cross-Functional Perspective

Abstract

AI has become one of the strategic resources that can assist organizations to achieve sustainable competitive advantage (SCA) in a constantly challenging and data-driven business environment. The role of AI capabilities will be viewed in the cross-functional perspective in this research, and it will specifically be considered in terms of how it may be incorporated by the key areas of the organization, such as operation functions, marketing, finance, human resource management. The research relies on two conceptualizations of AI capabilities, including the Resource-Based View (RBV) and the Dynamic Capabilities Theory, upon which the firm applies the conceptualization of AI capabilities, the combination of technology infrastructure, data resources, and the organizational capabilities resulting in higher firm performance.

After the qualitative comparative design by relying on secondary data and case expertise, the research determines the efficacy of the cross-functional integration of AI to realize the economies of scale, innovation, and superior decision-making. The results indicate that organizations that take AI as a multi-faceted and coordinated target to all operations have increased opportunities of developing resiliency and difficult-to-mimic capabilities and hence, sustainability in competition in the long run.

Important to the body of literature is that the paper recommends the need to have a cross-functional AI capability framework, and the importance of aligning organizations as well as governing data and working with people and AI. It also has certain practical implications to the managers who might want to apply AI as a strategic engine of further performance in the competitive markets.