Artificial Intelligence as a Strategic Enabler of Sustainable Business Performance: A Mediation Analysis of Managerial Decision-Making Quality

Abstract

Purpose

This study aims to examine the impact of Artificial Intelligence (AI) on Sustainable Business Performance (SBP) in public sector organizations in Pakistan, with a particular focus on the mediating role of Managerial Decision-Making Quality (MDMQ). The main purpose is to understand how AI improves organizational outcomes through enhanced managerial decision-making processes.

Aim.The aim of this research is to develop and test a conceptual model that explains the direct and indirect effects of Artificial Intelligence on Sustainable Business Performance in the public sector context of Pakistan. Methodology.A quantitative research design was employed using a cross-sectional survey approach. Data were collected from employees working in public sector organizations in Pakistan through a structured questionnaire using a purposive sampling technique. The theoretical framework is adapted from prior research that examined Artificial Intelligence, Social Innovation, and Smart Decision-Making using 430 respondents from Pakistan across public sector organizations. The collected data were analyzed using SPSS and SmartPLS-SEM to test structural relationships and mediation effects. Findings.The results indicate that Artificial Intelligence has a positive effect on Managerial Decision-Making Quality, which in turn enhances Sustainable Business Performance. Furthermore, Managerial Decision-Making Quality acts as a significant mediator between Artificial Intelligence and performance outcomes. Originality/Value.This study contributes to the existing literature by extending an AI-based decision-making framework into the public sector context of Pakistan, providing empirical evidence on how AI-driven managerial decision quality enhances sustainable performance in developing economies. Keywords: Artificial Intelligence; Sustainable Business Performance; Managerial Decision-Making Quality; Public Sector; SPSS; SmartPLS-SEM; Mediation Analysis; Pakistan