AI adoption intensity and sustainability performance through organizational change and environmental dynamism in Saudi Arabia manufacturing companies

Abstract

As economies and societies continue to develop rapidly, businesses are now placing greater emphasis not only on financial performance but also on environmental and social performance. Therefore, there is increasing attention to how businesses can use artificial intelligence as a primary driver of technological innovation to promote environmental and social performance. This research aims to provide empirical evidence regarding the relationship between the degree to which AI is adopted within business organizations and its impact on firms’ ability to achieve both environmental and social outcomes in Saudi Arabia’s manufacturing sector. Drawing on both dynamic capabilities theory and innovation diffusion theory, this study collected 375 responses from employees of manufacturing companies in Saudi Arabia. The empirical results also support that environmental dynamism moderates the relationships between organizational change and both sustainability dimensions. The theoretical contribution is an integrated model that connects technology adoption to corporate sustainability. In practice, the findings of this study provide an essential guide for Saudi Arabian executives seeking to maximize the sustainable development potential of their firms and underscore the importance of investing strategically in flexible organizational change capabilities in dynamic markets.