Artificial Intelligence (AI) and How It Changes Organizations

Artificial intelligence (AI) joins the ranks of the most discussed technology-related topics and is widely acknowledged as a window into humanity’s future. The promise of AI is enormous and involves research in large amounts of data and measures to support activities in diverse types of organizations, including for-profit businesses. This post will address three questions linked with AI’s uses, benefits, disadvantages, and helpfulness in establishing competitive advantage.

Purpose, Definition, and Benefits of AI for Organizations

Since AI’s emergence as a scientific field, various definitions of the term have been formulated, and they shed light on AI’s central purpose. One popular definition positions AI as “a system’s ability to interpret external data correctly, learn from it, and use such learnings to achieve tasks and goals through flexible adaptation” (Haenlein & Kaplan, 2019, p. 5). AI is juxtaposed to natural intelligence exhibited by humans and non-human animals.

It incorporates the study of intelligent agents or various human-made systems capable of mimicking the living organism’s cognitive functions. As the definition suggests, the field’s purpose revolves around producing software that would replace the need for human decision-making at least partially. The specific goals of AI subfields are achieving automated reasoning, maximizing software’s problem-solving capacity, enabling software to perform scheduling/planning activities, and perfecting machine perception applications (Haenlein & Kaplan, 2019; Loureiro et al., 2021). Therefore, AI’s general purpose is multi-dimensional and concerned with various decision-making contexts.

AI-based solutions benefit organizations by boosting productivity in various ways. For organizations involved in product manufacturing, there are industrial AI applications and intelligent robots. Such decisions increase overall equipment efficiency scores, improve product quality control measures by removing the risks of human error, and control quality consistency (Loureiro et al., 2021). Manufacturers also benefit from AI when it comes to product logistics and warehouse control and management. AI-based software can identify and eliminate unnecessary transactions and reduce time expenditures on problem-solving and effort coordination (Loureiro et al., 2021). Another set of benefits that is not limited to any subfields is the excellent management of repetitive organizational tasks (Loureiro et al., 2021). In human employees, excessive involvement in highly repetitive processes can affect the creative potential while also causing exhaustion and increasing the risks of mistakes stemming from it (Loureiro et al., 2021). AI’s positive implications for organizations are, therefore, great in number.

Applications, Their Benefits, and Drawbacks of the Topic

AI applications are numerous, and their positive effects are all-encompassing. Some popular applications are AI-powered digital assistants, industrial robotics, self-driving vehicles, AI-enhanced clinical trials, targeted marketing and predictive analytics, supply chain management, and cybersecurity solutions (Haenlein & Kaplan, 2019; Loureiro et al., 2021). AI’s hypothetical and well-documented benefits for organizations include quality management, processes’ efficiency, the speed of operations, coordination, and reductions in repetitive activities performed by the human workforce (Haenlein & Kaplan, 2019; Loureiro et al., 2021). The beneficial influences of incorporating AI into operations extend beyond task automation.

AI’s possible drawbacks relate to the consumption of companies’ resources, effects on employment, and ethical constraints. To start with, AI causes job losses for low-skilled employees primarily involved in repetitive tasks (Loureiro et al., 2021). Next, AI is resource-consuming; the implementation and customization of AI are expensive and demanding both financially and computationally, which is why AI’s adoption in the business field is still slow (Barta & Görcsi, 2021). For instance, deep learning algorithms’ implementation can take weeks of training or the need for outsourcing these activities (Barta & Görcsi, 2021). Finally, AI’s limited creativity and the inability to think ethically might cause AI-based chatbots to provide factually relevant but dissatisfying responses (Barta & Görcsi, 2021). Considering these weaknesses, the introduction of AI should always be a well-considered strategic decision.

How Organizations Can Achieve Competitive Advantage with AI

AI applications focused on business-client interaction can strengthen customers’ purchasing intention, which is among the central sources of competitive advantage, so organizations can maximize their competitiveness by integrating AI into customer relationships and analysis. Specifically, multi-component AI-powered customer relationship management (CRM) systems can promote competitiveness in business-to-business contexts by supporting the maintenance of profit-maximizing client relationships (Chatterjee et al., 2021). Depending on the industry and operational environments, organizations can select appropriate client analytics AI tools to reach the target customer more effectively compared to their immediate competitors. For instance, voice assistance applications, chatbots, and speech analytics platforms, including Eureka Call Miner, are currently available to capture and systematically analyze customers’ narratives, concerns, and unmet expectations (Varsha et al., 2021). Customer-related insights derived from AI-powered systems can become an invaluable driver of strategic corrections.

Companies can also become more competitive by using AI for quality control and repetitive operations, thus achieving differentiation. Repetitive exhaustive tasks could be delegated to AI software so that human employees have more time to work on creative solutions, thus strengthening their companies’ unique positioning and product differentiation (Chatterjee et al., 2021). Manufacturing organizations can consider introducing AI robots and industrial process control systems (Loureiro et al., 2021). By facilitating manufacturing operations’ accuracy and predicting failures associated with equipment and products, such solutions can promote differentiation through exceptional quality.


To sum up, AI is concerned with the interpretation of data by inanimate systems and gives rise to multiple applications, ranging from customer research to industrial robot systems. AI’s organizational benefits are diverse, including processes’ efficiency, better quality management, and a profound understanding of customers’ needs. For organizations, the use of AI-powered CRM systems, customer analytics solutions, and production process control systems can become advantage-maximizing strategies.


Barta, G., & Görcsi, G. (2021). Risk management considerations for artificial intelligence business applications. International Journal of Economics and Business Research, 21(1), 87-106. Web.

Chatterjee, S., Rana, N. P., Tamilmani, K., & Sharma, A. (2021). The effect of AI-based CRM on organization performance and competitive advantage: An empirical analysis in the B2B context. Industrial Marketing Management, 97, 205-219. Web.

Haenlein, M., & Kaplan, A. (2019). A brief history of artificial intelligence: On the past, present, and future of artificial intelligence. California Management Review, 61(4), 5-14. Web.

Loureiro, S. M. C., Guerreiro, J., & Tussyadiah, I. (2021). Artificial intelligence in business: State of the art and future research agenda. Journal of Business Research, 129, 911-926. Web.

Varsha, P. S., Akter, S., Kumar, A., Gochhait, S., & Patagundi, B. (2021). The impact of artificial intelligence on branding: A bibliometric analysis (1982-2019). Journal of Global Information Management (JGIM), 29(4), 221-246. Web.

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