Impact of Generative AI on Enterprise Performance in China: Mediating Role of Managerial Relationships

Impact of Generative AI on Enterprise Performance in China: Mediating Role of Managerial Relationships

Jing Ye, Shuyang Wang, Sang-Bing Tsai
Copyright: © 2024 |Pages: 20
DOI: 10.4018/JGIM.347501
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Abstract

This study examines the impact of generative artificial intelligence (GAI) on Chinese enterprises. 320 participants completed electronic surveys, revealing a positive relationship between GAI and corporate performance. Managerial relationships were found to play a crucial role, mediating the influence of GAI on performance. Additionally, the speed of technological change in the industry was identified as a moderator, highlighting the dynamic nature of GAI's impact on managerial relationships and firm performance. These findings underscore the strategic importance of GAI in cultivating managerial relationships and improving enterprise performance, deepening our understanding of the integration of advanced AI technologies and management practices in the Chinese market. Practical implications are offered for decision-makers in technology-intensive industries, providing valuable insights for leveraging GAI to gain a competitive edge and achieve sustainable growth in a rapidly evolving technological landscape.
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1. Introduction

The rapid progress of AI technology has led to the emergence of the field of generative artificial intelligence, which has garnered significant attention and spurred global research endeavors. GAI utilizes extensive language datasets to simulate human thinking and language expression, enabling automated and intelligent conversations (Korzynski, 2023). This technology has demonstrated remarkable accomplishments in various domains, such as customer service, human-computer interaction (HCI), and intelligent translation. In the realm of enterprise management and operations, GAI has shown tremendous potential (Baidoo, 2023). GAI offers unique contributions to enhancing enterprise performance, optimizing managerial decision-making, and improving employee experiences (Cooper, 2023). However, constraint by its previous planned economic system, China's market-oriented formal institutional system has yet to be established (Li, 2009). An informal, personal-relationship-based managerial relationship still plays a role in coordinating and facilitating economic transactions. Managerial relationships, defined as informal connections that top managers maintain with counterparts in external entities, function as an alternative to formal institutions and serve to rectify their flaws (Sheng, 2011). Given the significant role of managerial relationships in business operations and economic transactions in China, it is essential to explore whether GAI can enhance corporate performance by leveraging these managerial relationships.

Debates currently exist regarding whether GAI technology can assist executives in identifying and nurturing relationships with potential business partners or stakeholders. While organizations can effectively harness external resources and strengthen their strategic alliance in the market through intelligent communication and collaboration (Cui, 2022), GAI technology’s automation and intelligence may have unintended consequences for managers’ interpersonal communication skills. These drawbacks may potentially reduce their capacity to build and sustain interpersonal relationship networks within the organization (Mikalef, 2021). Therefore, it becomes crucial to investigate whether GAI technology adoption in a society that highly values interpersonal relationships reinforces the importance of cultivating these connections (Grisoni, 2021; Mannuru, 2023). In this regard, practical recommendations have been proposed to guide managers in establishing and nurturing effective managerial relationships, enabling them to navigate interpersonal dynamics while leveraging GAI technology (Baek, 2023). Furthermore, although GAI has garnered global attention and substantial research efforts, there is a notable knowledge gap concerning its influence on Chinese enterprises’ performance. This knowledge gap extends to GAI’s interactions with managerial roles and its implications for the industry’s technological transformation.

GAI utilizes extensive language datasets to simulate human thinking and language expression, enabling automated and intelligent conversations (Korzynski, 2023). While GAI has demonstrated remarkable accomplishments in various domains, its impact on enterprise management and performance in the Chinese context remains underexplored. This study aims to address this gap by investigating the impact of GAI on Chinese enterprises, with a particular focus on the mediating role of managerial relationships and the moderating effect of industry technological change speed.

This research questions are twofold: How does GAI influence enterprise performance in China, and what is the role of managerial relationships in this process? How does the speed of technological change in different industries shape the impact of GAI on managerial relationships and subsequently on firm performance? By addressing these questions, we contribute to the nascent literature on GAI applications in management and provide novel insights into the boundary conditions of GAI's effectiveness in driving firm success. Moreover, our study offers practical implications for Chinese enterprises seeking to harness the power of GAI in enhancing their managerial processes and competitive advantages.

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