Transformational Leadership and AI-driven Decision-making: A Strategic Path to Organizational Agility and Sustainable Value Creation

The study investigates the impact of artificial intelligence (AI)-driven decision-making on organizational agility (OA) and value creation in value-driven contexts of higher educational institutions (HEIs). The current study examines how psychological safety (PS) serves as a mediator and transformational leadership (TL) acts as a moderator in the context of AI-integrated decision-making. This research uses partial least squares structural equation modelling (PLS-SEM) and necessary condition analysis (NCA). The findings indicated that AI-driven decision-making enhances OA. This relationship is mediated by PS, as employees are more likely to adopt AI when they feel secure and engaged. The results indicate that TL negatively moderates the relationship between AI-driven decision-making and OA. This suggests that higher levels of TL may hinder AI’s effectiveness in fostering agility. The study provides actionable insights for leaders, policymakers and managers in education on how AI can drive innovation and strategic advantage.