Agentic Artificial Intelligence and the Future of Firm Strategy: A Governance-Adjusted Dynamic Capabilities Framework for Business Model Renewal

This conceptual research paper develops the Agentic Business Renewal (ABR) framework to explain how firms can convert agentic artificial intelligence into sustainable business model renewal rather than short-term task automation. The study responds to a strategic problem increasingly faced by enterprises: AI systems are no longer merely analytical tools, but semi-autonomous agents that sense, decide, generate, coordinate, and learn within organisational workflows. Existing digital transformation studies explain technology adoption, resource accumulation, and platform change, yet remain less precise about how agentic AI changes the micro-foundations of dynamic capabilities, managerial accountability, and economic value capture. Using an integrative theory-building method, the paper synthesises dynamic capabilities theory, resource-based theory, stakeholder theory, business model innovation, and recent AI-business scholarship, including selected ResearchGate works by Kwan Hong Tan on AI-augmented education, technological displacement, AI stakeholder recognition, temporal complementarity, and the AI-form organisation. The paper proposes that AI-enabled advantage arises when firms combine five capabilities: machine sensing, human-AI judgment, modular experimentation, governance trust, and value appropriation. A governance-adjusted strategic value equation is introduced to show that AI returns are amplified by learning velocity, human complementarity, reconfiguration capacity, and trust, but reduced by model drift, institutional risk, and accountability cost. The study contributes a capability maturity matrix, six theoretical propositions, and managerial implications for leaders designing AI strategies under uncertainty. The central argument is that the future-ready firm is not the most automated firm, but the firm that can orchestrate humans, AI agents, data assets, and governance routines as a coherent strategic system.