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While more firms realize that only applying standardized and general AI technology cannot bring AI capability, the capability building in organizational dimension remain unexplored. This study aims to answer the question “How do enterprises build situated-AI capabilities?” With a dual-case study of two Chinese SMEs, this paper found a knowledge orchestration which transforming AI resources into organizational capabilities. The mechanism of absorbing AI technology and turning it into organizational capabilities is like “learning by changing”, with undergoing organizational change, through four stages: sensing their own managerial cognition, seizing situation-specific AI technology, creating situated-AI knowledge and technology, and re-configuring management experiential cognition. These conclusions contributes in developing theories related to situated AI, and in enriching the theoretical content of knowledge orchestration. In practical, this findings brings insights on planing and managing enterprise digital and intelligent transformation in perspective of AI capability building and organizational learning.
Pi et al. (Wed,) studied this question.