A Model of Digital Business Transformation to Industry 5.0: Insights from AI Adoption in Omani SMEs

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The Sultanate of Oman is home to thousands of Small and Medium Enterprises (SMEs), all of which share a common trait: the integration of technology into their management practices. A significant number of these SMEs operate as digital businesses. Moreover, the adoption of Artificial Intelligence (AI) across various industrial sectors is driving the transformation of businesses toward an Industry 5.0 paradigm. This research aims to test AI acceptance in management practices through performance expectancy, effort expectancy, social influence as predicators of attitude and facilitating condition as a moderator. To test the model, we collected data from Omani SMEs by sending online and printed surveys. Using Partial Least Squares Structural Equation Modelling (PLS-SEM) on data from 288 SMEs in the first quarter of 2024 (3 months). PLS-SEM was employed to determine the interrelated dependence of relationships among variables. After testing the model, the results reveal that positive and significant impact of performance expectancy, effort expectancy, social influence, attitude and facilitating conditions on management practices. The results also reveal that facilitating conditions and suitable conditions of Omani entrepreneurs’ attitudes increase their willingness to adopt more AI in their managerial practices. The research highlights the multifaceted impacts of AI acceptance in management practices. By understanding these implications — practical, theoretical and social — organisations can better navigate the challenges and opportunities presented by AI technologies. Embracing this change will not only enhance operational efficiency but also position organisations for future success in an increasingly digital landscape.