The Impact of Artificial Intelligence on the Transformation of Organizations: Effects on Innovation, Knowledge Transfer and Global Competitiveness

Abstract The article outlines the profound and far-reaching impact of the implementation of Artificial Intelligence (AI) on core areas of organizational performance, with particular reference to issues such as innovation, transfer of knowledge, competitiveness, reduction of development time and global collaboration. Utilizing structural equation modeling with PLS-SEM, the research rigorously tested for validity and reliability of the constructs, thus providing a strong theoretical foundation to the empirical analysis conducted on a diverse sample of 371 companies distributed in various industries. From the empirical findings, it is discovered that AI not only facilitates but also contributes great value to the innovation performance, coupled with the enhancement of knowledge transfer in organizations. On the other hand, it was highlighted that the utilization of AI-based solutions leads to a dramatic increase in the competitive advantage of organizations, via the streamlining of internal processes and establishment of distinctive capabilities, which provide a long-term competitive advantage. Besides, another important aspect found is that utilising AI reduces substantially the developmental time, which makes an organization more effective in a scenario of rapid change and intense competition. In the case of international cooperation, even though the impact was evaluated as moderate, the results continue to reflect the high value of AI in international networks and global cooperation. In addition to these empirical observations, the theory contribution of the research is significant, as it guarantees the idea that AI is not just a mere technology tool but asserts itself as a strategic one capable of triggering not just innovation, but organizational competitiveness. The study adds to the body of literature by providing empirical evidence to demonstrate how AI allows not only automation but also generation and dissemination of context-relevant knowledge. The insights applied to business leaders emphasize making AI adoption a central component of business strategy, situating innovation teams around AI-related competencies, and integrating it into knowledge management and global collaboration flows. In conclusion, this paper suggests the necessity of creating a strategic response in Adopting Artificial Intelligence to equip business leaders with the necessary tools and intelligence to enhance organizational performance in the intricate environment of the contemporary digital economy.