With the increasing adoption of artificial intelligence (AI), a critical gap persists in understanding how enabling factors, challenges and organizational outcome are interrelated. The current work addresses this need by examining how innovation – particularly through technological, environmental and organizational readiness – serves as a foundation for successful AI adoption. The study further examines the mediating role of innovative practices in AI adoption and how challenges moderate the impact of AI adoption on workforce productivity.
Data for the quantitative survey was collected from 490 employees working in telecommunication industry of Pakistan, using a convenience sampling technique. Partial least squares structural equation modeling (PLS-SEM) was employed to examine both the mediation and moderation effects within the proposed model.
Technological readiness (TR) and organizational readiness (OR) emerge as a significant internal driver influencing human resource productivity (HRP), with challenges in AI Adoption (CAA) serving as a positive moderator in these relationships. In contract, environmental readiness (ER), although important, its influence on HRP is comparatively weaker when moderated by CAA, suggesting that external challenges may have a limited impact on shaping internal HR outcomes.
Organizations can drive substantial value from this study by deepening their understanding of the essential prerequisites for effective AI adoption. The findings offer actionable guide for decision-makers to examine their environmental, technological and organizational readiness, assess potential challenges and craft informed strategies to maximize the integration of AI tools. This strategic alignment can enhance workforce productivity and ensure a more successful and sustainable AI implementation.
It reflects that prerequisites, innovative practices, challenges and outcomes are part of a dynamic process where readiness is necessary but not sufficient for the success of the organizations. Furthermore, the interplay between innovation and the ability to navigate challenges ultimately determines the effectiveness of AI adoption and its impact on organizational performance.
