ARTIFICIAL INTELLIGENCE IN STRATEGIC DECISION-MAKING: OPPORTUNITIES, CHALLENGES, AND IMPLICATIONS FOR ORGANIZATIONAL PERFORMANCE

Abstract

Artificial intelligence (AI) is increasingly influencing the ways organizations analyze information, develop strategies, manage resources, and evaluate business performance. Businesses operate in competitive environments characterized by changing customer expectations, technological developments, economic uncertainty, and increasing demands for operational efficiency. Traditional decision-making methods may not always be sufficient to respond to these challenges, particularly when managers must evaluate large amounts of information within limited timeframes. AI-based tools, including predictive analytics, machine learning, natural language processing, and intelligent automation, can support managers by identifying patterns, forecasting potential outcomes, and generating insights for strategic planning. However, the adoption of AI also introduces challenges related to data quality, algorithmic bias, privacy, transparency, employee skills, and organizational accountability. This paper examines the role of AI in strategic decision-making and explores its potential implications for organizational performance. A qualitative narrative literature review approach is adopted to examine existing academic research and established guidance on AI governance. The discussion indicates that AI can contribute to improved information processing, resource allocation, customer understanding, and operational planning when it is appropriately integrated into organizational processes. Nevertheless, technology alone does not guarantee better decisions or superior business outcomes. Successful implementation requires reliable data, capable employees, effective leadership, human oversight, and responsible governance. The paper concludes that organizations should treat AI as a strategic decision-support capability rather than a complete substitute for managerial judgment.