Abstract
Artificial Intelligence (AI) is transforming organizations’ business models, structure, and decision-making processes. Leaders face enormous ethical challenges in balancing the competing interests of various stakeholders while adopting AI in the organization. To address those challenges, leaders must focus on developing collaborative human-machine capabilities. Such collaborative capabilities will create more responsible and sustainable organizational outcomes in the increasingly complex AI environment. Using Dynamic Managerial Capability (DMC) as our theoretical framework, we conducted 20 semi-structured interviews to explore the dimensions of leaders’ capabilities in AI environments. We aim to identify the leaders’ essential AI-driven capabilities and offer an integrated capability framework to manage increasingly AI-driven organizations successfully. Our research findings show how leaders could use AI-driven capabilities to learn, improve, and adapt to the opportunities in an AI environment. Highlighting the recent leadership trends related to AI, we offer future research avenues to uncover opportunities for leaders in AI-driven organizations.