AI in strategy: A single case study into the potential role of AI in the strategy process in traditional, data rich industries in Finland

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Journal Title

Journal ISSN

Volume Title

School of Business | Master's thesis

Authors

Date

2022

Department

Johtamisen laitos

Major/Subject

Mcode

Degree programme

Management and International Business (MIB)

Language

en

Pages

114 + 13

Series

Abstract

The digitalization of society and the business world has accelerated the development and use of Artificial Intelligence (AI), among other emerging technologies. There is significant hype that has increased in recent years in the media, specifically around AI-based solutions. AI has even been stated to become the most disruptive technology in society within the next decade or so by several global institutes. In the business context, there are several applications of the technology available and under development, for example, in data analytics, robotics, and automation. Regardless of the attention AI has gained, the use of the technology in traditional companies seems to be at a fairly low level, as the so-called born-digital firms are leading the way and therefore, many leaders of legacy companies try to learn best practices from, for example, Silicon Valley start-ups. Research on the use of AI in organizational processes, such as strategy, has not been widely published yet, so a deeper understanding of the experiences of leaders on the implementation of AI is needed. The potential of the technology to optimize different organizational processes has been acknowledged in existing research, for example, in decision-making, logistics automation, and advanced data analytics as well as customer service, but especially for the strategy process and strategic sensemaking further research is needed Thus, the objective of this study is to understand how leaders experience the potential role of AI in the strategy process and how the technology can support the strategic sensemaking process in traditional firms, as these two processes are tightly interlinked. The empirical part of my research was conducted via a qualitative, single case study including five case companies that represent financial services, telecommunications, and retail industries. Firms from these industries were selected due to their rich use of data and predicted potential to invest in AI-based solution in short- and long-term. Due to the sensitivity of the topic from competition perspective, the names of the companies have not been published, but all firms are traditional, large organizations and the leading influencers of their industries in Finland. Data for the study were collected from both primary and secondary sources using semi-structured interviews and publicly available documentation. The key findings of the study reveal that the use of AI in traditional organizations is mostly limited to operational activities on corporate level, whereas in business units, some elements of the strategic level are reached. All the organizations aim at being data-driven in their strategy process and in strategic sensemaking, so the potential role of AI in the strategy process is seen as a supportive assistant in the future. That is, the control in the process would continue to be in human hands, even if the technology continues to develop toward becoming an autonomous operator. For this reason, the importance of collaboration between humans and AI is emphasized. In the strategic sensemaking process, AI is expected to support with increasing the transparency, uniformity, and efficiency of the process. For the traditional companies, the implementation of the technology remains to be a challenge though. Thus, as the potential of AI to optimize strategy and strategic sensemaking is seen high, this study also sheds light on the potential changes the traditional companies should make to facilitate a holistic implementation of AI into the organizations in the future.

Description

Thesis advisor

Schildt, Henri

Keywords

strategy, artificial intelligence, the role of AI in strategy, strategic sensemaking, AI in strategic sensemaking

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Citation

Permanent link to this item

https://urn.fi/URN:NBN:fi:aalto-202209115539

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[gradu] Kauppakorkeakoulu / BIZ