Generative Ai Adoption and Future Organizational Performance In Management Consulting Firms: The Dual Mediating Roles of Exploratory and Exploitative Innovation, and the Moderating Effects of Organizational Agility and Ethical Dilemmas — Evidence from Ethiopia
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Date
2026-05-01
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Addis Ababa University
Abstract
The rapid advancement of Generative AI and its integrations within organizational operations have transformed how businesses operate and compete in dynamic markets. Despite this, empirical evidence on its effect on organizational performance remains limited. This study aimed to assess the effect of GenAI adoption (GA) on future organizational performance (OP) in the context of management consulting firms, while examining the mediating role of exploitative innovation (EXPLT) and exploratory innovation (EXPLR), as well as the moderating role of organizational agility (AGI) and ethical dilemmas (ETH). A quantitative approach was employed targeting 242 respondents from management consulting firms in Ethiopia, of which 219 responded (90.5% response rate). Data was collected using pre-tested questionnaires and analyzed using Smart PLS version 4.1.1.8. The measurement model of the study was validated using standard validity and reliability tests, while bootstrapping was used to test the significance of the structural model. The findings reveal that GenAI adoption has a positive significant effect on exploratory innovation, exploitative innovation and future organizational performance. The study also found that both exploratory and exploitative innovations each act as complementary partial mediators of the positive relationship between GenAI adoption and future organizational performance. In addition, organizational agility has been found to have a strengthening moderating effect on the relationship between GenAI adoption and exploratory innovation, exploitative innovation and future organizational performance, whereas the moderating effect of ethical dilemmas was found to be insignificant suggesting that ethical dilemmas neither amplify nor weaken the relationship in this context. These findings imply that adoption of GenAI contributes to improved future organizational performance both directly and indirectly through exploitative and exploratory innovation. This can further be strengthened when organizations have higher level of agility.
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Generative AI adoption, future organizational performance, exploitative innovation, exploratory innovation, organizational agility, ethical dilemmas