Generative AI, digital dexterity, and organizational future performance: The roles of decision-making and institutional governance for sustainable supply chains

Abstract

The growing complexity and uncertainty of sustainable supply chain environments demand advanced digital capabilities that sustain competitiveness through effective decision-making. This study investigates how Generative AI (GenAI)-enabled digital dexterity strengthens decision-making performance and, in turn, contributes to organizational future performance. Integrating dynamic capabilities theory with institutional theory, we develop and test a model in which decision-making quality and decision-making efficiency represent distinct dimensions of decision-making performance, while ethical identity and regulatory governance effectiveness shape the strength of relationships. Survey data were collected from 296 Chinese firms across multiple industries and analysed using partial least squares structural equation modeling. The results show that GenAI-enabled digital dexterity significantly enhances both decision-making quality and decision-making efficiency, and that both dimensions are positively associated with organizational future performance. Ethical identity further amplifies the positive effects of GenAI-enabled digital dexterity on decision-making outcomes, highlighting the importance of normative commitments for responsible and credible use of GenAI. Regulatory governance effectiveness exhibits asymmetric boundary effects, dampening the performance value of decision-making quality while strengthening the contribution of decision-making efficiency to future performance. This study advances research on digital transformation and sustainable operations by clarifying the distinctive role of GenAI-enabled digital dexterity, identifying decision-making performance as a central mechanism, and explaining how institutional governance conditions shape value realization. It also offers practical guidance on how firms can build and govern GenAI-enabled capabilities to support future-oriented performance in sustainability-focused supply chains.