The Impact of Artificial Intelligence on Strategic Decision-Making: A Case Study of Small and Medium-Sized Enterprises (SMEs)

Abstract

Artificial Intelligence (AI) has become one of the most impactful technologies shaping business operations and strategy in various sectors. Large corporations have integrated AI into their decision-making processes quickly, whereas small and medium-sized enterprises (SMEs) are seeing how AI can boost organizational performance, maximize resource utilization, and increase competitiveness. However, and despite the increasing interest, there is little understanding of the perception and use of AI by SME managers in their strategic business decisions. The study examines the role of AI in strategic decision making of SMEs using a qualitative case study methodology. The study involved 12 SME owners and high-level managers who had implemented AI tools in their companies, utilizing semi-structured interviews. Collected data was analyzed by thematic analysis, to find the commonalities and patterns around AI adoption, decision quality, organizational efficiency, and challenges in implementation. These results suggest that AI plays a crucial role in enhancing the speed and precision of strategic decisions, offering real-time data analysis, market insights, and predictive features. Participants also said they felt they better understood their customers, their operations were more efficient and they had greater confidence in long-term planning. But there are significant challenges to successful adoption, including implementation expense, employee skill level, data privacy, and overreliance on automated recommendations. The study concludes that AI is not a solution that will replace human judgment but rather a tool that can be used to inform decision-making. The results are part of a larger body of research on the implementation of AI in SMEs and offer practical insights and recommendations for business owners, policymakers, and technology providers aiming to speed up the digital transformation of smaller businesses.