A Conceptual Study on the Effects of Artificial Intelligence in Managerial Decision-Making

Abstract

This study examines the transformative role of artificial intelligence (AI) in managerial decision-making, addressing a critical gap in the literature: the under-explored intersection of AI technologies and managerial cognition. While existing research emphasizes technical and operational aspects of AI, this paper synthesizes classical decision-making theories—bounded rationality, Mintzberg’s managerial roles, and socio-technical systems theory—to analyze how AI reshapes human judgment, strategic foresight, and leadership dynamics. Through sector-specific applications and empirical insights, we demonstrate AI’s dual capacity as a cognitive partner (enhancing decision accuracy and efficiency) and a disruptor (introducing ethical dilemmas and skill demands). The study introduces the concept of “augmented leadership,” proposing that managers must evolve into hybrid professionals who integrate AI-driven insights with emotional intelligence and ethical reasoning. Key contributions include a framework for human-AI collaboration, sector-aware strategies for AI adoption, and actionable recommendations for mitigating algorithmic bias and fostering transparency. By bridging theoretical rigor with practical relevance, this research offers critical insights for academics exploring AI’s cognitive implications, practitioners navigating digital transformation, and policymakers designing governance frameworks for the AI-augmented workplace.