Artificial Intelligence Capability and Organizational Performance: The Mediating Role of Innovation Capability Across Education and Corporate Sectors

Abstract

This study examined the relationship between artificial intelligence capability and organizational performance, with innovation capability as a mediating variable across the education and corporate sectors. Using a quantitative, non-experimental descriptive-correlational design, data were collected through an online survey from 400 respondents, consisting of 200 from the education sector and 200 from the corporate sector. The research instrument was subjected to expert validation and pilot testing prior to its actual administration. Data were analyzed using weighted mean, Pearson correlation, independent samples t-test, and mediation analysis. The findings revealed that artificial intelligence capability, innovation capability, and organizational performance were all rated high in both sectors, although the corporate sector consistently obtained higher mean scores than the education sector across all variables. Significant positive relationships were found between artificial intelligence capability and innovation capability (r = 0.67, p < .001), innovation capability and organizational performance (r = 0.70, p < .001), and artificial intelligence capability and organizational performance (r = 0.64, p < .001). Further analysis showed that innovation capability significantly mediated the relationship between artificial intelligence capability and organizational performance, indicating partial mediation. The study concludes that artificial intelligence capability is a significant organizational resource that enhances organizational performance both directly and indirectly through innovation capability, while sectoral context also influences the extent to which these capabilities are developed and translated into performance outcomes. The findings provide practical insights for organizations seeking to strengthen AI adoption, innovation practices, and performance improvement strategies.