THE IMPACT OF ARTIFICIAL INTELLIGENCE CAPABILITY ON ORGANISATIONAL PERFORMANCE IN MALAYSIAN HIGHER EDUCATION: THE MEDIATING ROLE OF EMPLOYEE PRODUCTIVITY
DOI:
https://doi.org/10.35631/IJMOE.831035Keywords:
Artificial Intelligence Capability, Employee Productivity, Higher Education, Malaysia, Organizational Performance, PLS-SEM, SDGAbstract
Artificial intelligence (AI) capability is increasingly important for institutional efficiency, employee work outcomes, and organisational performance. However, empirical evidence explaining how AI capability generates performance benefits through employee productivity remains limited in higher education, particularly in developing economies. This study examines the direct effects of AI capability on employee productivity and organisational performance and tests the mediating role of employee productivity in Malaysian higher education institutions. A quantitative cross-sectional survey was conducted among academic, administrative, and information technology staff in higher education institutions in Klang Valley, Malaysia. Of 198 questionnaires returned, 182 valid responses were analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM). The results indicate that AI capability significantly improves employee productivity (β = 0.78, p < 0.001) and organisational performance (β = 0.42, p < 0.001). Employee productivity also significantly enhances organisational performance (β = 0.39, p < 0.001) and partially mediates the relationship between AI capability and organisational performance (indirect effect β = 0.30, p < 0.001). The findings extend AI capability research to a knowledge-intensive educational context and show that institutional performance gains depend not only on technological resources but also on employees’ productive use of AI. The study offers practical guidance for higher education leaders on AI investment, workforce development, task alignment, and responsible implementation in support of institutional effectiveness and Sustainable Development Goal 8.
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