How Organizations Legitimize AI Led Organizational Change?

AI is recognized to be a key technology for digital transformation (DT) and the value of AI is considered to determine the future of the company. However, in reality, although managers acknowledge the future value of AI and have plans to introduce it, most are not sure what to expect from AI or how to apply it to their business. This study compares two company cases to demonstrate how an organization has successfully achieved AI led organizational change while another failed. Specifically, by taking institutionalist’s view, this study examines how the legitimacy enables and constrains AI led organizational changes in organization’s practices, processes, and infrastructure. The results of this study indicate that for the success of AI led organizational changes, the legitimacy plays an important role by reducing the challenges from stakeholders and increasing the institutional momentum to move through the phases of the change.