The Impact of Applying Artificial Intelligence and Digital Competencies on Organizational Excellence: The Mediating Role of Employee Competencies

Document Type : Original Article

Authors

1 Assistant professor, Department of Public Management, Faculty of Management, Payame Noor University, Tehran, Iran

2 M.A. in Public Management, Department of Public Management, Faculty of Management, Payame Noor University, Tehran, Iran.

3 M.A. in Public Management, Department of Public Management, Faculty of Management, Payame Noor University, Tehran, Iran

10.22091/jrim.2025.13940.1388

Abstract

The present study investigates the impact of applying artificial intelligence and digital competencies on organizational excellence, emphasizing the mediating role of employee competencies within the Yazd governor's office. This research was applied in purpose and descriptive–correlational in nature and methodology. The statistical population comprised all permanent employees of the Yazd goverenor's office (N=270), from which 159 individuals were selected using a simple random sampling method. Standardized questionnaires were employed for data collection, and the hypotheses were tested using structural equation modeling. The findings showed that applying artificial intelligence (β = 0.262) and digital competencies (β = 0.233) have a direct and significant impact on organizational excellence. Also, employee competencies as a mediating variable strengthened this relationship (β = 0.098 and β = 0.140). The results of this study indicate that investing in the development of artificial intelligence and digital competencies of employees can be considered as a key strategy for achieving organizational excellence in government institutions, and in this regard, employee competencies also act as a mediating variable. By providing a practical framework, this study provides the ground for policymakers to digital transformation and improve organizational performance.

Keywords


Alpaydin, E. (2020). Introduction to machine learning. MIT press.
Astapciks, I. (2023). Why do companies need digital transformation. Forbes, dostupno na: https://www.forbes. com/councils/forbestechcouncil/2023/03/20/why-docompanies-need-digital-transformation.
Baki, N. U., Rasdi, R. M., Krauss, S. E., & Omar, M. K. (2023). Employee Competencies in the Age of Artificial Intelligence: A Systematic Review from Southeast Asia. International Journal of Academic Reserach in Economics and Management Sciences, 12(1), 34-53. http://dx.doi.org/10.6007/IJAREMS/v12-i1/15891
Benbya, H., Davenport, T. H., & Pachidi, S. (2020). Artificial intelligence in organizations: Current state and future opportunities. MIS Quarterly Executive, 19(4), 2-24. http://dx.doi.org/10.2139/ssrn.3741983
Brynjolfsson, E., & Mcafee, A. N. D. R. E. W. (2017). Artificial intelligence, for real. Harvard business review, 1(1), 1-31.
Chen, Y., & Wei, L. (2025). Effects of artificial intelligence learning environments on engineers’ intercultural communication competence: mediating role of learning adaptability. Interactive Learning Environments, 33(2), 1404-1421. https://doi.org/10.1080/10494820.2024.2371937
Chowdhury, R. H. (2025). Digital leadership and organizational learning: Technologies for business transformation and operational excellence. Deep Science Publishing.
Daradkah, A., Awais, B., Telfah, E., AlKhatib, F., Al-Kilani, J., Alqudah, R., ... & Al, S. (2024). Applying Artificial Intelligence (AI) and Digital Competencies to Drive Organizational Excellence. Applied Mathematics & Information Sciences, 18(6), 1303-1316. doi:10.18576/amis/180612
Davari, A., & Rezazadeh, A. (2014). Structural equation modeling with PLS software. Academic Jahad Publishing Organization. )in Persian(
Davenport, T. H., & Ronanki, R. (2018). Artificial intelligence for the real world. Harvard business review, 96(1), 108-116.
Dehghanizadeh, M. & Jafarzadeh, M. (2025). Designing a model of the Flourishing at Work a Strategy for Employee Development. Management and Educational Perspective, 7(1), 66-87. https://doi.org/10.22034/jmep.2024.411376.1230 . (in Persian)
Fazlian, S. S., & Sajjadikhah, Gh. (2024). Identifying the components of employee competence in the present and the past 20 years. Journal of New Research Approaches in Management and Accounting, 8(28), 1192-1203. (in Persian)
Fountaine, T., McCarthy, B., & Saleh, T. (2019). Building the AI-powered organization. Harvard business review, 97(4), 62-73.
Ghafoor, S., Mann, R. S., & Grigg, N. (2021). The strengths and opportunities for improvement of the Baldrige Performance Excellence Program. Quality Management Journal, 28(3), 128-144. https://doi.org/10.1080/10686967.2021.1920867
Hemalatha, A., & Kumari, D. P. B. (2020). A Study on Impact of Artificial Intelligence on Organisational Effectiveness. Available at SSRN 3897494. https://dx.doi.org/10.2139/ssrn.3897494
Huu, P. T. (2023). Impact of employee digital competence on the relationship between digital autonomy and innovative work behavior: a systematic review. Artificial Intelligence Review, 56(12), 14193-14222. https://doi.org/10.1007/s10462-023-10492-6
Ibrahim, G. E. E. D. (2023). The impact of digital transformation in the Egyptian private universities on achieving organizational excellence, using the German university in Cairo as a model. International Journal of Business and Management, 18(5), 1-47. https://doi.org/10.5539/ijbm.v18n5p47
Ilomäki, L., Kantosalo, A., & Lakkala, M. (2011). What is digital competence. Linked portal, 1-12.
Irfan, M., Salameh, A. A., Saleem, H., Tahir Naveed, R., Dalain, A. F., & Shahid, R. M. (2022). Impact of servant leadership on organization excellence through employees’ competence: Exploring a cross-cultural perspective. Frontiers in Environmental Science, 10, 985436. https://doi.org/10.3389/fenvs.2022.985436
Khalil, S. I., Farhan, O. M., & Hamad, H. A. (2022). The role of digital leadership in achieving organizational excellence an applied study at the university of tikrit. World Economics and Finance Bulletin, 12, 85-94.
Khawaja, E. A., & Ehsan, H. (2023). Work in Progress: A Survey of Artificial Intelligence Educational Resources for Pre-College Education Paper presented at 2023 ASEE Annual Conference & Exposition, Baltimore , Maryland. https://doi.org/10.18260/1-2--44153
Korayim, D., Bodhi, R., Badghish, S., Yaqub, M. Z., & Bianco, R. (2025). Do generative artificial intelligence related competencies, attitudes and experiences affect employee outcomes? An intellectual capital perspective. Journal of Intellectual Capital, 26(3), 596-615. https://doi.org/10.1108/JIC-09-2024-0295
Lee, J., & Samanta, A. (2024). Redefining careers in the age of artificial intelligence. Issues in Information Systems, 25(3), 428-438. https://doi.org/10.48009/3_iis_2024_132
Liang, C. J., Lin, Y. L., & Huang, H. F. (2013). Effect of core competence on organizational performance in an airport shopping center. Journal of Air Transport Management, 31, 23-26. https://doi.org/10.1016/j.jairtraman.2012.11.005
Masrek, M. N., Susantari, T., Mutia, F., Yuwinanto, H. P., & Atmi, R. T. (2024). Enabling Education Everywhere: How artificial intelligence empowers ubiquitous and lifelong learning. Environment-Behaviour Proceedings Journal, 9(SI18), 57-63. https://doi.org/10.21834/e-bpj.v9iSI18.5462
Mazurchenko, A., & Zelenka, M. (2022). Employees' digital competency development in the construction and automotive industrial sectors. Central European Business Review, 11(1), 41-64. https://doi.org/10.18267/j.cebr.284
Morandini, S., Fraboni, F., De Angelis, M., Puzzo, G., Giusino, D., & Pietrantoni, L. (2023). The impact of artificial intelligence on workers’ skills: Upskilling and reskilling in organisations. Informing Science, 26, 39-68. https://dx.doi.org/10.28945/5078
Nouri, M., Adib Manesh, M., Moradi, A., & Sayadi, Y. (2024). The lived experience managers on organizational excellence. Journal of Strategic Management Studies, 15(58), 85-103. 10.22034/smsj.2023.381581.1774 [In Persian]
Pagani, M. (2013). Digital Business Strategy and Value Creation: Framing the Dynamic Cycle of Control Points. MIS Quarterly, 37(2), 617–632. http://www.jstor.org/stable/43825925
Praj, F., Horváthová, M., & Čambál, M. (2022, October). Employee competencies in line with Industry 4.0. In IOP Conference Series: Materials Science and Engineering (Vol. 1256, No. 1, p. 012033). IOP Publishing. doi:10.1088/1757-899X/1256/1/012033
Rahmati, M. H., & Jalilvand, M. R. (2024). An optimal organizational excellence model for the public sector. International Journal of Quality & Reliability Management, 41(3), 944-963. https://doi.org/10.1108/IJQRM-03-2023-0098
Rizza, C. (2014). Digital competences. In Encyclopedia of quality of life and well-being research (pp. 1614-1619). Springer, Dordrecht.

Salehi, Sh., Dehghani, M., Azimi Yancheshmeh, E., Javadipour, M., Salehi, K., & narenji thani, F. (2024). Identifying the Dimensions and Components of Teachers' Digital Competence: A Systematic Review. Journal of Curriculum Studie, 19(72), 121-146. 10.22034/jcs.2024.188644 (in Persian)

Schoemaker, P. J., Heaton, S., & Teece, D. (2018). Innovation, dynamic capabilities, and leadership. California management review, 61(1), 15-42. https://doi.org/10.1177/0008125618790246
Sharawy, F. S. (2023). The use of artificial intelligence in higher education: A study on faculty perspectives in universities in Egypt [Master's thesis, The American University in Cairo (Egypt)].
Verma, M. K. (2018). Artificial intelligence and its scope in different areas with special reference to the field of education. International Journal of Advanced Educational Research, 3(1), 5-10.