ARTIFICIAL INTELLIGENCE ADOPTION AND GREEN SUPPLY CHAIN MANAGEMENT IN SMES: THE ROLE OF ORGANIZATIONAL CAPABILITIES AND TOP MANAGEMENT SUPPORT

Abstract

Purpose: This research study aims at critically analyzing the factors that guide the implementation and adoption of Green Supply Chain Management (GSCM) among small and medium size enterprises (SMEs) in the Pakistani context. It seeks to shed light on the key functions of artificial intelligence (AI) adoption, internal organizational support and executive approval in promoting sustainable operations within supply chains. The research also hopes to provide practical information and empirically based findings to both managerial professionals and policy makers to enhance the development of environmentally friendly SMEs with the capacity to compete competitively.

Design: The empirical study was performed using Partial Least Squares-Structural Equation Modelling (PLS-SEM) with a carefully designed survey instrument, which guaranteed a solid collection of data and an accurate analysis.

Findings: The discussion demonstrated that AI adoption has a positive impact on GSCM in SMEs with most of its effects triggering the creation of internal green capabilities like innovation, operational practices, and organizational culture. These abilities came out as the key mediators highlighting that no one can achieve desirable sustainable supply-chain results without the use of technology. Executive endorsement (TMS) magnified the effects of the specific green capabilities, particularly the cultural evolution and innovation, on GSCM, and thus the necessity of leadership in guiding the sustainability efforts. Taken together, the findings indicate that successful GSCM is conditional on the interaction-based impacts of technological adoption, organizational ability building, and managerial commitment, and provides a strategic roadmap on how SMEs can operationalize sustainable practices effectively.

Theoretical Contribution: The study highlights the importance of introducing AI and developing internal green capabilities as the major sources of GSCM in SMEs. It shows that the synergies between technology, innovation, operations improvement, and cultural alignment strengthen sustainable supply-chain results. In addition, the effectiveness of these capabilities is further reinforced by executive leadership and hence explains why sustainability goals are critically dependent on management.

Practical Implications: The findings indicate to SME leaders that they need to invest in AI technologies and foster in-house green capabilities to promote sustainable performance in the supply chain. These capabilities are important to be converted into practice with the help of strong leadership support. Policymakers have been encouraged to support this change by providing training programs and financial incentives as well as strategic direction that would allow SME to adopt technological innovations with sustainable business paradigms.