IDEAS home Printed from https://ideas.repec.org/a/eee/bushor/v68y2025i5p559-573.html

How organizations can innovate with generative AI

Author

Listed:
  • Holmström, Jonny
  • Carroll, Noel

Abstract

Artificial intelligence (AI) is driving significant impact on businesses across many sectors. Specifically, generative AI (GenAI) is fueling new capabilities that have triggered a wave of innovation. For example, there has been massive hype surrounding the launch of ChatGPT, with growing speculation regarding its disruptive nature for organizations and society. The ongoing debate conveys a clear belief that ChatGPT will lead to far-reaching innovation. However, it is less clear whether such innovation can be managed. We seek to close this gap by identifying distinctive innovation strategies in terms of two key dimensions: automation and augmentation (high or low). We present a new typology of four generic innovation strategies: Traditional Tool (low automation, low augmentation), Basic Automation (high automation, low augmentation), Automated Assistance (low automation, high augmentation), and Assisted Augmentation (high automation, high augmentation). These strategies differ in relation to how we view automation and augmentation for innovation, and also the risks and challenges faced throughout the process and tactics for managing the process. The typology of four generic innovation strategies pinpoints how the four strategies essentially differ not only in relation to automation and augmentation for innovation but also in terms of risks and challenges faced in the process, as well as available tactics for managing the process. Building upon this framework, our insights suggest that practitioners can harness ChatGPT effectively by aligning their innovation objectives with the appropriate strategy, whether it be enhancing creative processes or streamlining operational efficiency, thereby navigating the complexities of innovation with a more structured and strategic approach.

Suggested Citation

  • Holmström, Jonny & Carroll, Noel, 2025. "How organizations can innovate with generative AI," Business Horizons, Elsevier, vol. 68(5), pages 559-573.
    • Handle: RePEc:eee:bushor:v:68:y:2025:i:5:p:559-573
    DOI: 10.1016/j.bushor.2024.02.010
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0007681324000247
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.bushor.2024.02.010?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Sundberg, Leif & Holmström, Jonny, 2023. "Democratizing artificial intelligence: How no-code AI can leverage machine learning operations," Business Horizons, Elsevier, vol. 66(6), pages 777-788.
    2. Mostafa Mesgari & Chitu Okoli, 2019. "Critical review of organisation-technology sensemaking: towards technology materiality, discovery, and action," European Journal of Information Systems, Taylor & Francis Journals, vol. 28(2), pages 205-232, March.
    3. Raquel Benbunan-Fich & Kevin C. Desouza & Kim Normann Andersen, 2020. "IT-enabled innovation in the public sector: introduction to the special issue," European Journal of Information Systems, Taylor & Francis Journals, vol. 29(4), pages 323-328, July.
    4. Polyxeni Vassilakopoulou & Arve Haug & Leif Martin Salvesen & Ilias O. Pappas, 2023. "Developing human/AI interactions for chat-based customer services: lessons learned from the Norwegian government," European Journal of Information Systems, Taylor & Francis Journals, vol. 32(1), pages 10-22, January.
    5. Lynn Wu & Lorin Hitt & Bowen Lou, 2020. "Data Analytics, Innovation, and Firm Productivity," Management Science, INFORMS, vol. 66(5), pages 2017-2039, May.
    6. Grewal, Dhruv & Guha, Abhijit & Satornino, Cinthia B. & Schweiger, Elisa B., 2021. "Artificial intelligence: The light and the darkness," Journal of Business Research, Elsevier, vol. 136(C), pages 229-236.
    7. Ida Merete Enholm & Emmanouil Papagiannidis & Patrick Mikalef & John Krogstie, 2022. "Artificial Intelligence and Business Value: a Literature Review," Information Systems Frontiers, Springer, vol. 24(5), pages 1709-1734, October.
    8. Noel Carroll & Nik Rushdi Hassan & Iris Junglas & Thomas Hess & Lorraine Morgan, 2023. "Transform or be transformed: the importance of research on managing and sustaining digital transformations," European Journal of Information Systems, Taylor & Francis Journals, vol. 32(3), pages 347-353, May.
    9. Short, Cole E. & Short, Jeremy C., 2023. "The artificially intelligent entrepreneur: ChatGPT, prompt engineering, and entrepreneurial rhetoric creation," Journal of Business Venturing Insights, Elsevier, vol. 19(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Robertson, Jeandri & Ferreira, Caitlin & Botha, Elsamari & Oosthuizen, Kim, 2024. "Game changers: A generative AI prompt protocol to enhance human-AI knowledge co-construction," Business Horizons, Elsevier, vol. 67(5), pages 499-510.
    2. Valtonen, Alena & Saunila, Minna & Ukko, Juhani & Treves, Luke & Ritala, Paavo, 2025. "AI and employee wellbeing in the workplace: An empirical study," Journal of Business Research, Elsevier, vol. 199(C).
    3. Sundberg, Leif & Holmström, Jonny, 2024. "Innovating by prompting: How to facilitate innovation in the age of generative AI," Business Horizons, Elsevier, vol. 67(5), pages 561-570.
    4. Robert Strelau, 2024. "Exploring Employees’ Accountability in Knowledge Management Systems Enhanced by Generative Artificial Intelligence," Nowoczesne Systemy Zarządzania. Modern Management Systems, Military University of Technology, Faculty of Security, Logistics and Management, Institute of Organization and Management, issue 4, pages 79-94.
    5. Anna Kusetogullari & Huseyin Kusetogullari & Martin Andersson & Tony Gorschek, 2025. "GenAI in Entrepreneurship: a systematic review of generative artificial intelligence in entrepreneurship research: current issues and future directions," Papers 2505.05523, arXiv.org.
    6. De Keyser, Arne & Antonetti, Paolo & Rouziou, Maria & Béal, Mathieu & Wang, Zih-Hsiang & Grégoire, Yany & Lussier, Bruno, 2025. "Understanding the B2B customer experience and journey: A convergence-based lens," Journal of Business Research, Elsevier, vol. 198(C).
    7. Li, Yanqiong & Zhang, Linlang, 2025. "Intelligent manufacturing and the pay gap within firms," International Review of Financial Analysis, Elsevier, vol. 106(C).
    8. Qian, Lixian & Yin, Juelin & Huang, Youlin & Liang, Ya, 2023. "The role of values and ethics in influencing consumers’ intention to use autonomous vehicle hailing services," Technological Forecasting and Social Change, Elsevier, vol. 188(C).
    9. Roberto Moro-Visconti & Salvador Cruz Rambaud & Joaquín López Pascual, 2023. "Artificial intelligence-driven scalability and its impact on the sustainability and valuation of traditional firms," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 10(1), pages 1-14, December.
    10. Maximilian Klöckner & Christoph G. Schmidt & Stephan M. Wagner, 2022. "When Blockchain Creates Shareholder Value: Empirical Evidence from International Firm Announcements," Production and Operations Management, Production and Operations Management Society, vol. 31(1), pages 46-64, January.
    11. Yang, Tongshu & Zhou, Nina, 2025. "Artificial intelligence and the quality of corporate accounting information disclosure," Finance Research Letters, Elsevier, vol. 85(PD).
    12. Li, Sen & Chen, Yan, 2024. "Governing decentralized autonomous organizations as digital commons," Journal of Business Venturing Insights, Elsevier, vol. 21(C).
    13. Jorge Andrés-Sánchez & Jaume Gené-Albesa, 2024. "Not with the bot! The relevance of trust to explain the acceptance of chatbots by insurance customers," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 11(1), pages 1-12, December.
    14. Chmielarz Witold & Sołtysik-Piorunkiewicz Anna, 2024. "Changes in IT Project Management Awareness According to Business Process Management Experts’ Opinion: Comparative Study 2017-2023," Economics and Culture, Sciendo, vol. 21(2), pages 44-58.
    15. Li, Lei & Lin, Jiabao & Ouyang, Ye & Luo, Xin (Robert), 2022. "Evaluating the impact of big data analytics usage on the decision-making quality of organizations," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    16. Abdelhamid Zaidi & Samuel-Soma M. Ajibade & Majd Musa & Festus Victor Bekun, 2023. "New Insights into the Research Landscape on the Application of Artificial Intelligence in Sustainable Smart Cities: A Bibliometric Mapping and Network Analysis Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 13(4), pages 287-299, July.
    17. Ballantine, Joan & Boyce, Gordon & Stoner, Greg, 2024. "A critical review of AI in accounting education: Threat and opportunity," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 99(C).
    18. Burdin, Gabriel & Dughera, Stefano & Landini, Fabio & Belloc, Filippo, 2023. "Contested Transparency: Digital Monitoring Technologies and Worker Voice," GLO Discussion Paper Series 1340, Global Labor Organization (GLO).
    19. Muhammad Farrukh Moin & Abhishek Behl & Justin Zuopeng Zhang & Amit Shankar, 2025. "AI in the Organizational Nexus: Building Trust, Cementing Commitment, and Evolving Psychological Contracts," Information Systems Frontiers, Springer, vol. 27(4), pages 1413-1424, August.
    20. Alessandra Colombelli & Elettra D’Amico & Emilio Paolucci, 2023. "When computer science is not enough: universities knowledge specializations behind artificial intelligence startups in Italy," The Journal of Technology Transfer, Springer, vol. 48(5), pages 1599-1627, October.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:bushor:v:68:y:2025:i:5:p:559-573. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/bushor .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.