Digital Transformation and Strategic Decision-Making: The Effects of Digitalization and AI Use

This thesis examines how digital transformation, led by artificial intelligence (AI), is reshaping strategic decision-making at the managerial level. It argues that AI is not merely a technological tool but a strategic enabler that strengthens organizational efficiency, agility, and innovation. Built on the Dynamic Capabilities Theory, the Technology–Organization–Environment (TOE) framework, and Customer Logic, the study investigates how AI supports sensing opportunities, seizing actions, and transforming structures for long-term competitiveness. A five-level model of digital maturity is proposed, illustrating how organizations evolve from basic data usage to AI-driven scenario simulation in decision-making. Using a quantitative approach that combines survey data and empirical findings from prior research, the study reveals that AI integration enhances managerial adaptability, operational effectiveness, and collaboration across departments. These benefits are most evident when AI is supported by strong digital capabilities and an open organizational culture. The thesis concludes that AI and Digitalization should be viewed as strategic partners that augment human intelligence, enabling data-informed, adaptive, and collaborative management practices essential for success in the digital era.