Artificial Intelligence in International Business: IB Theory Under Augmented Decision-Making

This paper discusses the impact of artificial intelligence (AI) on decision-making in multinational enterprises (MNEs) and its theoretical implications for international business (IB) research. Building on the concept of bounded rationality, we analyze how AI affects biases and heuristics that drive human decision-making and identify new, AI-specific biases that could distort decision-making outcomes in MNEs. We propose that AI-augmented decision-making will alter the behavioral assumptions underlying established IB theories, requiring a reevaluation of these theories’ boundary conditions. By addressing these shifts, the paper contributes to updating IB research to the realities of AI-augmented decision landscapes.