Understanding the Impact of Artificial Intelligence on managing SME Businesses (Dissertation Sample)

Understanding the Impact of Artificial Intelligence on managing SME Businesses In partial fulfilment of the requirements for the degree of MA Business and Management ABSTRACT This dissertation examines the influence of Artificial Intelligence (AI) on the management of Small and Medium-sized Enterprises (SMEs) and evaluates whether the benefits of AI are equitably distributed between technical and non-technical SMEs. Amidst the rapid advancement of AI technologies, SMEs stand at a critical juncture where the adoption of such technologies could significantly alter their competitive landscape. This research aims to dissect the historical and contemporary applications of AI within SMEs, identify the disparities in adoption rates, and understand the challenges and potential risks involved. Through a methodical approach that included a comprehensive survey of individuals working in SMEs, this study collected and analysed empirical data to assess the current state of AI adoption. The research revealed that while AI implementation has led to improvements in operational efficiency and decision-making across SMEs, technical SMEs are more adept at integrating AI into a wider range of business functions compared to their non-technical counterparts. Challenges such as resistance to change, lack of knowledge, and unclear ROI were identified as significant barriers to AI adoption across all SMEs. However, these challenges were more pronounced in non-technical SMEs. Despite these obstacles, the potential of AI to provide a competitive edge and enhance customer service was recognised across sectors. The dissertation concludes that AI has a positive impact on the management of SMEs but notes that the depth of its integration and the extent of its benefits are influenced by the technical orientation of the business. The findings suggest that while the potential of AI is vast, the realization of its full benefits within SMEs requires overcoming cultural, operational, and financial barriers. This study contributes to the academic discourse on AI in business management and offers practical insights for SMEs contemplating the integration of AI into their operations. Future research directions are proposed to further understand the evolving role of AI in SMEs and to support businesses in navigating the challenges associated with its adoption. Top of Form Contents TOC \o "1-3" \h \z \u Chapter 1: Introduction PAGEREF _Toc157180241 \h 101.1 Background PAGEREF _Toc157180242 \h 101.2 Research Significance PAGEREF _Toc157180243 \h 111.3 Research Aim PAGEREF _Toc157180244 \h 121.4 Research Objectives PAGEREF _Toc157180245 \h 121.5 Research Question PAGEREF _Toc157180246 \h 121.6 Overview of the Dissertation PAGEREF _Toc157180247 \h 12Chapter 1: Introduction PAGEREF _Toc157180248 \h 13Chapter 2: Literature Review PAGEREF _Toc157180249 \h 13Chapter 3: Research Methodology PAGEREF _Toc157180250 \h 13Chapter 4: Findings and Analysis PAGEREF _Toc157180251 \h 14Chapter 5: Discussion PAGEREF _Toc157180252 \h 14Chapter 6: Conclusion PAGEREF _Toc157180253 \h 14Chapter 2: Literature Review PAGEREF _Toc157180254 \h 152.1.1 Early Developments and Applications PAGEREF _Toc157180255 \h 152.1.1.1 Inception of AI in Business PAGEREF _Toc157180256 \h 152.1.1.2 Evolution of AI Technologies PAGEREF _Toc157180257 \h 162.1.1.3 Adoption Challenges in Early Stages PAGEREF _Toc157180258 \h 172.1.1.4 Integration and Operational Challenges PAGEREF _Toc157180259 \h 182.1.1.5 Rise of Commercial AI Solutions PAGEREF _Toc157180260 \h 202.1.1.6 Expanding Applications and Accessibility PAGEREF _Toc157180261 \h 212.1.2 The Role of Cloud Computing in Democratizing AI PAGEREF _Toc157180262 \h 222.1.2.1 Impact on Business Models and Strategies PAGEREF _Toc157180263 \h 232.1.2.2 Challenges and Considerations PAGEREF _Toc157180264 \h 232.1.3 AI's Role in Strategic Decision-Making PAGEREF _Toc157180265 \h 232.1.4 Transition to SMEs PAGEREF _Toc157180266 \h 252.1.5 AI in Modern SMEs PAGEREF _Toc157180267 \h 262.1.5.1 AI in Tech-Based SMEs PAGEREF _Toc157180268 \h 262.1.5.2 AI in Non-Tech SMEs PAGEREF _Toc157180269 \h 272.1.6 Best Practices For Successful AI Implementation In SMES PAGEREF _Toc157180270 \h 27Chapter 3: Research Methodology PAGEREF _Toc157180271 \h 303.1 Research Philosophy PAGEREF _Toc157180272 \h 303.2 Research Approach PAGEREF _Toc157180273 \h 303.3 Research Strategy PAGEREF _Toc157180274 \h 313.4 Research Design and Method PAGEREF _Toc157180275 \h 323.6 Method of Data Analysis PAGEREF _Toc157180276 \h 333.7 Ethical Considerations PAGEREF _Toc157180277 \h 34Chapter 4: Findings and Analysis PAGEREF _Toc157180278 \h 354.1. Questionnaire Analysis PAGEREF _Toc157180279 \h 354.1.1 Demographic Information PAGEREF _Toc157180280 \h 354.1.1.1. Role within the SME: PAGEREF _Toc157180281 \h 354.1.1.2. Industry Sector of the SME: PAGEREF _Toc157180282 \h 374.1.1.3. Number of Employees in the SME: PAGEREF _Toc157180283 \h 384.1.2 Artificial Intelligence Adoption PAGEREF _Toc157180284 \h 394.1.2.1. Adoption of AI: PAGEREF _Toc157180285 \h 404.1.2.2. Areas of AI Utilization: PAGEREF _Toc157180286 \h 414.1.2.3. Extent of AI implementation PAGEREF _Toc157180287 \h 424.1.2.4. Primary Motivation behind SME to Adopt AI Technology PAGEREF _Toc157180288 \h 444.1.2.5. Level of AI Literacy of the Firms Employees PAGEREF _Toc157180289 \h 454.1.3. Impact of AI on SME Operations PAGEREF _Toc157180290 \h 474.1.3.1. Benefits Experienced by the Firm Through AI PAGEREF _Toc157180291 \h 474.1.3.2. Challenges Encountered due to AI implementation PAGEREF _Toc157180292 \h 484.1.3.3. The Role of AI in SMEs in the next 5 years PAGEREF _Toc157180293 \h 494.1.3.4. Impact of AI Adoption on the Workforce Size PAGEREF _Toc157180294 \h 504.1.3.5. Most Significant Barrier to Further AI Adoption In SMEs PAGEREF _Toc157180295 \h 524.1.3.6. Likelihood of SME to Invest More in AI technologies in the next 12 Months PAGEREF _Toc157180296 \h 534.2. Trends Analysis PAGEREF _Toc157180297 \h 554.2.1 Primary Motivators behind Implementing AI within an Industry PAGEREF _Toc157180298 \h 554.2.2. Level of Literacy in different Sectors PAGEREF _Toc157180299 \h 594.2.3. Benefits of AI Realised by Technical and Non-Technical Firms PAGEREF _Toc157180300 \h 614.2.4. Challenges and Barriers faced by Technical vs Non-Technical Firms PAGEREF _Toc157180301 \h 65Chapter 5: Conclusion PAGEREF _Toc157180302 \h 69References PAGEREF _Toc157180303 \h 71Appendix PAGEREF _Toc157180304 \h 74Questionnaire PAGEREF _Toc157180305 \h 74Questionnaire 1 PAGEREF _Toc157180306 \h 80Questionnaire 2 PAGEREF _Toc157180307 \h 86Questionnaire 3 PAGEREF _Toc157180308 \h 92Questionnaire 4 PAGEREF _Toc157180309 \h 98Questionnaire 5 PAGEREF _Toc157180310 \h 104Questionnaire 6 PAGEREF _Toc157180311 \h 110Questionnaire 7 PAGEREF _Toc157180312 \h 116Questionnaire 8 PAGEREF _Toc157180313 \h 122Questionnaire 9 PAGEREF _Toc157180314 \h 128Questionnaire 10 PAGEREF _Toc157180315 \h 134Questionnaire Survey Raw Data PAGEREF _Toc157180316 \h 140 TABLE OF FIGURES TOC \h \z \c "Figure" Figure 01: Role within the SME PAGEREF _Toc157177472 \h 27 Figure 02:Sector in which SME operate PAGEREF _Toc157177473 \h 28 Figure 03: Number of Employees in the SME: PAGEREF _Toc157177474 \h 30 Figure 04: Adoption of AI by firms PAGEREF _Toc157177475 \h 31 Figure 05: Areas of AI Utilization PAGEREF _Toc157177476 \h 32 Figure 06: Extent of AI implementation PAGEREF _Toc157177477 \h 33 Figure 07: Primary Motivation behind SME to Adopt AI Technology PAGEREF _Toc157177478 \h 34 Figure 08: level of literacy among employees about AI technology and its application PAGEREF _Toc157177479 \h 35 Figure 09: benefits experienced by their firm through the use of AI PAGEREF _Toc157177480 \h 36 Figure 010: Challenges Encountered due to AI implementation in their firms PAGEREF _Toc157177481 \h 37 Figure 011: The utilization of AI in their firms in the next 5 years PAGEREF _Toc157177482 \h 38 Figure 012: Impact of AI Adoption on the Size of Workforce in their firms PAGEREF _Toc157177483 \h 39 Figure 013: most significant barrier to further AI adoption in SMEs PAGEREF _Toc157177484 \h 40 Figure 014: most significant barrier to further AI adoption in SMEs PAGEREF _Toc157177485 \h 41 Figure 015: Primary motivations behind implementation of AI in different types of firms PAGEREF _Toc157177486 \h 42 Figure 016: Benefits realized by the firm through AI as compared to obstacles PAGEREF _Toc157177487 \h 44 Figure 017: level of literacy of stakeholders with the use of AI PAGEREF _Toc157177488 \h 45 Figure 018: Level of AI literacy in Technical vs Non-Technical firms PAGEREF _Toc157177489 \h 46 Figure 019: Benefits realized by different departments of the firms PAGEREF _Toc157177490 \h 48 Figure 020: Benefits gained by technical vs non-technical firms PAGEREF _Toc157177491 \h 49 Figure 021: Challenges faced in AI Implementation by technical vs non-technical firms PAGEREF _Toc157177492 \h 50 Figure 022: Barriers faced by the technical vs non-technical firms PAGEREF _Toc157177493 \h 51 Chapter 1: Introduction 1.1 Background In the contemporary business landscape, the emergence of Artificial Intelligence (AI) has ushered in a technological revolution that holds the promise of reshaping industries and propelling innovation and efficiency to unprecedented heights. Garbuio, (2019) stated that AI, once a futuristic concept confined to science fiction, has transcended the realm of imagination to become a tangible force driving change across various sectors. Its transformative potential has not only captivated the interest of corporate giants but has also piqued the curiosity of Small and Medium-sized Enterprises (SMEs), which collectively form the backbone of global economies. The allure of AI lies in its ability to harness data, algorithms, and computational power to emulate human intelligence, or in some cases, surpass it. This paradigm shift in technology has far-reaching implic...