AI Adoption and Organizational Resilience in Turbulent Environments: The Mediating Role of Employee Digital Literacy and the Moderating Role of Innovation-Supportive Climate in the Iraqi Hospitality Sector

Abstract

This study examines whether adopting artificial intelligence (AI) strengthens organizational resilience when the operating environment is hostile, and identifies the internal conditions an organization must satisfy before an AI investment translates into resilience. Two mechanisms anchor the argument: employee digital literacy, which carries the effect, and an innovation-supportive climate, which conditions it. We surveyed 400 employees across three premium hotels in Baghdad, Iraq, sampled by operational level, and tested the model with structural equation modeling in AMOS 26.0. The results show that AI adoption alone yields only a modest direct gain in resilience. Slightly more than half of its total effect on organizational resilience operates through employee digital literacy rather than flowing directly, and this indirect path strengthens where employees work in a climate that rewards experimentation. For practice, the findings position AI as a potential resource rather than a self-contained solution: hotels that invest in the technology without a parallel investment in the people who operate it, and in the climate they work in, realize only part of the available return. Theoretically, we interpret the case through the resource-based view (RBV) and dynamic capabilities theory (DCT): AI adoption supplies the strategic resource, employee digital literacy is the dynamic capability that activates it, and innovation-supportive climate is the boundary condition governing how freely that capability is exercised. The framework should extend to other settings where organizations operate with limited resources under sustained instability