The Role of Explainable AI (XAI) in Organizational Performance: An Empowerment Perspective

As explainable AI (XAI) becomes more prevalent in organizational decision-making, its impact on organizational performance remains underexplored and requires deeper investigation. This conceptual paper develops a theoretical model linking explainable AI (XAI) to organizational performance through psychological empowerment. Drawing on empowerment theory, we propose that XAI enhances users’ perceived competence, autonomy, and impact, moderated by trust calibration. We present four propositions outlining the relationships between XAI, psychological empowerment, and organizational performance. Our model contributes to the XAI, information systems (IS), and decision analytics literature by offering a socio-technical lens and a foundation for future empirical validation.