From Efficiency to Strategic Optionality : How AI-Enabled Electrification Creates Business Value Beyond Cost Reduction

Sammanfattning

Artificial intelligence (AI) is increasingly embedded in electrification-related industries, where it is widely applied to improve operational efficiency, data processing, and system optimisation. While existing research has extensively documented these technical and operational benefits, less is known about how organisations translate AI-enabled efficiency gains into strategic business value. This thesis addresses this gap by examining how AI-enabled electrification contributes to business value creation beyond cost reduction, with a particular focus on strategic decision-making and organisational processes. Adopting an exploratory qualitative research design, the study employs a multiple-case approach based on written questionnaire data collected from senior managers in large electrification firms operating in Sweden. Drawing on Socio-Technical Systems Theory, the Knowledge-Based View, Technology–Strategy Translation Theory, and Real Options Theory, the analysis investigates how AI-generated technical insights are interpreted, integrated, and enacted within organisational decision structures. The findings reveal that AI is primarily used as an operational augmentation tool, supporting efficiency, analytics, and productivity, while its influence on strategic decision-making remains limited. A key empirical contribution of the study is the identification of a “translation gap” between technical AI outputs and strategic business outcomes, driven by constraints in organisational absorptive capacity, trust, governance, and cross-functional integration. The study does not propose the “translation gap” as a novel theoretical concept; rather, it empirically examines and explains this phenomenon within AI-enabled electrification, building on existing literature on digital transformation, absorptive capacity, and AI governance. The results suggest that while AI-enabled electrification holds the potential to create strategic optionality, this potential is largely unrealised in practice. The study concludes that realising business value from AI requires not only technological capability but also deliberate organisational and managerial mechanisms that enable effective translation from technical insight to strategic action.