AI-enabled Value Creation in International Business: Crossing the Boundary of Bounded Rationality

Until now research has assumed that value creation decisions are based on heuristic analysis and bounded rationality. Literature on computational rationality, however, argues that AI systems can access and process limitless real-time data to complement our heuristics and bounded rationality when
optimizing decisions on value creation. We examine how AI helps multinational enterprises create and adapt value in institutionally and culturally diverse settings, and how computational rationality can enhance value creation optimisation and thereby compress the boundary of bounded rationality.
Through in-depth examination of cases using AI systems, workshops on AI-driven firms, and interviews with AI experts, we explore how condition and construction factors in AI systems affect AI’s ability to make optimal rational and non-rational value creation choices, and how adaptation remains critical in
the international context. AI influences choices and helps optimise value if condition and construction factors are considered with due diligence and domain expertise. We further argue that AI represents a double-edged sword, influences choices and behavior in a predictable way, and may discriminate if
constructed imperfectly. It complements heuristics, thus compressing the boundary of our bounded rationality, and can replace more limited approaches to learning and decision-making in the international value-creation context.