Man-Machine Collaboration in Organizational Decision-Making: An Experimental Study Using Loan Application Evaluations

With artificial intelligence and machine learning (AI/ML) being increasingly employed in complex decision making, human experts are being required to collaborate with these technologies in order to improve their organizational outcomes. The use of AI/ML in organizational decision-making involves three components: the people, the technology, and the organizational practices. Using the loan application reviewing task context, we examine factors that can produce effective collaboration between AI/ML and human decision-makers, leading to enhanced firm performance. Our experimental study shows that firm success when employing AI/ML for decision-making depends on both high-quality AI technologies and well-aligned organizational practices. Most importantly, the two factors are inseparable, and their co-presence is crucial if firms want to close the theoretical gap between their potential and their most fully realized capacity