Business Ethics and Sustainable Competitive Advantage: The Sequential Mediating Role of Artificial Intelligence Capabilities and Organizational Innovation – A Field Study at Condor Electronics in Algeria

Abstract

Purpose: This study aims to examine the effect of business ethics on achieving sustainable competitive advantage, and to uncover the serial mediating role of AI capability and organizational innovation in this relationship, drawing on the Dynamic Capabilities View (DCV). The study seeks to clarify how business ethics can move beyond a mere commitment to values and norms to become a strategic resource that contributes to developing technical and innovative capabilities, thereby enhancing sustainable competitive advantage.

Design/methodology/approach: The study adopted a quantitative empirical design based on serial mediation analysis, conducted among employees of Condor Electronics in Algeria, with a sample of 95 respondents. Data were collected through a questionnaire and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) via SmartPLS 4.1. After confirming the reliability and validity of the measurement model, the structural model was tested using the bootstrapping technique to assess the significance of path coefficients and indirect effects.

Findings: The results revealed a positive and significant effect of business ethics on AI capability (β = 0.495, T = 6.272, p < 0.001) and on sustainable competitive advantage (β = 0.473, T = 6.778, p < 0.001). AI capability was also found to have a positive and significant effect on organizational innovation (β = 0.463, T = 5.255, p < 0.001), and organizational innovation on sustainable competitive advantage (β = 0.517, T = 6.785, p < 0.001). Furthermore, the results confirmed a significant serial mediating effect of AI capability and organizational innovation on the relationship between business ethics and sustainable competitive advantage (β = 0.145, T = 3.419, p = 0.001).

Originality/value: This study contributes to the literature by proposing an integrative model that explains the mechanism through which business ethics is translated into sustainable competitive advantage, enriching both the theoretical and practical understanding of this relationship within the context of industrial firms in emerging economies.