Beyond adoption: how algorithmic trust and data-driven culture translate agentic artificial intelligence readiness into strategic agility among Sri Lankan SMEs

Abstract

This study aims to investigate how Agentic artificial intelligence (AI) readiness enhances Strategic Agility among small and medium-sized enterprises (SMEs) in Sri Lanka. Drawing on the Technology-Organisation-Environment framework, Resource-Based View, and Dynamic Capabilities theory, this study incorporated data-driven culture as a moderating variable. This quantitative study employed a questionnaire survey to collect data from 293 Sri Lankan SMEs. The variables were derived from previously validated instruments. Partial least squares structural equation modelling (PLS-SEM) with SmartPLS 4 was used to investigate the proposed relationships. The relative significance of the predictors was assessed using artificial neural network analysis (ANN) in SPSS 29. The results revealed that Technological Infrastructure Readiness, Algorithmic Self-Efficacy, Competitive Pressure, Leadership Strategic Orientation, Responsible AI Governance Maturity and AI Human Skills significantly influenced Algorithmic Trust. Algorithmic Trust significantly enhanced Strategic Agility, whereas a data-driven culture strengthened this relationship. The ANN results further confirmed the importance of Responsible AI Governance Maturity, Leadership Strategic Orientation and Algorithmic Trust. This study highlights the importance of Algorithmic Trust, Responsible Governance, AI-Related Human Skills and data-driven culture in translating Agentic AI Readiness into Strategic Agility. The findings offer useful implications for SME owners and policymakers seeking to implement autonomous AI systems in emerging economies. This study enhances the understanding of Agentic AI adoption in SMEs by moving beyond adoption intention and examining how AI Readiness produces strategic outcomes. It emphasises the role of Algorithmic Trust and data-driven culture in enabling SMEs to achieve Strategic Agility. By integrating Algorithmic Trust and data-driven culture, this study explains how SMEs can convert Agentic AI readiness into Strategic Agility, rather than merely adopting AI technologies.