AI, Union Power and Competitive Advantage a New Paradigm for Multinationals

This paper develops a new explanation based on a resource–institutional compatibility framework in which the value of artificial intelligence (AIs) depends not just on firm-level capabilities but more so on national labour institutional compatibility. This perspective addresses a key limitation inherent in most traditional formulations of the Resource-Based View (RBV), namely their tendency to overlook the role of institutional frictions. The study suggests that firms with high socio-political capital through strong unionisation and collective bargaining will be environments where AI-induced restructuring runs the risk of greater socio-political imperatives undermining AI value potential. The implication is that multinational enterprises (MNEs) must factor in both labour relations and the institutional configurations in their host destinations—over and above the level of technological readiness—when taking AI across borders. The strategic advantages of the AI boom are not ubiquitous – they depend on other forms of “institutional legitimacy and social license.”