Organizations increasingly invest in AI readiness, yet evidence remains mixed on whether such readiness improves performance directly or only after AI is adopted in practice. This study examines how innovation and the structural determinants of AI affect perceived organizational performance, with AI adoption tested as a mediating mechanism. Drawing on the TOE/TOEH framework, dynamic capabilities theory, and the resource-based view, data were collected through a bilingual online questionnaire from 422 professionals, mainly from MENA organizations. The model was assessed using SPSS, SmartPLS 4, and PROCESS Model 4. Results show that structural determinants strongly predict AI adoption, and AI adoption significantly improves perceived organizational performance. However, structural determinants do not directly affect performance once AI adoption is included. AI adoption fully mediates the structural determinants-performance relationship, while innovation affects performance directly and is not mediated by AI adoption. The study clarifies how AI readiness becomes performance-relevant only through actual adoption.
Keywords: AI adoption, AI readiness, Innovation, MENA, Organizational Performance, structural determinants
