Journal of Intelligent Management
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Journal of Intelligent Management
Edited By: Editorial Office | Online ISSN: 3080-2350 | Print ISSN: 3008-1742
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Latest IssueVolume 2, Issue 1June 2026

Volume 1 | Issue 2 | Published 2025-12-25

The Impact of AI Driven Technological Transformation on The Business Model Transformation of Chinese Strategic Consulting Firms

DOI: https://doi.org/10.64025/j.lmjim.25.245057

Received: 2025-12-02 | Revised: 2025-12-12 | Accepted: 2025-12-22 | Published: 2025-12-25

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Abstract

This study examines how artificial intelligence (AI)-driven technological transformation influences business model transformation in Chinese strategic consulting firms through a mixed-methods approach combining panel data analysis and structured interviews. Using panel data from 128 Chinese strategic consulting firms over the period 2020-2023, alongside 38 in-depth interviews with senior executives, this research employs a difference-in-differences (DID) estimation model to assess the causal impact of AI adoption on business model transformation indicators. The findings reveal that AI-driven technological transformation significantly accelerates business model transformation in Chinese strategic consulting firms (β = 0.38, p<0.001), with particularly strong effects observed in value proposition reconfiguration (β = 0.45, p<0.001) and operational process optimization (β = 0.41, p<0.01). Contrary to established theories suggesting gradual adaptation patterns (Türkeș et al., 2021), this study demonstrates that Chinese firms pursuing emancipatory AI adaptation strategies achieve 72% faster business model transformation rates compared to those following exploitive approaches, outpacing global averages. The theoretical contribution lies in challenging the incremental change paradigm by proposing a dynamic adaptation framework that explains rapid business model reconfiguration under AI-driven transformation in the Chinese context. These findings have significant implications for strategic management theory and provide actionable insights for Chinese consulting firm executives navigating technological transformation in China’s rapidly evolving digital economy.

Highlight

* Research Finding Highlight: AI-driven technological transformation significantly accelerates business model transformation in Chinese strategic consulting firms, particularly in value proposition reconfiguration and operational process optimization. Notably, firms adopting emancipatory AI adaptation strategies achieve a 72% faster transformation rate than those with exploitive approaches—breaking the traditional perception of incremental change and outperforming the global average. * Theoretical and Practical Highlight: Theoretically, it proposes a dynamic adaptation framework that challenges the incremental change paradigm, enriching research on AI-driven business model reconfiguration in the Chinese context. Practically, it provides precise and actionable decision-making references for executives of Chinese consulting firms navigating technological transformation in the digital economy.

Keywords

artificial intelligence, business model transformation, Chinese strategic consulting, technological transformation, organizational adaptation, China’s digital economy

Authors & Affiliations

Citation

Chen, G., Jantakoon, T., & Zhu, W. (2025). The Impact of AI Driven Technological Transformation on The Business Model Transformation of Chinese Strategic Consulting Firms. Journal of Intelligent Management, 1(2), 58-69. https://doi.org/10.64025/j.lmjim.25.245057

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1. Introduction

The Chinese strategic consulting industry, traditionally characterized by human expertise and relationship-based value creation, faces unprecedented transformation from artificial intelligence (AI) technologies accelerated by China’s national AI strategy and digital economy initiatives [1, 2]. Recent developments in AI capabilities, particularly in China’s rapidly advancing technology ecosystem, have fundamentally challenged the established business models of Chinese strategic consulting firms, forcing them to reconceptualize their value propositions, operational processes, and client engagement mechanisms within the unique institutional environment of China’s socialist market economy [3]. This technological transformation represents more than a simple automation of existing processes; it constitutes a paradigmatic shift that requires comprehensive business model transformation to maintain competitive advantage in China’s increasingly AI-driven business environment [4].

1.1 Research Gap and Theoretical Foundation

Despite the growing recognition of AI’s transformative potential, existing literature exhibits significant gaps in understanding how AI-driven technological transformation specifically impacts the business model transformation of Chinese strategic consulting firms. Prior research has predominantly focused on AI implementation in manufacturing and technology sectors [5], with limited empirical evidence from professional services contexts. Furthermore, current theoretical frameworks, particularly the Technology-Organization-Environment (TOE) model [6] and Adaptive Structuration Theory (AST) , provide insufficient explanation for the rapid and comprehensive nature of business model transformation observed in AI-driven environments [6]. The strategic consulting industry presents unique characteristics that distinguish it from other sectors: knowledge-intensive services, relationship-based value creation, and human expertise as the primary competitive asset [7]. These characteristics create specific challenges and opportunities in the context of AI adoption that have not been adequately addressed in existing literature. Recent studies by Bolanos, Salatino [8] highlight the potential of AI to enhance strategic decision-making processes, while Berg and Emanuelsson [9] provide insights into AI adaptation strategies, yet neither specifically addresses the consulting industry’s unique transformation dynamics.

1.2 Research Questions and Objectives

This study addresses two primary research questions: RQ1: How does AI-driven technological transformation influence the speed and extent of business model transformation in Chinese strategic consulting firms? RQ2: What mediating mechanisms explain the relationship between AI adoption strategies and business model transformation outcomes in the Chinese strategic consulting context? The research objectives are threefold: (1) to empirically quantify the impact of AI-driven transformation on business model transformation indicators in Chinese strategic consulting firms; (2) to identify and analyze the mediating mechanisms that explain this relationship; and (3) to develop a theoretical framework that explains rapid business model transformation under technological transformation conditions in China’s digital economy context.

1.3 Theoretical and Practical Contributions

This research makes several significant theoretical contributions. First, it extends the AI-business model innovation literature [10] by providing context-specific insights from the Chinese strategic consulting industry. Second, it challenges the incremental change assumption prevalent in existing organizational transformation theories by demonstrating conditions under which rapid, comprehensive transformation occurs in China’s unique institutional environment. Third, it integrates insights from strategic decision-making theory [11] and AI adaptation frameworks to develop a dynamic adaptation model specific to Chinese professional services contexts [12]. From a practical perspective, this study provides Chinese strategic consulting firms with empirically-grounded insights for navigating AI-driven transformation [13]. The findings offer actionable frameworks for executives to assess their firm’s transformation readiness, select appropriate AI adoption strategies, and manage the associated organizational changes effectively [14].

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