Ethical Leadership and Management of Small- and Medium-Sized Enterprises: The Role of AI in Decision Making

Tjaša Štrukelj () and Petya Dankova
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Tjaša Štrukelj: Faculty of Economics and Business, University of Maribor, 2000 Maribor, Slovenia
Petya Dankova: Business Faculty, University of Economics, 9002 Varna, Bulgaria

Administrative Sciences, 2025, vol. 15, issue 7, 1-27

Abstract: The integration of artificial intelligence (AI) within the decision-making processes of small- and medium-sized enterprises (SMEs) presents both significant opportunities and substantial ethical challenges. The aim of this paper is to provide a theoretical model depicting the interdependence of organisational decision-making levels and decision-making styles, with an emphasis on exploring the role of AI in organisations’ decision making, based on selected process dimension of the MER model of integral governance and management, particularly in relation to routine, analytical, and intuitive decision-making capabilities. The research methodology employs a comprehensive qualitative analysis of the scientific literature published between 2010 and 2024, focusing on AI implementation in SMEs, ethical decision making in integral management, and regulatory frameworks governing AI use in business contexts. The findings reveal that AI technologies influence decision making across business policy, strategic, tactical, and operative management levels, with distinct implications for intuitive, analytical, and routine decision-making approaches. The analysis demonstrates that while AI can enhance data processing capabilities and reduce human biases, it presents significant challenges for normative–ethical decision making, requiring human judgment and stakeholder consideration. We conclude that effective AI integration in SMEs requires a balanced approach where AI primarily serves as a tool for data collection and analysis rather than as an autonomous decision maker. These insights contribute to the discourse on responsible AI implementation in SMEs and provide practical guidance for leaders navigating the complex interplay between (non)technological capabilities, ethical considerations, and regulatory requirements in the evolving business landscape.

Keywords: MER model of integral governance and management; strategic management; management process; intuitive decision making; analytical decision making; routine decision making; responsible leadership; small- and medium-sized enterprises (SMEs); artificial intelligence (AI); AI regulatory frameworks (search for similar items in EconPapers)
JEL-codes: L M M0 M1 M10 M11 M12 M14 M15 M16 (search for similar items in EconPapers)
Date: 2025
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