Journal of Service Research, Ahead of Print.
Artificial intelligence (AI) is a significant part of digital transformation that signifies new requirements for middle managers in AI-integrated work contexts. This is particularly evident in financial service industries. Given the significance and rapidity of this technological transition, this case study investigated how middle managers perceived the impacts of AI system integration on their work characteristics. Interview data were gathered from 25 middle managers of a company providing financial services. The data were analyzed using the Gioia method. The findings showed that the AI systems applied in the case company were perceived as technical tools (mechanical AI) or coworkers (thinking AI and feeling AI), which had different impacts on middle managers’ work characteristics and the relationship between humans and AI systems. The middle managers’ work characteristics included contextual, task, competence, social, and relationship characteristics. Regarding the relationship characteristics, this study shows theoretically distinct human–AI relationship types. The findings are organized into a conceptual framework. AI system integration in service teams is a complex phenomenon that makes middle managers’ work more demanding and requires balancing and managing multiple challenges and dialectical tensions. The findings inform the selection and training of managers according to changing work characteristics in the digital age.