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Generative AI and Organizational Structure in the Knowledge Economy
Fasheng Xu, Jing Hou, Wei Chen, Karen Xie
https://arxiv.org/abs/2506.00532 https://

Generative AI and Organizational Structure in the Knowledge Economy
The adoption of GenAI is fundamentally reshaping organizations in the knowledge economy. GenAI can significantly enhance workers' problem-solving abilities and productivity, yet it also presents a major reliability challenge: hallucinations, or errors presented as plausible outputs. This study develops a theoretical model to examine GenAI's impact on organizational structure and the role of human-in-the-loop oversight. Our findings indicate that successful GenAI adoption hinges primarily on mai…