When Knowledge Diversity and AI Climate Enable Innovation: A Mediated Necessary Condition Analysis

Abstract

Abstract

Background: Drawing on the principles of social exchange theory (SET) and the job demands-resources (JD-R) model, this study examines how individual knowledge diversity (IKD), artificial intelligence-driven climate (AIC), and perceived sustainability integration (PSI) affect employee innovative behavior (IB) through the mediating role of psychological contract breach (PCB). Method: We collected multi-wave data from 319 full-time employees in private service sector organizations in Pakistan, using a 30-day time lag between each wave. Study 1 employed partial least squares structural equation modeling (PLS-SEM) to assess hypothesized relationships and mediation effects. Study 2 applied necessary condition analysis (NCA) to evaluate whether the proposed antecedents represent indispensable preconditions for employee IB. Results: Findings show that IKD and AIC have significant positive effects on IB, which are partially mediated by PCB. PSI, however, exerts no direct influence on IB but indirectly contributes via PCB and exhibits a full mediation effect. NCA further confirms that both IKD and AIC are necessary conditions for IB, while PSI does not qualify as a necessary precondition. Conclusion: This study contributes theoretically by positioning PCB as a core psychological mechanism through which organizational resources and values influence innovation outcomes. It also expands the IKD literature by extending its scope to the individual level and enriches methodological insight through the combined use of PLS-SEM and NCA. Practically, the findings underscore the importance of investing in AI infrastructure, structured support systems, IKD strategies, and trust-building mechanisms to enhance innovation climates.