Abstract:
The Sri Lankan garments sector is under simultaneous pressure to modernize and enhance social
inclusion. There is an emerging interest in AI and DE&I as organizational strategies. However, there is little
empirical research on the integrated influence of AI and DE&I on sustainable performance, particularly in South
Asian manufacturing. This research study focuses on the impact that the adoption of AI and DE&I have on the
sustainable organizational performance of Hirdaramani Garments (Pvt) Ltd which is a BOI-registered mid-tier
apparel exporter located in Biyagama, Sri Lanka. The primary data were analyzed on Pearson correlation, multiple
regression, mediation analysis (Baron & Kenny,1986), and PROCESS Macro moderation (Hayes,2022) using
quantitative and cross-sectional survey design with stratified random sampling (n = 150). The study found that AI
adoption and sustainable performance are positively related (r = 0.712, p < 0.01). DE&I practice and workforce
engagement also positively related (r = 0.684, p < 0.01). The model explains 63.4% variance in sustainable
performance (R² = 0.634). The AI-DE&I impact on performance was observed to be partially mediated by the
engagement of the workforce (β=0.541, p < 0.001), while a significant moderation of the AI-performance
relationship was noted by the technological readiness (β=0.218, p < 0.05). The paper extends the TAM and Social
Exchange Theory to manufacturing HR and offers evidence-based insights for apparel sector leaders and
policymakers.
