Vol. 8, Issue 1, Part A (2026)

In an increasingly dynamic and competitive business environment, small and medium-sized enterprises (SMEs) are adopting artificial intelligence (AI) to enhance operational agility and decision-making capabilities. Beyond technological adoption, the ethical climate surrounding AI use has emerged as a critical strategic enabler of agile operations. This study examines how an ethical AI climate characterized by transparency, accountability, fairness, and data responsibility supports agility in SME operations. Ethical AI practices foster employee trust, reduce resistance to technological change, and improve the quality and speed of managerial decisions. Moreover, an ethical AI climate enables SMEs to respond effectively to market volatility while maintaining compliance with regulatory and societal expectations. By integrating ethical considerations into AI-driven processes, SMEs can balance innovation with responsibility, thereby achieving sustainable operational agility. The findings highlight that ethical AI is not merely a governance mechanism but a strategic resource that strengthens adaptive capacity and long-term competitiveness in SMEs.