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The integration of artificial intelligence (AI) into strategic management has transformed how organizations design decision systems and pursue competitive advantage in digital environments. This narrative literature review synthesizes peer-reviewed studies, focusing on AI-enabled strategic decision-making, algorithmic organizational systems, and the mechanisms through which AI generates sustained performance gains. Drawing on top-tier journals such as Strategic Management Journal, MIS Quarterly, and Technological Forecasting and Social Change, the analysis identifies recurring patterns of augmentation rather than replacement. It surfaces persistent tensions in human–AI collaboration and governance. Key findings show that AI augments predictive accuracy and resource allocation, yet introduces novel risks related to algorithmic bias, ethical oversight, and the erosion of traditional sources of advantage. The review traces the field’s evolution from early conceptual explorations of human–AI symbiosis to more recent examinations of generative AI’s disruptive potential and firm-level outcomes. Conceptual overlaps emerge around the centrality of hybrid decision architectures, while inconsistencies appear in assessments of long-term competitive sustainability. By mapping these streams and their interrelationships, the manuscript offers a structured foundation for understanding AI’s strategic role. It highlights critical gaps in cross-industry generalizability, ethical frameworks, and the interplay between technological affordances and organizational adaptation. This synthesis equips scholars and executives with an integrated lens on how AI is reconfiguring strategic management in the digital age.