The use of AI decision-support systems (AI-DSS) has the potential to augment human decision-making, yet employees typically do not optimally utilize these systems. To optimize their utilization, much research focuses on individual biases when working with these systems in lab experiments. However, organizational decision-making rarely happens in isolation as interpersonal dynamics shape behavior. Yet, the role of interpersonal dynamics in shaping augmented decision-making performance remains unexplored. This study examines these dynamics in demand forecasting, where planners receive (often competing) advice from both AI-DSS and sales managers. Specifically, based on dual process theory, we investigate whether demand planners’ decision-making performance is more strongly influenced by their perceived relational energy – a motivational force derived from energizing and positive interpersonal interactions – with sales managers (Type 1 thinking) than by structural assessments of their competence in giving advice (Type 2 thinking). Using a unique dataset of over 18,000 forecasting logs connected to a network survey on demand planners’ relationships with sales managers, we find that relational energy plays a dual role in affecting augmented decision-making performance. High relational energy with low-competence sales managers increased demand forecasting errors, probably due to over-reliance on poor sales advice and underutilization of superior AI-DSS advice (‘The Cost of Good Relations’). Conversely, low relational energy with high-competence sales managers also increased demand forecasting errors, likely due to underutilization of valuable sales advice (‘The Costs of Bad Relations). These findings show that demand planners’ augmented decision-making performance is strongly shaped by relational energy with sales managers, especially when it misaligns with their competence in giving advice. This study underscores the critical role of interpersonal dynamics in shaping the outcomes of augmented decision-making and reveals the hidden costs of relational energy in organizational contexts.
