How leadership enhances absorptive capacity for industry 4.0 technology adoption through social integration mechanisms

PurposeThe purpose of this paper is to perform empirical tests to explore the influence of social integration mechanisms on organizations’ absorptive capacities theorized by Zahra and George.Design/methodology/approachThis study uses a cross‐sectional design to test the relationships between potential absorptive capacity, three social integration mechanisms (cross‐functional teams, participation in decision making, and self‐managing teams), and realized absorptive capacity, in a sample of 92 organizations that bid competitively to provide products and services to a US university.FindingsAn organization's use of cross‐functional teams is negatively related to its realized absorptive capacity and negatively moderates the relationship between potential and realized absorptive capacity. Self‐managing teams negatively moderate the relationship between an organization's potential absorptive capacity and its realized absorptive capacity.Research limitations/implicationsThe cross‐sectional design allows tests of relatedness but does not support cause‐and‐effect inferences.Practical implicationsManagers who follow the prescriptive implications of using social integration mechanisms to enhance their organization's absorptive capacity may actually hinder it. The type of social integration mechanism is an important consideration for managers of firm strategies.Originality/valueThis study extends and challenges the literature on absorptive capacity through its empirical analysis of the role of social integration mechanisms on an organization's absorptive capacity. Social integration mechanisms can have mixed moderating effects on the absorptive capacity development process, and potential absorptive capacity is not easily transformed into realized absorptive capacity. This study expands the context of absorptive capacity beyond R&D settings and incorporates a task environment that allows a direct linking of inputs and outputs.

The study aims to answer how and what kind of the social integration mechanisms may influence the relationship between the two dimensions of absorptive capacity which is, potential absorptive capacity (PACAP) and realized absorptive capacity (RACAP). The social integration mechanism has been neglected from the discussion on how firm assimilate and transform external knowledge to advance their absorptive capacity. In doing so, we answer recent call for research about a more thorough systematic literature review of the absorptive capacity and social integration mechanisms and its definitions. We surveyed literatures published during the years 2010 to 2020 and only found 8 articles discussing moderating variable between PACAP and RACAP out of 277 articles on absorptive capacity. The aim of this systematic review is to evaluate what social integration mechanisms influence the relationship between PACAP and RACAP and how they help overcome barriers to knowledge sharing. The results showed social integration mechanism can be in terms of high commitment works system, knowledge ambiguity, organizational size, relational learning, and cultural balance. Therefore, more research underlines the importance of social integration mechanism should be encouraged.

With the increasing recognition of the value of external knowledge, organisations are interested in understanding how to boost their absorptive capacity. Social integration mechanisms have been theorised as a key predictor of absorptive capacity, both as a necessary condition for the development of its dimensions (knowledge acquisition, assimilation, transformation and application) and as a contingency factor that influences the relationships between these dimensions. However, the empirical evidence that explores these ideas is limited. To address this, we explore the survey data from 145 Brazilian firms and find that social integration mechanisms play a controversial role in absorptive capacity. Without a certain level of social integration mechanism usage, high levels of the absorptive capacity dimensions are not possible. However, social integration mechanisms also dampen the positive effects of knowledge acquisition on knowledge assimilation and transformation. Therefore, the highest level of usage of social integration mechanisms is not always beneficial for organisations.

This study originates from the proposition that absorptive capacity (ACAP) as a “whole is greater than the sum of its parts”. Extant literature assumes that organizational ACAP is more than just the sum of the individuals’ ACAP, and that social integration mechanisms are needed to integrate knowledge from these individuals. Yet, empirical studies of these micro-foundations to arrive from the “parts” to the “whole” are still scarce. To address this gap, this study applies a multi-level fuzzy set qualitative comparative analysis (fs/QCA) approach to derive multiple configurations which lead to high or low organizational ACAP. The results show that individuals’ ACAP is a necessary, yet insufficient condition for high organizational ACAP, thereby supporting the assumption that ACAP is more than the sum of individuals’ ACAP. Further, it shows that social integration mechanisms are needed as complements to individuals’ ACAP, and that these mechanisms need to support both the ability and motivation for knowledge integration. Furthermore, the results show that there is equifinality in the configurations, indicating that there are multiple ways to achieve high ACAP. These results contribute to a better understanding of the causal complexity of the micro-foundations of ACAP and have implications for managerial dynamic capabilities.

Background: The objective of this research is to investigate the relationship between relational ties, absorptive capacity, and social integration mechanisms in small retail businesses associated with direct and indirect horizontal networks. Materials and Methods: To achieve the objective, an empirical research study with a quantitative approach was conducted involving 409 retail businesses associated with direct and indirect horizontal networks. The proposed relationships were tested using the structural equation modeling technique. Results: The results indicate that a company's participation in direct horizontal networks has a greater positive impact on relational ties and absorptive capacity than participation in indirect horizontal networks. They also suggest that the use of different types of social integration mechanisms affects the relationship between relational ties and the company's absorptive capacity in different ways. Conclusion The research proves that relationships foster a company's absorptive capacity. It particularly, indicates that it is not just maintaining relationships with other network members that impacts absorptive capacity, but the type of relationship established between network members (direct or indirect) should be considered, as direct relationships have proven to be more favorable. There is sufficient evidence to assert that by investing in interorganizational relationships, the company can enhance its absorptive capacity and thus access various other competitive advantages

Research summary : In this study, we build on the micro‐foundations perspective and investigate how individual characteristics contribute to the development of firm absorptive capacity. In particular, we assess how individual learning goal orientation affects firm potential and realized absorptive capacity. Furthermore, we study how individuals' civic virtue acts as a micro‐level social integration mechanism that moderates the effect from firm realized absorptive capacity to potential absorptive capacity. Using the multilevel structural equation modeling technique and data from 871 core‐knowledge employees nested in 139 high‐technology firms, we find support to our major hypotheses. Together, this study finds support for the micro‐foundations' perspective and generates novel insights on how individual‐level factors could be linked with firm‐level heterogeneity in absorptive capacity . Managerial summary : We study how employees' characteristics contribute to a firm's absorptive capacity, that is, the ability of a firm to identify, assimilate, and exploit knowledge from the environment. Because firms have increasingly tapped into external resources to foster innovation over the past two decades, absorptive capacity is crucial to firm learning and success. Using data from 871 core‐knowledge employees in 139 high‐technology firms, we find that individual employees' learning goal orientation, the tendency to seek improvements in employees' competence and to understand or master new things advances the development of a firm's potential and realized absorptive capacity. More important, individual employees' civic virtue, the discretionary involvement in company issues, serves as a social integration mechanism that reduces the gap between firm potential and realized absorptive capacity . Copyright © 2017 John Wiley & Sons, Ltd.

Objective: To understand how social integration mechanisms influence the adoption of technological innovations by producers associated with agricultural cooperatives. Theoretical Framework: It is based on studies that address Absorptive Capacity (AC), especially the model proposed by Torodova and Durisin (2007), as well as Social Integration Mechanisms (MIS), agricultural cooperatives and technological innovations. Method: The research is characterized as descriptive and used a qualitative approach through a multiple case study carried out in three Agricultural Cooperatives in the South of the country. To analyze the information collected, content analysis was used through categories defined a priori and a posteriori, to interpret the information and seek evidence that leads to the objective proposed in the research. Results and Discussion: As a result, this research confirmed the adoption of innovation through social integration mechanisms (MIS) as a product resulting from the AC of cooperatives. Research Implications: Certifies the importance of MIS as facilitators in the process of recognition, acquisition, assimilation, transformation and exploration of knowledge in the cooperative context, influencing the adoption of innovation by producers, thus increasing the CA of agricultural cooperatives. Originality/Value: The main novelty of this research is in the confirmation and operationalization of the Social Integration Mechanisms (MIS), present in the different phases of the CA of cooperatives, proving the theoretical proposition of Todorova and Durisin (2007).

While high technological distance to project partners outside of the established value chain can positively influence innovation performance, project goals can only be achieved if the social integration of project members is improved in terms of coordination and communication. This paper draws on embeddedness and absorptive capacity literature to explore how social integration mechanisms translate into different learning outcomes in distant collaborations within and across organizational boundaries. Drawing upon expert interviews with project members as our primary source of data, we conducted an in-depth multiple case study analysis of a number of inter-organizational projects. Our findings indicate that the effect of different types of social integration mechanisms on learning outcomes also affect the ability to bridge distances in process and product technology. Moreover, they suggest that it is not just the extent, but also the interplay of social integration mechanisms surrounding internal and external absorptive capacity routines that enable project members to engage in the exploration, transformation and exploitation of distant knowledge. In examining how social integration mechanisms foster learning outcome in distant collaborations, our study contributes to the literature on absorptive capacity.

Purpose To explore the structures and processes within agricultural advisory organisations that may enhance absorptive capacity (AC) and determine how organisations develop their AC. Design/methodology/approach A qualitative explorative case study of advisory services in Norway, which are structured as farmer cooperatives. Interviews, document analysis, and internet information are applied. Findings Strong social mechanisms are needed to realise the potential AC in an organisation. Advisory organisations with incorporated research and development (R&D) can translate findings from both their own research projects and external sources, which increases their absorptive capacity and boosts service innovation. Further, systematic emphasis on continuous learning strengthens AC, as do networking and internal communications. Practical implications By improving the incorporation of R&D, continuous learning and networking, advisory service organisations can benefit from the Agricultural Knowledge and Innovation System (AKIS). Ultimately farmers can receive more updated and relevant services for their farms. Theoretical implications Incorporation of R&D, continuous learning and networking are significant social integration mechanisms that can improve a firm’s AC. Originality/value Previous studies on AC have shown that it is important for innovation. This paper sheds additional light on how AC can be improved.

This study analyzes the relationships between absorptive capacity (ACAP), management innovation, technological innovation, and firm performance through a multiple mediation model. Using survey data from a sample of firms, the proposed relationships were tested through structural equation modeling (PLS-SEM). The findings highlight the critical role of management innovation as a social integration mechanism that bridges the gap between potential ACAP (PACAP) and realized ACAP (RACAP). Specifically, the results reveal three complementary mediations: (i) management innovation mediates the PACAP-RACAP relationship, (ii) RACAP mediates the management innovation-technological innovation relationship, and (iii) technological innovation mediates the management innovation-performance relationship. Furthermore, full mediation effects are found in the PACAP-technological innovation, PACAP-performance, and RACAP-performance relationships. These findings underscore the importance of management innovation not only as an innovation outcome but also as a key enabler of knowledge transformation and exploitation. The study contributes to the absorptive capacity and innovation literature by providing empirical evidence from an emerging economy, reinforcing the idea that innovation -both managerial and technological- is essential for translating absorbed knowledge into superior firm performance.

ABSTRACTDynamic capabilities that enable innovation are crucial to survival and success in today's highly competitive business environment, because they enable organizational adaptation, transformation, and seizing of opportunities. Absorptive capacity is an important dynamic capability that enables organizations to leverage external knowledge for innovation purposes. In this theory‐building article, we address the fundamental research question of how organizations can leverage external partners as external sources of knowledge. We offer three primary contributions to the literature on managerial decision‐making. First, by conceptualizing knowledge absorption as a collaborative, interorganizational endeavor, we extend the literature on absorptive capacity, thereby enabling its application to innovation‐related contexts aside from R&D, to which it has traditionally been applied. Second, by focusing on social integration mechanisms as links between the capabilities, expertise, and knowledge of individuals, groups, and the organization as a whole, we heed calls to clarify the microfoundations of organizational capabilities. Third, although social integration is a multidimensional construct, few studies have addressed the influence of its individual dimensions. We outline how individual social integration dimensions exert differing influences on the individual knowledge absorption stages, thereby taking a first step toward unraveling the multidimensional nature of social integration and laying the foundation for future social integration research both in and beyond the absorptive capacity context.

This study examines whether and how a school's information and communication technology (ICT) knowledge absorptive capacity (ACAP) affects technology integration in schools. In addition, it investigates the influence of various contextual factors on the degree of contingency of ACAP, such as activation triggers, social integration mechanisms and regimes of appropriability. The study is based on a random sample of N = 411 schools representative of Germany. Structural equation modelling and machine learning were employed. The findings indicate that ICT ACAP has a positive impact on technology integration in schools and serves as a mediator in the relationship between external knowledge and technology integration. The impact of ICT ACAP on technology integration is contingent upon the presence and efficacy of knowledge‐sharing mechanisms within the school, as well as the extent to which schools engage in collaborative efforts with competitors (coopetition). The insights of this study have implications for policymakers and educational leaders, who could prioritize building ACAP and fostering collaborative networks to create more adaptable and innovative school environments. Practitioner notes What is already known about this topic For schools, technology integration is considered an important educational innovation. Acquiring, creating and sharing knowledge are essential for an efficient technology integration. Knowledge absorptive capacity (ACAP) is a critical factor in the acquisition of knowledge. What this paper adds Higher information and communication technology (ICT) ACAP is associated with increased technology integration. ICT ACAP mediates between the depth of external knowledge and technology integration. The efficacy of ACAP is contingent upon a number of contextual variables, in particular, knowledge sharing in schools and coopetition. Implications for practice and/or policy Schools need to identify, integrate and exploit relevant ICT knowledge to integrate technology successfully. Schools must develop systematic knowledge management systems to ensure that newly acquired knowledge is used reasonably. Schools must collaborate, even if they compete, to succeed in technology integration.

Absorptive capacity is an important organizational capability constituted by exploratory, transformative, and exploitative learning processes. Leadership has been shown to affect such processes, but little is known about how the combined leadership styles of top and middle management influence absorptive capacity. This theory-building, exploratory qualitative case study discusses the need for top and middle management to be ambidextrous and to change their styles to better facilitate the three different learning processes. We found that an exploratory learning process was facilitated when both top and middle management used a transformational style, a transformative learning process was facilitated when top management used a transformational style while middle management used a transactional style, and an exploitative learning process was facilitated when both top and middle management used a transactional style. Furthermore, for each of the three learning processes, the leadership styles of top and middle management operated more effectively when certain attributes of the organizational context were emphasized.

The study explores the connection between the organisational and individual level absorptive capacity in the context of shopfloor employees. Most literature on absorptive capacity focuses on the organisational level, while there has been less focus on the social integration mechanisms between the individual and organisational level of absorptive capacity. Via an action research study on shopfloor employees in a low-tech industry, it is shown how innovation activators can facilitate social integration mechanisms and identify the potential of the individual level ideas and assist the transformation of these to an organisational level.

Building on Zahra and George's Reconceptualisation of Absorptive Capacity, this paper makes two key contributions to Absorptive Capacity theory. First and most instrumentally, it provides one of the first empirical accounts of the Social Integration Mechanism, the factors that influence the conversion of Potential Absorptive Capacity (i.e. knowledge stocks) to Realized Absorptive Capacity (the primary mechanism for profit creation; ibid, p191). Secondly, in regards to Potential Absorptive Capacity (PAC), it demonstrates that knowledge stocks are better interpreted as a formative, higher order construct consisting of three dimensions: individually-held knowledge, network-base knowledge from Strong ties, and network-based knowledge from Weak ties. In doing so, it provides both empirical evidence to support Zahra and George's original model, as well as a finer grained interpretation to their model.