Sources of Variation in the Efficiency of Adopting Management Innovation: The Role of Absorptive Capacity Routines, Managerial Attention and Organizational Legitimacy

Abstract

Drawing on two in-depth case studies, this paper develops a conceptual model of how absorptive capacity routines and their underlying processes of evolution influence the efficiency of management innovation adaptation processes. The model highlights three important relations. First, although different configurations of absorptive capacity routines can lead to the successful implementation of the same management innovation – namely the reconfiguration of firms’ value chains through sourcing of business services from offshore countries – the sequence of developing routines, their adequacy, and the interdependencies fit between routines partly explain how rapidly and seamlessly a firm is able to implement a management innovation. Second, we identify managerial attention and organizational legitimacy as two critical and interrelated sources of variation of the efficiency in the process of adopting and adapting management innovations. Finally, attention direction by a top-level internal change agent is more effective than local problemistic search to foster managerial attention and organizational legitimacy to both the management innovation to be adopted, and the need to develop and put into practice an appropriate set of absorptive capacity routines.