What Fosters Individual-Level Absorptive Capacity in MNCs? An Extended Motivation\u2013Ability\u2013Opportunity Framework

H Emre Yildiz,Adis Murtic,Anders Richtnér,Udo Zander

doi:10.1007/s11575-018-0367-x

Abstract

Absorptive capacity has been marked as one of the most important capabilities of Multinational Corporations for effective management of knowledge. To address calls for research on micro-level origins of the concept, this paper focuses on the determinants of individual-level absorptive capacity. We examine the extent to which individuals’ capability to recognize, assimilate and exploit new knowledge from the environment is shaped by different forms of work motivation (i.e., intrinsic and extrinsic), overall ability, exposure to diverse country contexts and personal characteristics. Drawing on and extending the Motivation–Ability–Opportunity framework, we develop and test a set of hypotheses. Using a unique dataset collected from 648 individuals in a multinational corporation, we show that individuals’ intrinsic motivation and overall ability are the key antecedents of absorptive capacity. In contrast, extrinsic motivation does not emerge as a significant predictor. We find that past international assignments to distant countries could be detrimental to individuals’ absorptive capacity. However, our results suggest that for those individuals who are open to new experiences, assignments to distant countries become useful opportunity for absorptive capacity development. These findings contribute to existing literature by showing effects of alternative types of motivation and underscoring the importance of using selective assignment when considering exposure to diverse country context as a tool for employee capability development.

Highlights

The ability to continuously renew, develop and transfer knowledge-based assets is a central goal for firms
The role of absorptive capacity is especially paramount for Multinational Corporations (MNCs), as sustaining their performance depends upon their ability to learn from diverse environments within which they operate (Almeida et al 2002; Minbaeva et al 2003; Song 2014; Song and Shin 2008; Song et al 2011; Regnér and Zander 2011, 2014)
Given that some of our measures are subjective in nature and prone to possible biases emerging from common rater effects, we have followed the remedies suggested by Podsakoff et al (2003)

Summary

Introduction

The ability to continuously renew, develop and transfer knowledge-based assets is a central goal for firms In this regard, absorptive capacity stands out as the capability to support constant innovation and organizations’ learning from their environment (van Wijk et al 2008; Zahra and George 2002). Individuals play a crucial role in the creation, transfer and absorption of knowledge, which suggests that individual-level factors are a critical antecedent to firm-level innovative capabilities. Limited number of recent studies on individual-level absorptive capacity (e.g., Enkel et al 2017; Zhao and Anand 2009), on the other hand, have considered this capability as an exogenous given and examined its outcomes (e.g., innovative performance) without probing into antecedent factors that could influence how absorptive capacity develops among individual employees.

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