Organizational Absorptive Capacity Research Articles

How Organizational Absorptive Capacity Shapes Advocacy Outcomes

How Organizational Absorptive Capacity Shapes Advocacy Outcomes

Individuals’ capacity to innovate: a literature review of individual absorptive capacity

ABSTRACT Absorptive capacity refers to a firm’s ability to evaluate the value of the external knowledge, understand it, and utilize it to generate innovative outcomes. In essence, firm’s absorptive capacity is built on the absorptive capacity of its individual members. However, prior reviews and meta-analyses on absorptive capacity only covered the studies at the organisational level, paying limited attention to individual absorptive capacity. To fill this research gap and to respond to the emerging call for a micro-foundation perspective in organisation and strategy research, we conduct a systematic review of the literature on individual level absorptive capacity. Our review reveals that (1) individual absorptive capacity is widely regarded as a multi-dimensional construct and its definition is primarily derived from and consistent with the conceptualization of organisational absorptive capacity; (2) the majority of past studies adapt the existing measures of organisational absorptive capacity and adopt survey approach to measure individual absorptive capacity; (3) a series of micro-level and macro-level factors can influence an individual’s ability, motivation and opportunity to assimilate and take advantage of external knowledge, thereby playing a role in the development of individual absorptive capacity; (4) individual absorptive capacity can contribute to a variety of meaningful outcomes such as knowledge transfer, innovation and creativity. Based on our review of the findings in past research, we also identify research gaps and propose research directions for future research to further explore and extend this body of literature.

Digital technology adoption, absorptive capacity, CEO green experience and the quality of green innovation: Evidence from China

Adopting high-quality green practices is crucial for companies in response to the escalating environmental challenges worldwide. This study aims to investigate the intricate interactions among digital technology adoption (DIGA), organizational absorptive capacity (OBCP), CEO green experience (GREP), and the quality of green innovation (GRIN) in Chinese enterprises from 2010 to 2022. Our findings indicate a positive link between DIGA and GRIN, with OBCP serving a pivotal mediating function. Furthermore, GREP enhances this relationship significantly. Through regional and sector-specific analysis, we also uncover distinct correlations across various areas and sectors, influenced by their pollution levels. These insights are invaluable for corporate leaders, highlighting the critical role of digitalization, absorptive capabilities, and green leadership in advancing sustainable innovation.

Leveraging Supervisor Knowledge Sharing Behavior and Organizational Absorptive Capacity on Nurses’ Creativity

Background. Nurses’ creativity is an imperative necessity for healthcare organizations to grow. The creative abilities of nurses are affected by many factors; some of these factors are stimulants and some of these are inhibitors. Supervisors’ knowledge sharing behavior and the capacity to absorb new knowledge and technologies are important factors in the recent era that delineate the creativity of nurses. Aim of the Study. Assess the effect of supervisor knowledge sharing behavior and organizational absorptive capacity on nurses' creativity. Method. Cross-sectional multicenter descriptive correlational exploratory research design was used to conduct the study. Data were collected conveniently from 700 nurses recruited from five large hospitals at Alexandria, Egypt, using three self-administered printed questionnaires. Findings were investigated via descriptive and inferential statistics as well as structured equation modeling. Results. Nurses’ creativity was positively associated with supervisor knowledge sharing behavior and organizational absorptive behavior (r = 0.619, p value <0.001, and r = 0.545, p value <0.001, respectively). Supervisor knowledge sharing behavior accounted for 87% of variance in nurses’ creativity, while organizational absorptive capacity accounted for 55% of variance in nurses’ creativity. Conclusion. Supervisors’ knowledge sharing behavior and absorptive capacity of organization are powerful significant stimulants for nurses’ creativity. Implications to Nursing Management. Hospital directors, managers, and nursing leaders should cultivate knowledge sharing behavior in healthcare settings by establishing a reward and incentive system for healthcare workers who share their knowledge with their colleagues for mutual benefit and organizational development.

The Influence of Organizational Absorptive Capacity on Business Intelligence Systems Output in Strategic Management Perspective

The last decade has witnessed accelerated growth in investment in business intelligence (BI) systems. We still lack, however, a clear view as to when a particular system should be preferred over the others. This paper examines the role of the BI use for enhancing an organizational absorptive capacity (ACAP) for knowledge creation and proposes a model to investigate its direct effects on further firm’s performance. We collected survey data from 150 experts and decision-makers at the organizational level from several industries. For data analysis, we followed the general coding, aggregation and synthesis process with the use of the qualitative data analysis software. The results from the Partial Least Squares — Structural Equation Modelling (PLS-SEM) demonstrated that the BI use relates significantly to ACAP enhancement, thus fostering knowledge creation. Moreover, information quality and system quality are positively linked with BI use at the organizational level. The results demonstrate that organizational ACAP is critical to establishing appropriate technology infrastructure and to assimilating BI systems for organizational efficiency. Accordingly, the core contribution of the research provided a more comprehensive framework that serves managers and strategic professionals to assist them in classifying their ACAP measures before attempting to purchase state of the art BI systems with a high amount of expenditures. Instead, they should pay attention to the nature of use considering it as a very important determinant of the BI use and reconcile the nature of the use with the intended organizational benefits. Second, the mediation role of the BI use supports the notion that managers should carefully opt for both high system quality and information quality of the installed BI systems. This raises trust in BI and prevents managers from reverting to intuitive decision-making and the underuse of BI.

The influence of entrepreneurs' mental models on organizational absorptive capacity: a multilevel perspective

Purpose: Entrepreneurs have cognitive styles that directly determine organizational behavior. When building their mental models, the entrepreneur uses both individual and collective capacities, which, in turn, mediate the performance of an organization, configuring themselves in a multilevel perspective. This article aims to analyze the effect of entrepreneurs' mental models on absorptive capacity in incubated companies. Design/methodology/approach: This article is based on descriptive research with a quantitative approach to the data. A closed questionnaire was applied to 132 incubated companies belonging to the Consortium of Community Universities of Rio Grande do Sul (Consórcio de Universidades Comunitárias do Rio Grande do Sul - Comung) and Santa Catarina Association of Educational Foundations (Associação Catarinense das Fundações Educacionais - Acafe). The statistical treatment used to analyze the relationships investigated in this research comprised descriptive statistical analysis and Modeling by Structural Equations (SEM), with the help of SPSS® version 2.2 and SmartPLS® version 3.2.8 software. Findings: The results showed a positive relationship between the cognitive variables of the entrepreneurs' mental models in the organizational Absorptive Capacity (ACAP). It is possible to infer that these are significant predictors of the development of organizational ACAP in the companies that make up this sample. This study presents a set of mental models' cognitive variables related to organizational ACAP. Originality/value: We suggest a qualitative approach that can deepen the observations regarding the relationships investigated in this study. Such an approach would help understand how the relationship between the cognitive variables of the mental models of entrepreneurs in organizational ACAP occurs.

BUILDING A CONCEPTUAL MODEL FOR INTERNAL AUDITING: THE PERSPECTIVE OF ABSORPTIVE CAPACITY THEORY

The purpose of this paper is to present a conceptual model for internal auditing based on absorptive capacity theory. Internal auditing effectiveness is influenced by an organization's capacity to identify, assimilate, and apply new knowledge, according to the model. It has been determined that absorptive capacity is positively associated with innovation, performance, and competitiveness, making it a central concept in the literature of organisational learning. This study contends that internal audit functions contribute significantly to an organization's absorptive capacity by providing valuable knowledge, expertise, and perspective on internal control systems, risk management, and governance. An organisation can identify and learn from internal and external knowledge sources, including best practises, regulations, and industry developments, if its internal audit function is proactive and provides value-added services. In addition, a well-aligned internal audit function with the strategic objectives and culture of the organisation can facilitate the assimilation and application of new knowledge. The model suggests that internal audit functions can be improved by employing a risk-based approach that focuses on the organization's most significant risks and opportunities. This strategy can assist internal auditors in identifying and prioritising areas where new knowledge is required and in delivering more targeted and pertinent services. In addition, the model proposes that internal audit functions can be improved by leveraging digital technologies, such as data analytics and information technology, which can assist internal auditors in accessing and processing large quantities of data and delivering more efficient and effective services. This paper emphasises the significance of absorptive capacity for internal auditing effectiveness and provides a conceptual model that can guide the development of proactive and value-added internal audit functions. Practitioners, researchers, and policymakers interested in enhancing the performance and competitiveness of organisations through internal auditing may find the proposed model valuable.

Data-driven innovation development: an empirical analysis of the antecedents using PLS-SEM and fsQCA

AbstractData-driven innovation (DDI) is a primary source of competitive advantage for firms and is a contemporary research priority. However, what facilitates the development of DDI has largely been understudied in literature. Through a systematic literature review, this study finds technological, organizational, and environmental variables under the TOE framework, which would drive effective DDI development. We thus develop a research model, which is tested using survey data from 264 Australian firms engaged in DDI development. The data have been analysed using both symmetric (partial least squares based structural equation modelling (PLS-SEM)) and asymmetric (fuzzy-set qualitative comparative analysis (fsQCA)) methods. The mixed method enhances the confidence in our empirical analyses of the antecedent variables of DDI development. PLS-SEM has revealed that technological readiness (i.e., data quality and metadata quality), and organizational absorptive capacity and readiness (i.e., technology-oriented leadership and availability of IT skilled professionals) affect DDI development. Our fsQCA results complement and extend the findings of PSL-SEM analysis. It reveals that quality of data and metadata, technology-oriented leadership, and exploitation capacity individually are necessary—but are not sufficient—conditions for high DDI development. Further, it identifies three different solutions each for small, medium, and large firms by combining the TOE factors. Additionally, this study suggests that the TOE framework is more applicable to small firms, on DDI context. Findings of our study have been related with theoretical and practical implications.

Multi-level antecedents of public sector innovation? An ethnography of a large UK postal services organization

Abstract This paper examines professional and organizational-level antecedents of public sector innovation using findings from a 9-month ethnography conducted within the marketing department of a large UK postal organization. The analysis centres on vignettes of two cross-functional projects to develop product and service innovations that involved external design agencies. The data are based on observation of the marketing teams, semi-structured interviews, and documentary analysis. The study highlights that social practices characteristic of communities of practice are antecedent to the generation of absorptive capacity, but also shows that the learning produced by communities of practice is mediated by relations of power associated with these groups and interaction with organizational absorptive capacity. This paper develops the theory of absorptive capacity by shifting attention away from ‘prior knowledge’ in enabling acquisition of external knowledge to highlighting the role of intensive interaction, organizational context, and power relations in shaping knowledge creation for learning and innovation.

A Design Framework for Novice Using Grounded Theory Methodology and Coding in Qualitative Research: Organisational Absorptive Capacity and Knowledge Management

Grounded theory methodology (GTM) is an extensive research methodology that is immensely active in numerous social science research fields. It is by far one of the most popular techniques applied in qualitative research. The challenge in using such methods might appear in their complexity. Several steps of coding and analysis in GTM can be fuzzy and multifaceted for novice researchers specialised in Information Systems (IS) fields, knowledge management, and broad applications of IS. The current study suggests a design framework for novices in qualitative research that presents GTM as a set of techniques characterised graphically, allowing the extraction of grounded results and a set of pragmatic analysed data classifications rather than only concentrating on implementing a grounded “theory”. Hence, the research stresses using the term “grounded techniques”, permitting the creation of grounded categories to strengthen qualitative research results' rigour. The proposed framework meticulously exemplifies how an organised set of phases in a research design can enlighten the novice researcher while conducting a study in knowledge absorptive capacity using a comprehensive GTM process to enforce the understanding of GTM techniques.

A Study on Relationship Between Organizational Absorptive Capacity, Information Source Diversity and SME’s Innovation Performance

본 연구는 중소기업 혁신성과에 대한 선행요인을 조직학습 이론 및 사회연결망 이론적 관점을 바탕에 두고 발견하는 것에 초점을 맞추었다. 환경변화에 빠르게 적응하는 역동적 능력으로서 조직학습 이론적 관점에서 흡수능력을 혁신성과에 대한 강력한 선행요인으로서 주장한다. 또한 정보원천 다양성이라는 요인의 중소기업 혁신성과에 대한 단독적인 효과를 사회연결망 이론적 관점에서 제시한다. 마지막으로 두 변수의 상호작용 효과는 각 변수의 단독적 효과보다 중소기업 혁신성과에 더욱 강력한 정의 영향을 미칠 것으로 예측했다. 따라서 이러한 연구가설을 2018년에 수집된 대한민국 제조업 혁신조사 자료를 통해 검증했다. 본 연구에서 예측된 연구가설은 실증분석을 통해 모두 채택된 결과를 보였다. 마지막 장에 본 연구에 대한 이론적 및 실무적 의의, 연구의 한계점과 미래연구 방향을 포함하였다.The current study focuses on finding the preceding factors of innovation performance of SMEs based on organizational learning and social networks theoretical perspectives. As a dynamic ability to adapt quickly to environmental changes, absorptive capacity is argued as a strong factor for innovation performance from the theoretical perspective of organizational learning. In addition, the direct effect of information source diversity on the innovation performance of SMEs is presented from the theoretical point of view of social networks. Finally, the interaction effect of the two variables is expected to have a stronger positive effect on the innovation performance of SMEs than the single effect of each variable. Therefore, these research hypotheses were verified through the data of the Korea Manufacturing Innovation Survey collected in 2018. The predicted research hypotheses were adopted through empirical analysis. Then the last chapter includes theoretical and practical implications of this study, limitations of this study, and future research direction.

The Co-construct/ Co-evolving Process between Organization’s Absorptive Capacity and Enterprise System Practice under Changing Context: The Case of ERP Practice

Long term sustainability in a competitive and changing environment requires an organization to continuously learn and adapt. The ability to access and use new knowledge is contingent on the organisational absorptive capacity (AC). In this paper, we focus on how an organization’s absorptive capacity and its enterprise system practices develop and co-evolve over time. Analysing a fifteen years’ ERP practice in an organisational context, this study synthesizes a new AC analysis framework that takes into account the dynamic nature of AC. This high-level analysis coupled with a longitudinal view resolves inconsistent results between current AC studies and suggest further directions for organisational AC research.

Empowering knowledge-based interaction in digital startup

Digital startups are growing fast around the world, but new digital startups that are less than three years old or did not materialize when it came to funding while the business model is quite promising. Various literature shows that digital transformational leadership can encourage knowledge sharing and an organization's absorptive capacity to improve performance. This research investigates whether digital transformational leadership and empowering knowledge-based interaction, as well as the power of absorptive capacity, will be able to maintain digital startup sustainability through the improvement of performance. 144 digital startups that are established in a limited corporation and registered in the Baparekraf (Indonesia Tourism and Creative Economy Agencies) were used as the purposive sampling. Data collection was done through online questionnaires from each startup leader and processed with SmartPLS 3.0. The results of the research findings showed that the higher the degree of digital transformational leadership, the higher the degree of the digital performance of startups that include traction and financial performance, and also increased empowering knowledge-based interaction in the form of encouraging goal-oriented participative involvement, intra-team knowledge exchange, and continuous interactive engagement. Empowering knowledge-based interaction develops an absorption capacity process to produce the performance of digital startup organizations.

Organizational Adaptability Influenced by Practice Strategy, Environmental Dynamism, and Absorptive Capacity

The adaptability of organizations to their environment has always been a key concern in both organizational theory and management practice. Different from the single perspective of previous studies, this research adopts an integrated, outside-in perspective. Employing an agent-based simulation model (ASM) and a multiple regression model (MRM), we examine the impact of the intensity of exploitative and exploratory practice on organizational adaptability, as well as the moderating effect of environmental dynamism and organizational absorptive capacity. The results of the research show that (1) the stable environment prefers organizations with a practice strategy of high exploitation and low exploration; (2) environmental dynamism inhibits the impact of both exploitative and exploratory practices on organizational adaptability; and (3) organizational absorptive capacity significantly reinforces the link between the intensity of exploitative practice, as well as exploratory practice, and organizational adaptability. The study investigates the external alignment of organizational exploratory and exploitative practices with environmental dynamism and internal fit with absorptive capacity. The findings provide new insight into the question of how organizations can resist the erosion of environmental dynamism through strategic alignment and capacity development.

Leveraging business intelligence systems to enhance management control and business process performance in the public sector

PurposeRecent research and policy reports indicate public sector organizations struggle to leverage information technology-based performance measurement systems and fail to effectively evaluate performance beyond financial metrics. This study aims to focus on organizational factors that influence the assimilation of business intelligence (BI) systems into integrated management control systems and the corollary impact on improving business process performance within public sector organizations.Design/methodology/approachThe complete Australian client list was acquired from a leading BI vendor; and the authors surveyed all public sector organizations, receiving 226 individual responses representing 160 public sector organizations in Australia. Using latent construct measurement, structural equation modeling (SEM)-partial least squares is used to test the theoretical model.FindingsWhen top management promotes knowledge creation among the organization’s operational level employees and support their activities with strong BI infrastructure, the same knowledge and infrastructure capabilities that are critical to assimilation in private sector hold in the public sector. However, public sector organizations generally have difficulty retaining staff with expertise in new technologies and attracting new innovative staff that can leverage smart systems to effect major change in performance measurement. When top management effectively manages knowledge importation from external entities to counteract deficiencies, public sector organizations effectively assimilate BI knowledge into performance measurement yielding strong process performance.Research limitations/implicationsWhen top management promotes knowledge creation among the organization’s operational level employees and support their activities with strong BI infrastructure, the same knowledge and infrastructure capabilities critical to assimilation in the private sector hold in the public sector. However, public sector organizations generally have difficulty retaining staff with expertise in new technologies and attracting new innovative staff that can leverage smart systems to effect major change in performance measurement. The research extends the theory behind organizational absorptive capacity by highlighting how knowledge importation can be used as an external source facilitating internal knowledge creation. This collaborative knowledge creation leads to affective assimilation of BI technologies and associated performance gains.Practical implicationsThe results provide guidance to public sector organizations that struggle to measure and validate service outcomes under New Public Management regulations and mandates.Originality/valueThe results reveal that consistent with the philosophies behind New Public Management strategies, private sector measures for increasing organizational absorptive capacity can be applied in the public sector. However, knowledge importation appears to be a major catalyst in the public sector where the resources to retain skilled professionals with an ability to leverage contemporary technologies into service performance are often very limited. Top management team knowledge and skills are critical to effectively leveraging these internal and external knowledge creation mechanisms.

Individuals and Absorptive Capacity: A Supervenient Model

Despite the centrality of individuals in the discussion of absorptive capacity, limited attention has been paid to how organizations’ absorptive capacity depends on that of individuals. To fill this void, we use supervenience—a concept borrowed from philosophy—and research on individual cognition to conceptualize the role of individuals in organizational absorptive capacity. In particular, we employ supervenience to explain how organizations absorb new knowledge through individual interactions. The model provides new insights into how individual-level cognition explains variance in absorptive capacity across organizations. Our approach helps to expand future empirical research in the field.

Rapid internationalization and exit of exporters: The role of digital platforms

Digital platforms have been developing fast which transform the benefits and costs of rapid internationalization of firms on them. Employing transaction cost economics perspective, we argue that the transaction attributes of asset specificity, transaction uncertainty, and transaction frequency, have all changed fundamentally in digital platform-based transactions. They render the organizational learning in rapid Internet exporting to counterbalance the diseconomies of time compression caused by the lack of organizational absorptive capacity. By using the three attributes as underlying mechanisms, we hypothesize that the expansion speed of exporters on digital platforms reduces exit hazards of the exporters. We further hypothesize that digital signals on product quality strengthen the main effect. As for digital infrastructure, we recognize its competing effects and make curvilinear moderating hypotheses. Survival analyses based on 353,636 entries of real transaction records from a digital exporting platform have provided robust findings. This study highlights the importance of examining how the digital platform reshapes the transaction attributes and internationalization-performance relationship.

The Effects of Organizational Absorptive Capacity, Professional Experience and Training over the Use of Sales Force Automation

This research brings out the impact of training and professional experience on organizational absorptive capacity and the use of Sales Force Automation (SFA). A quantitative study was conducted on a sample of 186 medical sales representatives who work in the pharmaceutical industry. The method of structural equations based on the PLS approach and linear regression have been deployed for data analysis. The results reveal a positive impact of the training over organizational absorptive capacity (potential absorptive capacity and realized absorptive capacity) and the use of SFA as well as a positive impact of professional experience on organizational absorptive capacity. Furthermore, the organizational absorptive capacity has a positive influence on the use of the SFA. This study contributes to the literature on SFA use by examining the role of training, professional experience, realized and potential absorptive capacities in the SFA use. This research is appropriate for managers of pharmaceutical companies who constantly seek to improve the use of SFA technologies. Thus, the staff of these companies is more likely to perform their duties in a way that promotes their realized and potential absorptive capacities and the best use of SFA through continuous training for inexperienced and experienced salespeople.

조직문화, 흡수역량, 혁신행동을 통한 직업훈련기관 인증제도가 경영성과에 미치는 영향

본 연구에서는 직업훈련의 운영 자격을 검증하기 위하여 시행되고 있는 직업훈련기관 인증제도가 훈련기관 경영성과에 미치는 영향을 분석하였다. 이를 위하여 조직문화, 흡수역량, 혁신행동의 매개효과를 이용하였다. 이러한 연구는 직업훈련기관 인증제도가 훈련기관의 경영성과에 미치는 영향을 검증해볼 수 있는 기회가 될 것으로 판단된다.<BR>연구결과 첫째, 직업훈련기관 인증제도는 조직문화, 흡수역량, 혁신행동에 유의한 영향을 미치는 것으로 확인되었다. 둘째, 조직문화, 혁신행동은 경영성과에 유의한 영향을 미치나, 흡수역량은 경영성과에 유의적인 영향을 미치지 않았다. 셋째, 직업훈련기관 인증제도는 조직문화, 흡수역량, 혁신행동을 매개로 경영성과에 유의한 영향을 미치는 것으로 확인되었다. 결과적으로, 매개효과를 통하여 인증제도는 훈련기관 경영성과에 영향을 미칠 수 있다고 판단된다.

The effect of organisational absorptive capacity on business intelligence systems efficiency and organisational efficiency

PurposeBusiness intelligence (BI) systems (i.e. technology and procedures that transform raw data into useful information for managers to enable them to make better and faster decisions) have enormous potential to improve organisational efficiency. However, given the high expenditure involved in the deployment of these systems, the factors that will enable their successful integration should be thoroughly considered and assessed before these systems are adopted. Absorptive capacity (ACAP) is the ability of organisations to gather, absorb and strategically influence new external information, and as such, there is a strong theoretical connection between ACAP and BI systems. This research aims to empirically investigate the relationship between the dimensions underpinning ACAP (i.e. acquisition, assimilation, transformation and exploitation) and whether and how they affect the efficiency of BI systems, which, in turn, can enhance organisational efficiency.Design/methodology/approachThis study formulates five hypotheses addressing the effect of ACAP dimensions on BI systems efficiency and the effect of BI systems efficiency on organisational efficiency. It synthesises previous qualitative work and current research to derive sets of measures for each of the key constructs of the study. It follows a quantitative methodology, which involves the collection of survey data from senior managers in the telecommunications industry and the analysis of the data using partial least squares – structural equation modelling (PLS-SEM).FindingsThe results of the analysis confirmed the validity of the constructs and proposed measures and supported all five hypotheses suggesting a strong positive relationship between the ACAP dimensions, acquisition, assimilation, transformation and exploitation and the efficiency of BI systems and a strong effect of BI systems efficiency on organisational efficiency.Practical implicationsThe study offers a comprehensive model of ACAP and BI systems efficiency. The set of measures that underpin these constructs could help researchers understand how ACAP dimensions are practically implemented and could contribute to their efforts to develop ACAP measurement instruments. At the same time, the model can help managers assess the readiness of their firms to adopt BI systems and identify which areas should be further developed, before committing to the substantial financial investment associated with BI systems. It also provides a set of practical solutions that could be implemented to enable a more robust ACAP and support a better integration of BI systems.Originality/valueFollowing an empirical approach, this study refines one’s theoretical and practical understanding of ACAP as an organisational dynamic capability and its dimensions; it provides an account on how each dimension affects different aspects of BI systems efficiency, which, in turn, may contribute to the improvement of organisational efficiency. Moreover, the study reframes ACAP measures as a set of requirements that can be practically assessed and followed before attempting to purchase BI systems.