The relation between leadership, organisational structure and absorptive capacity

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Recent research suggests that due to the fast-changing market, the absorptive capacity of an organization is constantly provoked. Changes outside an organisation provide new information which should be recognized, assimilated and applicated by an organisation. The absorptive capacity is inter alia linked to competitive advantage, innovation and business performance. Although much research is conducted on the effects of absorptive capacity, research on how to foster and stimulate absorptive capacity is scarce. This study aims to narrow this scientific gap by examining the role of managerial and organisational antecedents on absorptive capacitu. In this study, transformational leadership, transactional leadership, centralization and formalization are regarded as potential antecedents. Also, the effects of centralization and formalization on the relation between the type of leadership and absorptive capacity is investigated. Based on data from 111 top management members from organisations which were using cloud computing systems, this study analysed how the absorptive capacity is affected. The results reveal that transformational leadership is positively related to the recognition of knowledge and that formalization is positively related to the assimilation of knowledge. Further, formalization negatively moderates the relationship between transactional leadership and assimilation of knowledge. Overall, this study’s findings help managers to better understand the concept of absorptive capacity and how to stimulate absorptive capacity in an organisation. Keywords: Absorptive capacity, transformational leadership, transactional leadership, centralization, formalization.
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