Innovating via building absorptive capacity: Interactive effects of top management support of learning, employee learning orientation and decentralization structure

Abstract

Building on the organizational learning perspective, the study examines the effect of learning‐related personal and contextual factors on organizational absorptive capability (AC) and subsequent innovative performance, as well as how a decentralized organizational decision‐making structure may moderate these relationships. Using data collected from 112 manufacturing firms, we found a positive effect of top management support of learning and employee learning orientation on AC and subsequent firm innovative performance. Further, we found that decentralization moderated the effect of top management support of learning on innovative performance via AC such that the indirect effect was significant only when decentralization was higher. However, we did not find that the indirect effect of employee learning orientation on innovative performance via AC varied significantly as a function of decentralization structure. This study extends the AC literature by highlighting the importance of managerial learning‐supportive practices and employee learning orientation, and by revealing how decentralization structure facilitates the organization and employees to translate the learning support and learning motivation to AC and innovation.