Absorptive capacity and incentives

Abstract

The absorptive capacity of an organization is one of the central elements of innovation and knowledge management. Over the past years it has strongly gained importance in the conceptual and empirical literature. But there are still boundaries and details that are not yet included in the model: the discussion about the objectives of absorptive capacity is usually confined to effectiveness objectives and for the coordination of absorptive capacity authors focus on organizational mechanisms overlooking the motivation of the employees. This paper wants to answer the question whether an incentive system yields a successfully regulation of absorptive capacity. We therefore review the concept of absorptive capacity, its different interpretations in business research, its enhancement and points of criticism and derive four objectives conceptually. For the empirical analysis we include the dimension of incentives and investigate its implications on the objectives of absorptive capacity. © Jana Oehmichen, Marcus Schuster, Michael Wolff, 2008.