Absorptive Capacity and Innovation Outcomes in Teams: The Role of CEO Servant Leadership and TMT Information Exchange Frequency on Team Social Integration, Task Conflict and Knowledge Breadth

Abstract

Although benefits of absorptive capacity for new product development have been widely acknowledged, scholars have largely ignored potential costs and challenges involved. We develop a model that examines whether the interplay between a team’s potential (PACAP) and realized absorptive capacity (RACAP) relates to task conflict and knowledge breadth, which in turn lead to radical and incremental innovation outcomes. We further suggest that two key organizational-level characteristics (i.e., CEO servant leadership and TMT information exchange frequency) may foster team-level social integration which, in turn, differentially shapes the effects of task conflict and knowledge breadth on the team’s innovation outcomes. Through the multilevel nature of our study, we aim to demonstrate the benefits and risks that NPD teams are confronted with when leveraging absorptive capacity components for innovation purposes and the contingency role of CEO and board characteristics in shaping team outcomes.

Keywords: absorptive capacity; innovation; teams; CEO servant leadership; TMT Information Exchange Frequency; Social Integration; Task Conflict; Knowledge Breadth

JEL Classification: M10; L21; L23; M14