Multilevel absorptive capacity and radical innovation

The purpose of this study is to explore organizational learning, using the lens of absorptive capacity, as a multi-level phenomenon spanning individual, group, and organizational levels of analysis. In the first chapter we explore how characteristics of individual employees interact with group and organizational level communication processes in order to better understand how knowledge collected by individuals from the environment becomes knowledge which the organization can apply to their operations. We expand on the existing literature by hypothesizing that why individuals choose to learn affects what they learn, which in turn affects the firm's ability to engage in radical innovation and entrepreneurial behaviors. In the second chapter we narrow our focus. There we look at how characteristics of one particular group of organizational members, the top executives, influence one component part of the innovation process, the generation of radical new ideas. Finally in the third chapter we examine how top executive characteristics affect an organization's ability to turn those radical new ideas into potentially valuable new products. We find that while executives seem to exert little or no influence on the kinds of new ideas spawned by the firm, they have a strong influence over the likelihood that new ideas will be turned into new products. Most interestingly, we find a strong technological contingency that determines the extent to which executives matter. When a firm has a stock of incremental new ideas which largely build on prior art, executives bear little influence. However when a firm's portfolio of new ideas is more radical, executives strongly influence the efficiency with which those ideas can be turned into new products.