Exploring the impact of top management teams on organizational absorptive capacity

ABSTRACT Both organizational absorptive capacity (ACAP) and top management team (TMT) characteristics have long research traditions. While the two streams of research are clearly linked, they have developed along separate lines. Building on upper echelons theory, we integrate these research streams by investigating how TMT socio-cognitive and socio-political characteristics influence organizations’ ACAP, a dynamic capability that allows organizations to manage change through the acquisition and utilization of new knowledge. Specifically, we explore how TMT size, tenure, and heterogeneity, as antecedents of TMT cognitive characteristics, influence each of the ACAP sub-processes – knowledge recognition, acquisition, assimilation/transformation, and utilization. Furthermore, we explore TMT power base and TMT social capital as boundary conditions impacting the transitions between knowledge recognition and acquisition and knowledge assimilation/transformation and utilization. Our theoretical framework contributes to research on knowledge management by offering a new understanding of a relatively overlooked mechanism through which external knowledge is acquired and applied to create a competitive advantage.