In this paper, we argue that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities. We label this capability a firm's absorptive capacity and suggest that it is largely a function of the firm's level of prior related knowledge. The discussion focuses first on the cognitive basis for an individual's absorptive capacity including, in particular, prior related knowledge and diversity of background. We then characterize the factors that influence absorptive capacity at the organizational level, how an organization's absorptive capacity differs from that of its individual members, and the role of diversity of expertise within an organization. We argue that the development of absorptive capacity, and, in turn, innovative performance are history- or path-dependent and argue how lack of investment in an area of expertise early on may foreclose the future development of a technical capability in that area. We formulate a model of firm investment in research and development (R&D), in which R&D contributes to a firm's absorptive capacity, and test predictions relating a firm's investment in R&D to the knowledge underlying technical change within an industry. Discussion focuses on the implications of absorptive capacity for the analysis of other related innovative activities, including basic research, the adoption and diffusion of innovations, and decisions to participate in cooperative R&D ventures. **

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Absorptive capacity: a new perspective on learning and innovation

Theorists in various fields have discussed characteristics of top managers. This paper attempts to synthesize these previously fragmented literatures around a more general “upper echelons perspective.” The theory states that organizational outcomes—strategic choices and performance levels—are partially predicted by managerial background characteristics. Propositions and methodological suggestions are included.

Upper Echelons: The Organization as a Reflection of Its Top Managers

Research into Leader-Member Exchange (LMX) theory has been gaining momentum in recent years, with a multitude of studies investigating many aspects of LMX in organizations. Theoretical development in this area also has undergone many refinements, and the current theory is far different from the early Vertical Dyad Linkage (VDL) work. This article uses a levels perspective to trace the development of LMX through four evolutionary stages of theorizing and investigation up to the present. The article also uses a domains perspective to develop a new taxonomy of approaches to leadership, and LMX is discussed within this taxonomy as a relationship-based approach to leadership. Common questions and issues concerning LMX are addressed, and directions for future research are provided.

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Relationship-based approach to leadership: Development of leader-member exchange (LMX) theory of leadership over 25 years: Applying a multi-level multi-domain perspective

Organizational Citizenship Behaviors: A Critical Review of the Theoretical and Empirical Literature and Suggestions for Future Research

This study examined the relationship between perceptions of fairness and organizational citizenship (extrarole) behaviors in a sample drawn from two firms in the midwestern United States. A theoretical basis for a relationship between fairness and citizenship was drawn from equity theory and other theories of social exchange. Structural equation analysis with LISREL7 found support for four hypotheses, including support for a relationship between perceptions of procedural justice and four of five citizenship dimensions.

Frederick Glen

Papers

Social Psychology of Organizations