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A question of (mis)alignment: innovation mandates and absorptive capacity routines
Author(s) -
Banerjee Aneesh,
Lampel Joseph,
Bhalla Ajay
Publication year - 2020
Publication title -
randd management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.253
H-Index - 102
eISSN - 1467-9310
pISSN - 0033-6807
DOI - 10.1111/radm.12393
Subject(s) - absorptive capacity , subsidiary , mandate , exploit , business , industrial organization , knowledge management , computer science , political science , multinational corporation , finance , computer security , law
Research suggests that effective R&D requires the right combination of inward‐looking and outward‐looking absorptive capacity routines. However, we do not have an adequate understanding of how these routines influence innovative output in R&D units with different mandates. In this paper, we argue that adopting an absorptive capacity routine would positively or negatively influence the R&D subsidiary’s innovative output, depending on whether the routine is aligned or misaligned with the subsidiary’s innovation mandate to ‘exploit’ existing knowledge or ‘explore’ new knowledge. We test this using data collected from a global packaged‐software firm with 14 international R&D subsidiaries that implemented six major absorptive capacity routines in the period 2000–2010. Our research provides new insights for both scholars and practitioners in R&D management, by showing that balancing of absorptive capacity routines should be considered in light of innovation mandates of subsidiaries as well as the firm. Our analysis also provides insights on why decision makers may still adopt misaligned routines.