Effects of Absorptive Capacity on Organizational Predisposition Toward Information Systems

This paper draws on the theory of absorptive capacity and related work to identify its dimensions and examine its impact on organizational propensity to adopt novel, complex interorganizational technologies. Specifically, it seeks to examine the causal pathway through which absorptive capacity affects organizational adoption intention. Survey-based research was carried out to test this theory. Data was collected from the CEO, the CFO, and the CIO to measure the level of absorptive capacity and its dimensions, and their intentions to adopt financial electronic data interchange (FEDI). A firm-level structural model was developed. LISREL and PLS were used for testing the measurement and structural models respectively. The results indicate that absorptive capacity’s relationship with adoption intention is mediated by decision-makers’ attitudes toward using FEDI. Preexisting related knowledge and aggressiveness of technology policy contribute significantly to absorptive capacity’s impact on adoption intention. Implications for theory and practice are discussed.