The Effects of Absorptive Capacity and Decision Speed on Organizational Innovation: A Study of Organizational Structure as an Antecedent Variable

Abstract

Following the dimensions of organizational structure and organizational innovation, this paper aims to discuss how organizational structure affects organizational absorptive capacity and decision speed, and subsequently influences organizational innovation. Based on the sample of 260 enterprises with 1282 valid questionnaires, the empirical method, using the Structural Equations Model showed the following. (1) The higher the degree of organizational formalization, the stronger the absorptive capacity of the organization, and then the higher the degree of organizational innovation. (2) The higher the degree of organizational centralization, the lower the absorptive capacity of the organization, and then the lower the degree of organizational innovation. (3) The higher the degree of organizational formalization, the slower the organizational decision speed, and then the slower that degree of organizational innovation. (4) The degree of organizational centralization is irrelative to absorptive capacity and decision speed; and therefore organizational innovation speed is not affected. Keywords: Organizational Structure, Absorption Capacity, Decision Speed, Organizational Innovation

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