The Moderating Role of Positive Affective Tone in the Relationship between Organizational
Structure and Absorptive Capacity
Master Thesis
Student: Lisa Kleintjens (10579974)
MSc. Business Administration, Strategy track
University of Amsterdam, Faculty of Economics and Business
Supervisor: Andreas Alexiou, PhD
University of Amsterdam, Amsterdam Business School
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Statement of Originality
This document is written by student Lisa Kleintjens who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document are original and that no sources other than those mentioned in the text and its references have been used in creating it.
The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
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Table of contents
1. Abstract 4
2. Introduction 5
3. Variables and theoretical model 10
2.1. Organizational structure 11
2.1.1 Formalization 11
2.1.2 Centralization 13
2.2. Positive affective tone 15
2.3 Absorptive capacity 18 2.4 Theoretical model 19 4. Research method 21 3.1 Data collection 21 3.2 Measures 22 5. Results 25
4.1 Organizational structure and absorptive capacity 27
4.2 Positive affective tone as a moderator 27
6. Discussion 36
5.1 Theoretical contributions 36
5.2 Managerial contributions 37
5.3 Limitations and directions for future research 38
7. Conclusion 42
8. References 43
9. Appendixes 53
8.1 Appendix 1: Variable items and scales 53
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Abstract
Absorptive capacity is considered to be a crucial determinant of an organization’s ability to cope with disruptive technological changes. Most current literature about absorptive capacity
focuses on its structural underpinnings, but little attention has been paid to its psychological
underpinnings. This study integrates structural and psychological underpinnings of absorptive
capacity by examining the moderating effect of positive affective tone on the relationship
between organizational structure and absorptive capacity. In this context structure entails the
degree of formalization and centralization, and absorptive capacity entails the ability to
recognize, assimilate and apply new knowledge. The research was conducted in the light of
technology adoption by analyzing a recent dataset of 110 small- and medium-sized firms
adopting Cloud technology. Findings suggest that positive affective tone positively
moderates the relationship between centralization and the assimilation dimension of
absorptive capacity. Moreover, this study found organizational structure to be specifically
related to the assimilation dimension of absorptive capacity, and therefore it argues that is
crucial to make a distinction between the separate dimensions of this multi-construct. The
findings of this study contribute not only to our understanding of the implications of
organizational structure on an organization’s absorptive capacity, but also to our
understanding of collective emotions as one of its psychological underpinnings.
key words: absorptive capacity, formalization, centralization, positive affective tone,
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1. Introduction
The field of strategic management contains a wide variety of literature about inter-firm
performance heterogeneity and factors underlying this performance heterogeneity. One
important factor explaining inter-firm performance heterogeneity is a firm’s ability to deal
with technological changes. Technological changes have severe implications on individual
firms as well as on markets and complete industries due to their disruptive potential
(Christensen, 1997). The process of creative destruction describes how technological
innovation can make existing technologies, assets, labor, and intellectual capital obsolete,
forcing firms to keep up with technological change in order to create or preserve their
competitive advantage (Schumpeter, 1934). Therefore, especially in dynamic environments, a
firm’s ability to replace obsolete technologies and successfully manage the adoption of new technologies is crucial to its survival and competitive advantage.
Technological innovation is highly related to knowledge, because knowledge and
innovation are intertwined and there is no clear distinction between these two concepts (Ali &
Park, 2016; Lundvall, 2006; Nataraajan, 2016). In order to be able to adapt to technological
changes in the environment and to adopt new technologies, a firm is highly dependent upon
its ability to absorb knowledge from external sources, also known as its absorptive capacity
(Apriliyanti & Alon, 2017; Ben-Oz & Greve, 2015; Cohen & Levinthal, 1990; Grant, 1996;
Lane, Koka, & Pathak, 2006; Zahra & George, 2002). Despite the fact that absorptive
capacity is a popular and dominant concept in the management literature, a full body of
research on its antecedents on multiple organizational levels, their interconnections, and
factors influencing these antecedents is still lacking (Distel, 2017; Martinkenaite & Breuning,
2016; Roberts, 2015). More specifically, the underlying mechanisms influencing the
relationship between organizational structure and absorptive capacity still lack nuance and
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Volberda, 2006; Tortoriello, 2015; Volberda, Foss & Lyles 2010). Therefore, this study
investigates the relationship between two main determinants of organizational structure
(formalization and centralization) and absorptive capacity in the light of the adoption of new
technologies.
The relationship between organizational structure and absorptive capacity has been
investigated in prior literature, but the literature suffers several shortcomings. There are
contradictory findings about the influence of both formalization and centralization on
absorptive capacity. Whereas one body of literature finds negative effects of formalization
and centralization on absorptive capacity, the other finds positive effects (Chen & Chang,
2012; Damanpour, 1991; De Araújo, 2010; Pihlajamaa, 2018). These contradictory findings
point towards underlying mechanisms influencing the relationship between organizational
structure and absorptive capacity. In order to create a clear image of these underlying
mechanisms, it is necessary to provide a better nuance in describing the relationship between
organizational structure and absorptive capacity with an eye on other variables potentially
influencing it. The majority of prior literature neglected the role of emotions in shaping
organizational phenomena when investigating absorptive capacity. According to Cohen’s and Levinthal’s original logic of learning and absorptive capacity, a firm’s absorptive capacity depends highly on the cognitions and behaviors of its individual members (Cohen &
Levinthal, 1990). Since the cognitions and behaviors of individuals have found to be highly
influenced by emotions (Forgas, 1995; Nooteboom, Haverbeke, Duysters, Gisling, & van den
Oord, 2007; Siachou & Gkorezis, 2014), overlooking the impact of emotions in describing
organizational phenomena would result in an incomplete picture of these phenomena and
their relations to absorptive capacity. Therefore, more focus on and a better understanding of
the role of emotions in shaping organizational phenomena is required. This study
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structure and absorptive capacity, and how emotions shape this relationship, an area that has
yet received too little attention.
Prior literature has linked the role of emotions to a wide variety of concepts, including
organizational learning (Argyris, 1990; Kang, Morris & Snell., 2007; Schipton & Sillince,
2012; Scherer & Tran, 2003). However, most of these studies take emotions at the individual
level as their focal point, linking them to the individual level of organizations (the micro
level), but not linking them to the group level (meso level) or the structural level (the
organizational level). Also, the role of emotions on the whole construct of absorptive capacity
has largely been ignored. Since prior literature has neglected the role of emotions on
absorptive capacity, it is still lacking understanding its psychological underpinnings (Siachou
& Gkorezis, 2014). Prior research has shown a positive relationship between positive
emotions, creativity, motivation, learning and performance (Abe, 2011; Scherer & Tran,
2003; Tsai, Ma, Lin, Chiu, & Chen, 2014). Since emotions of people seem to be related to
organizational learning, and learning is a critical element of absorptive capacity, it can be
justified to suspect that emotions are psychological underpinnings of absorptive capacity. A
relatively new concept that could give insights in the matter of emotions as the psychological
underpinnings of absorptive capacity is the concept of “affective tone”. “Affective tone is a set of consistent positive and negative feelings held in common across organizational
members” (George, 1990, p.108). The term has been used in literature about overarching affective characteristics and their influence on organizational processes (Barsade & Gibson,
2007; Barsade & Knight, 2015; George, 1996; Knight, Menges, and Bruch, 2017). Affective
tone is an interesting concept to investigate in the light absorptive capacity, because of two
main reasons. First of all, it helps to create insights in the influence of emotions on absorptive
capacity. Second of all, instead of taking an individual level perspective, it looks at collective
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level perspective. This enables researchers to investigate emotions on the meso level, a level
that has largely been neglected in management literature (Knight, Menges, & Bruch, 2017).
Taking a meso perspective helps to create new insights by integrating both macro and micro
processes of organizational emotions.
Summarizing, academic management literature points out that absorptive capacity is
essential for technology adoption, and organizational structure has proven to be an important
factor influencing absorptive capacity. Nevertheless there is unclarity about underlying
mechanisms influencing this structural relationship. The understanding of collective emotions
and their influence on the relationship between organizational structure and absorptive
capacity is still missing. Hence, there is a knowledge gap regarding the specific influence of
affective tone (collective emotions) on the relationship between organizational structure and
absorptive capacity. This study aims to address this gap by investigating the relationship
between organizational structure (in the form of formalization and centralization) and
absorptive capacity, and the moderating effect of positive affective tone on this relationship
for small- and medium sized firms. Besides creating more insights in the role of collective
emotions, this study also contributes to the literature about small- and medium-sized firms
and their capability to absorb new knowledge. Whereas the majority of studies in the area of
absorptive capacity has empirically analyzed large firms, this study focuses on small- and
medium-sized firms that highly depend on external sources for the acquisition of new
knowledge, and thus on their own ability to absorb knowledge from these external sources.
Small- and medium sized firms are a more attractive unit of analysis for affective tone,
because they are more likely to share an overarching affective tone than large firms (Knight
et al., 2017). The reason for this lies in the fact that large firms are often divided into multiple
business units that operate autonomously and separately from each other, which makes them
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firms, however, are more likely to operate as one unit, and therefore, they are more likely to
share collective emotions. Besides being theoretically relevant, the findings of this study also
have implications for managers, because they create insights in if and how managers need to
account for positive affective tone when implementing structures and adopting new
technologies.
The next sections of this study are structured as follows; Section two explains the
different variables, their theoretical background, the conceptual model, and the hypotheses
that are developed based on theory. Section three covers the research method, section four
covers the results, section five provides a discussion about this study’s contributions,
limitations and the directions for future research, and finally, chapter six covers the
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2. Variables & theoretical model
Based on the literature gap described in the previous section, the research question of this
study is:
“What is the moderating effect of positive affective tone on the relationship between organizational structure and absorptive capacity?’’
The main variables used in this study are: organizational structure, positive affective
tone, and absorptive capacity, with organizational structure and positive affective tone being
the independent variables and absorptive capacity being the dependent variable. Absorptive
capacity is assumed to be strongly positively linked to the successful adoption of new
technologies (Mayeh, Ramayah, & Mishra, 2016; Park, Suh, & Yang, 2007). The basic
premise of this study is that organizational structure, operationalized as the degree of
formalization and centralization, influences an organization’s absorptive capacity, as has been
proposed by many other studies (Ali, Ali, Al-maimani, & Park, 2017; Duchek, 2015;
Martinkenaite & Breuning, 2016). Moreover, this relationship is expected to be moderated by
an organization’s positive affective tone. Positive affective tone is expected to have a positive influence on this relationship, because collective positive emotions enhance organizational
processes as scope, creativity, knowledge sharing, and innovation implementation
effectiveness (Choi, Sung, Lee, & Cho, 2011; Frederickson & Barnigan, 2005; Tsai et al.,
2014). All these processes might lead to desirable capabilities which enhance absorptive
capacity.
Besides the main variables, this study also controls for the possible effects of firm age
and firm size. Since research suggests that absorptive capacity is built over time (Apriliyanti
& Alon, 2017; Valentim, Lisboa & Franco, 2015; ), firm age might influence results.
Moreover, firm size might inhibit a firm’s ability to create and exploit new knowledge (Nowak, 2017). Large firms may have more resources, yet less flexibility to acquire and
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assimilate new external knowledge (Jansen et al., 2005). Therefore, firms size might
influence results as well.
2.1 Organizational structure
By organizational structure, this study refers to the degree of formalization and centralization.
There is a wide variety of literature about formalization and centralization and their
relationships with absorptive capacity.
2.1.1 Formalization
Formalization refers to the degree to which a codified body of formal rules, standard policies,
procedures or behavior prescriptions is developed to govern decisions and work processing
(Pierce & Delbecq, 1977). Within the current literature there is disagreement about the effect
of formalization on absorptive capacity. There are arguments for both positive and negative
effects of formalization on absorptive capacity. The general argumentation behind the
negative effect on absorptive capacity can be summarized in four points. First, formalization
would tend to limit flexibility and informal relations with external partners, resulting in a
decrease in knowledge creation (de Araújo, 2010; Lee & Choi, 2003; Wang & Ahmed, 2003).
Second, formalization would limit the intensity and scope of the efforts expended in
knowledge acquisition, inhibit rich, reciprocal knowledge interaction, and hinder individual’s assimilation of new external knowledge (Jansen, van den Bosch, & Voldebra, 2005). Third,
formalization would inhibit employees from seeking new rules that might lead to awareness
of a performance gap between what employees think the firm should be doing and what the
firm is actually doing (Ali et al., 2017; Kim, 1980). Fourth, formalization would inhibit the
initiation stage of learning (Ali et al., 2017; Pierce & Delbecq, 1977). Empirical findings
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(Claver-Cortéz, Pertusa-Ortega, & Molina-Arozín, 2012; Goh & Richards, 1997; Pihlajamaa,
2018). However, there is also literature that found empirical evidence for the positive
relationship between formalization and absorptive capacity (Chen & Chang, 2012;
Damanpour, 1991; Duchek, 2015; Jansen et al, 2005). This stream of literature sees
formalization as a source of creation and use of knowledge (Kern, 2006). The argument
behind this is that formalization enables organizational memory of best practices by
increasing the efficiency of knowledge acquisition, making knowledge use more efficient
(Chen & Chang, 2012, Vega-Jurado, Gutiérezz,& Fernández-de-Lucio, 2008). Moreover,
formalization can reduce ambiguity, enhance transfer of explicit and codified knowledge, and
improve coordination (Van Den Bosch, Volberda, & de Boer, 1999). Scholars argue that the
effect of formalization on absorptive capacity is dependent on implementation, work design
and contextual factors (Jaques, 1990; Juillerat, 2010; Parker, 2003).
A recent research of Ali et al (2017) reviewed a large body of literature about
absorptive capacity of the past decades and proposes a contingency framework that states that
the effects of formalization and centralization on absorptive capacity are dependent on the
learning mode of the organization. They propose that small organizations mainly have a
single learning mode, while large organizations mainly have a dual learning mode. In case of
a single learning mode, organizations maintain the same structural pattern while absorptive
capacity takes place, and they have no clear division of work for the stages of learning.
Employees are completely involved in the entire process (Ali et al, 2017). In the case of a
single learning mode, formalization would have a negative effect on absorptive capacity,
because this learning mode is more initiation viable and for initiation the organization needs
to be flexible and as open as possible to sources of information and alternative courses of
action (Ali et al, 2017). A high degree of formalization would inhibit this flexibility and
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initiation and implementation stages and these organizations execute a dual learning mode. In
the case of a dual learning mode, organizations as a whole are involved in absorptive capacity
and are expected to change their structural patterns during the two stages of absorptive
capacity. In this case, the two stages of absorptive capacity are; the initiation stage, also
known as potential absorptive capacity (PACAP); and the implementation stage, also known
as realized absorptive capacity (RACAP). Formalization would have a negative effect on
PACAP, whereas it would have a positive effect on RACAP. This positive effect on RACAP
arises, because formalization creates organizational memory, which is essential for
transformative and exploitative learning. Given that this study only investigates small- and
medium sized firms, it is expected that single mode learning is the dominant mode of
learning, and therefore it is expected that formalization has a negative effect on these firms’
absorptive capacity. Therefore, the first hypothesis about organizational structure is:
H1a: “There is a negative relationship between formalization and absorptive capacity.”
2.1.2 Centralization
Centralization refers to the allocation of decision-making, and the hierarchy of authority
within an organization (Kim, 1980; Pierce & Delbecq, 1977). According to Damanpour
(1991), a highly centralized structure hinders the interaction among organizational members,
and reduces opportunities for innovation, knowledge solutions and for creating new
knowledge. A more centralized decision structure requires a greater number of channels
through which communication of new ideas and learning must travel (Kim, 1980). Moreover,
a decentralized structure typically leads to broader communication channels, improving the
accurate and timely flow of information, as well as the quantity and quality of ideas and
knowledge (Sheremata, 2000). Low levels of centralization were found to be more likely to
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and work environments with a low degree of centralization enhance knowledge creation and
sharing by motivating organizational members’ involvement (Liao, 2007). There is also literature suggesting that centralization can have positive effects on absorptive capacity. The
main arguments for this positive effect are that centralization enables the promotion of the
capacity of information integration and dissemination and it increases the efficiency of
information processing (Chen & Chang, 2012; Kim, 1976). Centralization also specifies the
level of authority and responsibility, resulting in clarity regarding organizational members’ roles in the knowledge transfer process (Tsai, 2002). Although there are findings that give
support for a positive relationship between centralization and absorptive capacity (De Araújo,
2010; Tsai, 2002), a decentralized organizational structure has much more often been found
to have a positive effect on knowledge management processes and thus on absorptive
capacity (Ali et al, 2017; Damanpour, 1991; Jansen et al., 2005; Lee & Choi, 2003; Zheng,
Yang, & McLean., 2010). The contingency framework of Ali et al (2017) proposes that
organizations with a single learning mode experience a negative effect of centralization on
absorptive capacity, whereas organizations with a dual learning mode experience a negative
effect on the initiation stage (PACAP) and a positive effect on the implementation stage
(RACAP). Centralization is unfavorable in the initiation stage, because it inhibits non-routine
problem solving and deviation from existing knowledge, which are essential in this stage.
Centralization is more favorable for the implementation stage, because it increases the
efficiency of information processes, which is essential in this stage. Given that this study only
investigates small- and medium sized firms, it is suspected that single mode learning is the
dominant mode of learning and therefore centralization will have a negative effect on
absorptive capacity. The second hypothesis about organizational structure is:
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2.2 Positive affective tone
George defines affective tone as “a set of consistent positive and negative feelings held in common across organizational members” (George, 1990, p.108). Within organizational science, the concept of affective tone is a structure containing two opposing constructs;
positive affective tone (positive collective affectivity), and negative affective tone (negative
collective affectivity) ( (George, 1996; Judge, 1992). Positive affective tone refers to the
collective tendency to experience intense pleasant feelings. At the high pole enthusiasm and
excitement anchor the dimension. At the low pole these feelings tend to be absent, but
negative affect is not necessarily present (Cropanzano, Weiss, Hale, & Reb, 2003). Negative
affective tone refers to the collective tendency to experience intense unpleasant feelings. At
the high pole such feelings as anxiety and anger tend to be present. At the low pole these
negative feelings tend to be absent, but positive affect is not necessarily present (Cropanzano
et al, 2003). While in definition reversed from each other, positive affective tone and negative
affective tone in practise do not always have opposing implications on organizations (George
& King, 2006; Phillips & Count, 2007; Tsai et al, 2012). Therefore, they need to be
investigated as separate phenomena. For the matter of focus, this study only investigates
positive affective tone.
Positive affective tone is a term that has its roots in psychological research in
emotions and moods (Bruner & Postman, 1947; Rafaeli & Sutton, 1989; Watson, Clark, &
Tellegen, 1988). Besides its popularity in the field of psychology, it is also gaining more
attention and popularity about its role in the organizational context (Elfenbein, 2007; Flynn,
Chatman, & Spataro, 2001; Herrbach, 2006). Prior research has shown how positive emotions
are related to organizational learning by increasing the organizational members’ readiness to learn, and by increasing search, processing, and production of new knowledge (Scherer &
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creativity, motivation, learning and performance, and organizational transactive memory
(Abe, 2011; Huang, 2009; Scherer &Trang, 2003; Tsai et al., 2014). Moreover, positive
affective tone could be linked to the affective dimensions of the concept ‘productive
organizational energy’ (POE), because it also captures collective positive emotional states that energize work members. Collective organizational energy has been implicitly linked to
organizational learning because of its affective and cognitive domain (Cross, Baker, &
Parker, 2003). Since positive emotions of people seem to be related to organizational
learning, and learning is a critical element of absorptive capacity, it can be justified to suspect
that positive affective tone is directly or indirectly related to absorptive capacity. Since
organizational structure influences absorptive capacity, and since the effectiveness of
learning, knowledge sharing, and transactive memory is influenced by emotions of work
members, this study suspects that the relationship between organizational structure and
absorptive capacity is moderated by positive affective tone. More specifically, both the
relationship between formalization and absorptive capacity and the relationship between
centralization and absorptive capacity are expected to be positively moderated by positive
affective tone. Basically, the idea behind this moderation is that formalization and
centralization have effects on learning and the absorption of knowledge of an organization,
but these effects are different when there is a higher level of collective positive emotions
(positive affective tone) compared to when there is a lower level of positive collective
emotions.
This study expects positive affective tone to have a positive effect on the relationship
between formalization and absorptive capacity. As mentioned before, formalization is
expected to have a negative effect on the single mode learning of small firms. A high degree
of formalization would have a negative effect on the exploratory learning process, where
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(Ali et al., 2017; De Araújo, 2010). Despite the fact that this unfavorable structural
component may hinder knowledge sharing and the establishment of informal relations, there
might be emotional factors that dampen this negative effect of formalization. The affective
fusion model states that positive affective tone not only stimulates information processing,
but it also states that positive affective tone stimulates information sharing (Forgas, 1995).
Additionally, Tsai et al (2014) found that positive affective tone enhances knowledge and
information integration and that it results in a more positive interpretation of group issues.
This positive interpretation of issues makes group members see these issues more as
opportunities and it makes them evaluate coworkers more positively. Thereby it increases
group member’s confidence and willingness to share knowledge (Forgas, 1995; Tsai et al, 2014). Moreover, this positive evaluation of coworkers might enhance the formation of
informal relations, because people feel more comfortable with each other. Therefore, the
negative effect of formalization on absorptive capacity is expected to be dampened by
positive affective tone. Hence, this study expects that positive affective tone positively
moderates the relationship between formalization and absorptive capacity, because it
increases knowledge sharing and informal relationships throughout the organization.
Therefore the first hypothesis regarding positive affective tone is:
H2a: “Positive affective tone positively moderates the relationship between formalization and absorptive capacity.”
This study expects positive affective tone to have a positive effect on the relationship
between centralization and absorptive capacity, meaning that positive affective tone makes
this relationship less negative. Prior literature related a higher degree of centralization to a
lower degree of knowledge creation and knowledge sharing (Liao, 2007). A centralized
structure requires more channels through which the communication of new ideas must travel,
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knowledge and ideas in terms of quantity and quality (Ali et al., 2017; Ouchi, 2006;
Pertusa-Ortega et al., 2010) . However, the severity by which centralization inhibits absorptive
capacity is dependent on other factors that influence the acquisition, assimilation, and
application of knowledge. As mentioned before, the affective fusion model states that
positive affective tone stimulates information processing and sharing (Forgas, 1995). This
study expects that positive affective tone decreases the negative effect of centralization on
absorptive capacity based on the same logic as why it would decrease the negative effect of
formalization on absorptive capacity. Positive affective tone makes group members interpret
group issues as more positive and evaluate their coworkers as more positive, resulting in
more confidence and willingness to process and share knowledge (Forgas, 1995; Tsai et al,
2014). Centralization makes the path which the knowledge has to travel longer, but positive
affective tone increases group members’ input of knowledge. A higher input of knowledge would decrease the net negative effect of the unfavorable information structure on absorptive
capacity. Moreover, positive affective tone stimulates interaction among organizational
members whereas centralization would inhibit this interaction. Therefore it is suspected that
positive affective tone diminishes the negative effect of centralization on absorptive capacity.
Based on the arguments stated above, the second hypothesis regarding positive affective tone
is:
H2b: “Positive affective tone positively moderates the relationship between centralization and absorptive capacity.”
2.3 Absorptive capacity
This study uses the definition of absorptive capacity of Lane et al. (2006), because it bridges
the original definition of Cohen and Levinthal (1990), which includes exploratory learning,
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thereby providing a definition that links and includes both forms of learning. “Absorptive
capacity is a firm's ability to utilize externally held knowledge through three sequential
processes: (1) recognizing and understanding potentially valuable new knowledge outside the
firm through exploratory learning, (2) assimilating valuable new knowledge through
transformative learning, and (3) using the assimilated knowledge to create new knowledge
and commercial outputs through exploitative learning” (Lane et al., 2006 p.856). This study uses the dataset of Alexiou, Khanagha, & Schippers (2018) to measure the variables. Alexiou
et al. (2018) operationalized absorptive capacity based on the definition of Lane et al. (2006)
and thus measured absorptive capacity based on three dimension of Lane et al (2006). It is
also for this reason that this study uses the same conceptualization of absorptive capacity. It
must be mentioned that Alexiou et al. (2018) follow the conceptualization of Schleimer and
Pedersen (2013) by making a distinction between absorptive capacity and the enactment on
absorptive capacity. They compared the relationship between absorptive capacity and the
success of implementing cloud computing and found, as expected that all three dimensions of
absorptive capacity were positively related to the enactment on absorptive capacity. For the
matter of focus, this study does not include the enactment on absorptive capacity in the
theoretical model. As has been found in previous studies (Alexiou et al., 2018; Schleimer &
Pedersen, 2013), it is assumed that absorptive capacity leads to technology adoption
(enactment on absorptive capacity).
2.4 Theoretical model
Based on the theoretical framework described in the previous sections, the following
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3. Research method
The research question is answered by analyzing the data of a recent survey conducted among
top management officials in firms that have recently adopted Cloud technology (Alexiou et
al., 2018). The research measured cloud adoption among 111 firms in 5 different industries.
These industries, according to industry analysts, depend heavily on the adoption of cloud
technology, because they are heavily affected by the disrupting effects of the new Cloud
technology.
3.1 Data collection
To test the hypotheses, a sample of 111 firms in five different industries in five countries has
been used (Alexiou et al., 2018). The industries are; automotive, telecommunications,
hospital & healthcare, insurance & banking, and retail. Alexiou et al (2018) identified their
population for data collection through a major professional Cloud computing community in
the Netherlands involving the largest world-wide community of firms that are challenged by
the disrupting effects of Cloud computing. This community reached thousands of members,
but only the small- and medium sized firms were selected for analysis. The sample contains
solely small- and medium sized firms, because these firms tend to have less heterogeneity in
affective tone (the key independent variable in this study) than large firms. Large firms tend
to have more autonomously operating subunits that are less likely to share affective tone
(Barsade & Knight, 2015: Knight et al., 2017). This focus on small- and medium sized firms
enhances the validity of the research design. Regarding reliability in the evaluation of
absorptive capacity and other variables in this study, only the evaluation of CEO’s and members of top management teams are used. CEO’s and top management team members are an adequate source for measuring organizational structure, because they set the structural
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understanding of the organizational structure. CEO’s and top management team members are also assumed to be a valid source for absorptive capacity and positive affective tone, because
they have the best overall overview of the organization. It is assumed that the CEO’s and the top management team members are aware of where and how recognition, assimilation and
application of knowledge in their organization takes place. The positive affective tone
variable could, by its definition, be measured by any member of the organization, since it
entails a collectively experienced emotional state. Any member of the organization should be
a valid and reliable source for positive affective tone, and therefore the evaluations of CEO’s and members of the top management team are assumed to be a valid and reliable source for
measuring positive affective tone in this study. The survey was sent by email. After filling in
the questionnaire, the respondents sent the questionnaire back by email.
3.2 Measures
All variables have been measured by using a five-point Likert scale ranging from 1= “totally
disagree” to 5= “totally agree”, except indicated otherwise. The items and scales used of each variable are presented in appendix 1.
Organizational structure: Formalization in the context of this study refers to the
degree to which a codified body of formal rules, standard policies, procedures or behavior
prescriptions is developed to govern decisions and work processing (Pierce & Delbecq,
1977). Centralization in the context of this study refers to the concentration of
decision-making in an organization, and the hierarchy of authority within this organization, inhibiting
employee autonomy (Kim, 1980; Pierce & Delbecq, 1977). Formalization and centralization
have been measured based on three item scales of Alexiou et al (2018), which are adapted
versions of the five item scales of the study of Jansen et al.(2006) for measuring
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arises, written procedures are available for dealing with it” and “Even small matters have to be referred to senior management for a final answer”. Since these scales have been used in
multiple researches for measuring the degree of formalization and centralization, the results
of this study can be compared to those of other studies. This provides an adequate base for
comparison and evaluation of results.
Positive affective tone: Positive affective tone in the context of this study corresponds
to the collective tendency to experience intense pleasant feelings (George, 1996). Because of
sufficient similarities in definitions, the degree of positive affective tone has been measured
based on the emotional (affective) dimension of POE measured by Alexiou et al. (2018).
They used a ten item adapted version of Cole, Bruch and Vogel’s (2012) “productive energy at work” questionnaire. Only the affective dimension of this questionnaire is used, because this study does not focus on the cognitive and the behavioral dimensions of productive
energy. Four items of the POE questionnaire correspond to the affective dimension.
Examples of these items are “people in the organization feel enthusiastic in their job” and
“people in the organization feel energetic in their job”. Using the scale of Cole et al. allows to compare the results to the results of other studies that also used this method of measurement.
Absorptive capacity: For the measurement of absorptive capacity, the nine items scale
of Alexiou et al (2018) for measuring absorptive capacity in terms of Cloud technology
adoption has been used. Their scale is an adapted version of the scale of Schleimer &
Pedersen (2013). Just like Schleimer and Pedersen (2013), this study conceptualizes
absorptive capacity as having three different dimensions; recognition, assimilation, and
application. This conceptualization of absorptive capacity is able to measure the ability of a
firm to recognize, assimilate, and apply knowledge successfully, apart from the enactment on
this ability (which is not included in this study). Examples of items are “We recognized the potential of Cloud technology to create value for the organization”, “We understood the
24
components of Cloud solutions fitted together to make it work in our business”, and “We adjusted some components of the Cloud system to make it work more successfully”.
control variables: In line with the research of Alexiou et at (2018), firm age and firm
size have been used as control variables due to their potential influence on resource
availability and flexibility (Jansen et al., 2005). Firm age was measured by taking the number
of years since a firm’s founding. Firms were categorized on size based on the European standards for SMEs; micro (1-10 employees), small (11-50 employees), and medium (51-250
25
4. Results
The first step in the data analysis process was executing a reliability analysis in order to
check the reliability of the scales. Table 1 gives an overview of the descriptive statistics and
correlations of the variables. The Cronbach’s alphas of the scales are projected on the diagonal. All variables had a Cronbach’s alpha > .74, indicating that all scales are sufficiently reliable. Moreover, all items of each scale had a good correlation with the total score of the
scales, and if deleted, none of the items would substantially affect reliability.
Table 1: Descriptive statistics, correlations, and scale reliabilities
Next, a principal factor analysis was conducted on the items of the variables in order
to examine shared variance among them. A Kaiser-Meyer-Olkin measure revealed a KMO of
.823. Additionally, Barlett’s test of sphericity showed that correlation between items were sufficiently large; χ2 (171= 1430,686 p <.001). Based on Kaiser’s criterion, five factors
were subtracted with eigenvalues larger than one, cumulatively explaining 76.5% of the
variance. These five factors were applied and rotated with an Oblimin with Kaiser
normalization. The factor loadings after rotation are presented in appendix 2. Item loadings
suggest that factor 1 represents assimilation and application, factor 2 represents
formalization, factor 3 represents positive affective tone, factor 4 represents recognition, and
26
same factor. Moreover, factor 1 and 4 have a cross-loading of .492. These results suggest that
recognition, assimilation, and application share variance and similarities. This finding makes
theoretical sense, because these variables belong to the same overarching construct, namely
absorptive capacity. The three stages of absorptive capacity are often intertwined and can
emerge simultaneously (Ali et al, 2017). Therefore, there might be overlap between the three
dimensions and they might share some variance.
The correlation coefficients in table 1 show, as expected, that the three dimensions of
absorptive capacity (recognition, assimilation, application) are highly and significantly
correlated (r = .54, p < .01 for recognition with assimilation; r = .51, p , .01 for recognition
with application ; r = .67, p < .01 for assimilation with application). However, contrary to
expectations, the structural variables do not correlate with all dimensions of absorptive
capacity. Formalization only correlates significantly with assimilation, and this correlation is
positive instead of negative (r = .20, p < .05). Centralization correlates, as expected,
negatively with all the dimensions of absorptive capacity, but these correlations are
insignificant. However, it must be mentioned that the p-value of the correlation with
assimilation is .07, which is just above the significance level of .05, so it is only marginally
insignificant. Positive affective tone is highly significantly correlated with all dimensions of
absorptive capacity (r = .41, p < .01 with recognition; r = .51, p < .01 with assimilation; r =
.32, p < .01 with application).
The next step in the data analysis process was to test the hypotheses. The analytical
approach for testing the hypotheses was performing hierarchical linear regression analyses to
test hypotheses 1a and 1b, and performing hierarchical linear regression analyses for
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4.1 Organizational structure and absorptive capacity
Hypotheses 1a and 1b proposed a relationship between organizational structure
(formalization and centralization) and absorptive capacity. Hypotheses 1a and 1b are tested
by regressing formalization and centralization on each dimension of absorptive capacity
separately. The statistics summarizing the results of the hierarchical regression analyses are
presented in tables 2.3, and 4.
Table 2: Regression of structure on recognition
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Table 4: Regression of structure on application
In the first step of the hierarchical regression the two control variables “firm age” and “firm size” were entered as the only variables in the model. This model was insignificant in all analyses for every dimension of absorptive capacity as the dependent variable; F (2,107) =
.28; p = .75 for recognition as the dependent variable; F(2,107) = .90; p = .41 for assimilation
as the dependent variable; and F(2,107) = .24; p = .78 for application as the dependent
variable. The next step was including formalization and centralization in the model as
independent variables. This model was only statistically significant when assimilation was
the dependent variable. This model explained 11% of the total variance; F(2,105) = 3.30; p <
.05. In this model both formalization (β = .28, p < .005) and centralization (β = -.20, p < .05)
were significant. The control variables did not have significant effects.
Hypothesis 1a is rejected, since a positive relationship, instead of a negative
relationship, has been found between formalization and the assimilation dimension of
absorptive capacity. Moreover, for the recognition and application dimensions no significant
relationships were found with formalization. The negative relationship between formalization
and application is in contrast to the predictions. Assuming that the data is valid and reliable,
29
stronger than the negative effects. Ali et al (2017) proposed in their contingency framework
that smaller firms tend to have more of a single learning mode in which absorptive capacity is
enhanced by a low level of formalization. Based on the contingency framework and the
results of this study, two alternative conclusions could be drawn. Either, the firms analysed in
this study, despite their size, have a dual learning mode instead of single learning mode, or
there are other underlying mechanisms that influence whether formalization is beneficial for a
single learning mode. Based on theory, the latter seems the most likely explanation. There is
an increasing body of research pointing out that formalization has increased benefits in
organizations in which work is increasingly characterized by complexity, interdependence,
autonomy, and time pressure (Adler, 2005; Juillerat, 2010; Kozlowski & Bell, 2003). In these
kinds of work environments, formalized procedures can more effectively synchronize
interdependent activities, conserve employees’ cognitive and temporal resources, and
ultimately improve both individual and group performance (Juillerat, 2010). Since the firms
in the dataset are intensely experiencing the disrupting effect of Cloud technology, it could be
assumed that work in these firms is indeed characterized by increasing complexity,
interdependence, autonomy, and time pressure. Therefore, the positive effects of
formalization might enhance the single learning mode of these small and medium-sized
firms. Future research should investigate the specific conditions that influence the effect of
formalization on firms with single and dual learning modes.
Hypothesis 1b is supported for the assimilation dimension of absorptive capacity, but
no significant relationships have been found between centralization and the recognition and
application dimensions of absorptive capacity. Therefore H1b is rejected for the recognition
and application dimensions.
It is striking that both relationships of formalization and centralization are only
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create a starting point for explaining these results, it is relevant to zoom in on the three
dimensions of absorptive capacity as defined by Lane et al (2006). Lane et al (2006)
distinguish in their model of absorptive capacity different drivers that influence absorptive
capacity. Even though all drivers influence absorptive capacity as a construct in a whole, the
individual drivers are proposed to have more influence on the one dimension than on the
other (Lane et al, 2006). More specifically, assimilation of newly acquired knowledge with
existing knowledge at the firm level is affected by knowledge management processes and
structure, because these drivers affect how knowledge is shared and transferred to different
parts of the organization (Lane et al, 2006). However, recognition is proposed to be more
influenced by individual’s mental models and might, therefore, be less affected by
organizational structure. The effectiveness and efficiency of application is also proposed to
be influenced by structure and processes, but this effect occurs mainly through assimilation
where most of the knowledge sharing and transferring takes place (Lane et al, 2006; Zahra &
George, 2002).This might give a clue why formalization and centralization are only
significantly related to the application dimension of absorptive capacity. Future research has
to take a deeper look at the specifics of the relationships between structure and each
dimension of absorptive capacity instead of the construct as a whole.
4.2 Positive affective tone as a moderator
Hypothesis 2a and 2b proposed a positive moderating effect of positive affective tone on the
relationship between organizational structure and absorptive capacity. They were tested by
performing a hierarchical moderation regression analysis including positive affective tone as
a moderator while regressing formalization and centralization on every dimension of
absorptive capacity. Prior to entry in the models, the independent variables (formalization/
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“firm age” were standardized in order to avoid multicollinearity. In each analysis, firm age and firm size were controlled for in the first step. After controlling for the effect of the
control variables, the effects of the independent variable and the moderating variable, and
their interaction effects were tested. The results of the linear regression analyses for
moderation are presented in tables 5 and 6 on the next page. Table 5 represent the result for
regressing formalization with positive affective tone on every dimension of absorptive
capacity and table 6 represents the results for regression centralization with positive affective
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Table 5: Statistics moderation effect: formalization and positive affective tone
Centralization Recognition Assimilation Application
Coefficient SE t p Coefficient SE t p Coefficient SE t p
Intercept i1 4.39 .16 27.80 < .001 4.57 .17 27.34 <.001 4.03 .19 21.27 < .001 Centralization (X) c1 .02 .06 .33 .739 .02 .05 .28 .781 -.02 .08 -.21 .835 PAT (M) c2 .28 .06 4.45 < .001 .35 .06 6.39 <.001 .22 .08 2.91 .004 Centralization*PAT (XM) c3 .02 .05 .29 .771 .16 .10 3.17 .002 .11 .07 1.70 .092 Firm age c4 .08 .07 1.19 .236 .03 .10 .34 .733 .04 .08 .48 .636 Firm size c5 -.01 .08 -.14 .892 -.12 .08 -1.48 .141 .05 .09 .55 .583 𝑅2= .182 p < .001 𝑅2= .338 p < .001 𝑅2 = .131 p < .05 F(5,104) = 4.615 F(5,104) = 12.813 F(5,104) = 3.129
Table 6: Statistics moderation effect: centralization and positive affective tone
Formalization Recognition Assimilation Application
Coefficient SE t p Coefficient SE t p Coefficient SE t p
Intercept i1 4.35 .16 27.83 < .001 4.59 .16 29.28 < .001 4.03 .19 2.88 < .001 Formalization (X) c1 .04 .06 .59 .554 .14 .06 2.23 .028 .04 .07 .58 .564 PAT (M) c2 .27 .06 4.68 < .001 .35 .06 5.95 < .001 .24 .07 3.335 .001 Formalization*PAT(XM) c3 .06 .06 .81 .418 -.02 .06 -.26 .793 .01 .08 .13 .899 Firm age c4 .07 .07 1.1 .273 .02 .06 .26 .797 .03 .08 .36 .717 Firm size c5 -.02 .08 -.28 .779 -.16 .08 -1.99 .049 .03 .1 .34 .734 𝑅2 = .189 p < .001 𝑅2= .313 p < .001 𝑅2 = .109 p < .05 F(5,104) = 4.831 F(5,104) = 9.463 F(5,104) = 2.553
The analyses revealed that for the relationship between formalization and all the dimensions
of absorptive capacity, the moderating effect of positive affective tone was highly
insignificant (for recognition c3 = .06, p = .42; for assimilation c3 = -.02, p = .79; for c3 = .01
application p = .90). Therefore, hypothesis 2a is rejected. Hence positive affective tone does
not interact with formalization in its relationship with absorptive capacity for any dimension
of absorptive capacity.
As for the relationship between centralization and absorptive capacity, the moderating
effect of positive affective tone turned out to be positive and significant for the assimilation
dimension (c3 = .16; p < .005), but insignificant for the recognition (c3 = .02, p = .77) and the
application (c3 = .11, p = .09) dimensions. However, the moderation effect for the application
dimension is only slightly insignificant. When applying a significance level of .10, the effect
would be significant. Because of the results presented in table 6, hypothesis 2a is supported
for the assimilation dimension of absorptive capacity, but it is rejected for the recognition and
application dimensions. Hence, positive affective tone only interacts with centralization in its
relationship with absorptive capacity for the assimilation dimension.
Table 7: Conditional effect of centralization on assimilation
Table 7 represents the effect of centralization on assimilation for different percentiles
of positive affective tone. It helps to specify the effect of centralization on assimilation for
different values of positive affective tone. For very low levels of positive affective tone (10th
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levels of positive affective tone (25th and 50th percentile) centralization has no significant
effect on assimilation. For high to very high levels of positive affective tone (75th and 90th
percentile) centralization has a significant positive effect on assimilation. Consequently, the
moderation effect implies that centralization is negatively related to assimilation of
knowledge when there is a low level of positive affective tone in the organization and
centralization is positively related to assimilation of knowledge when there is a high level of
positive affective tone. This result actually exceeds the strength of the predicted moderation.
In case of high positive affective tone the relationship between centralization and assimilation
becomes stronger and reversed (from negative to positive). Positive affective tone does not
just dampen the negative effect, but turns it from negative to positive.
Notable is that only very low levels of positive affective tone relate to a negative
relationship between centralization and assimilation. Both high and very high levels of
positive affective tone are related to a positive relationship between centralization and
assimilation. Moreover, low versus high positive affective tone relate to more differences in
assimilation when centralization is high compared to when centralization is low. In other
words; positive affective tone influences the effect of centralization on assimilation more
when centralization is high.
The correlations in table 1 showed some striking results regarding the positive
affective tone variable. Positive affective tone is the only independent variable that is
significantly related to all dimensions of absorptive capacity; r(108) = .41, p < .01 with
recognition; r(108) = .51, p < .01 with assimilation; and r(108) = .32, p < .01 with
application. These findings gave a strong indication that positive affective tone might not just
have an interaction effect in the relationship between organizational structure and absorptive
capacity, but it might also be directly related to absorptive capacity. As it turns out, the
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absorptive capacity is significant in every regression model (c2 = .28; p < .001 for
recognition; c2 = .35 ; p < .001 for assimilation; and c2 = .24; p < .01 for application). In
every model the direct effect of positive affective tone is much stronger than the interaction
effect, indicating that positive effective tone does not just play a moderating role in the
relationship between structure and absorptive capacity, but it also, and perhaps even more,
plays a role of being directly related to absorptive capacity. This direct relationship was not
described in the theoretical model of this study. It is up to future research to explain and
further examine the direct relationship between positive affective tone and absorptive
capacity. A starting point for explaining the direct relationship between positive affective
tone with all dimensions of absorptive capacity could be the findings of the experiment of
Levin, Kurtzberg, Lount & Phillips (2010) that elated/ happy receivers of knowledge are
more likely than angry/ frustrated receivers to absorb and act on new information. So positive
emotions do not only enhance knowledge transfer, but they also enhance the absorption and
the application of knowledge. This might indicate why positive affective tone corresponds to
every dimension of absorptive capacity and not just to the assimilation dimension. Moreover,
they found that having receivers and sender of information (knowledge) in a group with the
same high-arousal affective stage as each other (affective congruence) enhances knowledge
transfer (Levin et al., 2010). This result highlights the effects of collective emotional states
and their potential to enhance knowledge transfer. Hence, emotions are not just phenomena
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5. Discussion
Absorptive capacity is a dominant concept in management literature that is widely accepted
to be essential for an organization’s competitive advantage through, amongst many other factors, technology adoption and innovation. Yet, there is no complete understanding of all its
antecedents and their interrelations (Distel, 2017; Martinkenaite & Breuning, 2016; Roberts,
2015). This study contributes to this understanding by shedding more light on the effects of
formalization and centralization while also acknowledging the role of positive affective tone
as one of the psychological underpinnings of absorptive capacity.
5.1 Theoretical contributions
This study makes several theoretical contributions. First of all, it contributes to the theory
regarding the effect of organizational structure on absorptive capacity. Literature in this field
contains mixed and ambiguous findings; both negative and positive effects of formalization
and centralization on absorptive capacity. The findings of this study provide nuance in
explaining the ambiguous relationship between organizational structure and absorptive
capacity. Instead of being related to every dimension of absorptive capacity, formalization
and centralization were only found to be significantly related to the knowledge assimilation
dimension of absorptive capacity. The findings of this study correspond to the context of
small and medium sized firms operating in industries that are heavily affected by the
disruptive effects of technological innovation. In this context of environmental uncertainty
and dynamism, formalization has a positive effect on knowledge assimilation, whereas
centralization has a negative effect.
Second, this study contributes to theory by providing insights in positive affective
tone as a psychological underpinning of absorptive capacity. The effect of emotions on
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captures positive emotions held on a collective level in an organization, which enhances
organizational learning by fostering creativity (Cross, Baker, & Parker, 2003). Besides
fostering organizational learning, it also stimulates knowledge sharing, knowledge
processing, and knowledge integration by making members evaluate each other and problems
more positively (Forgas, 1995; Tsai et al, 2015). This study proposed positive affective tone
as a moderator in the relationship between organizational structure and absorptive capacity
and found that positive affective tone positively moderates the relationship between
centralization and knowledge assimilation. Moreover, the results of this study seem to give a
strong indication that positive affective tone is not just a moderator between structure and
absorptive capacity, but it is even more a direct predictor of absorptive capacity itself, since it
turned out to be significantly related to each dimension of absorptive capacity. Future
research needs to investigate the direct relationship between positive affective tone and each
dimension of absorptive capacity.
Emotions have proven to be a crucial determinant of absorptive capacity and therefore
this research area needs to be developed in order broaden our understanding of the
antecedents of absorptive capacity. So far in academic management literature, emotions have
mainly be investigated at the individual level. However, this study contributes to theory that
emotions also emerge collectively in organizations and that collective emotions have
significant implications for organizational phenomena like absorptive capacity.
5.2 Managerial implications
Managers operating in dynamic and uncertain industries face big challenges due to the
disruptive nature of new technologies and innovation. They need to organize their
organization in a way that it is able to timely create and absorb knowledge of new
38
order to optimize their absorptive capacity, managers need to account for the three different
dimensions of absorptive capacity; the recognition of valuable new technologies, assimilating
the knowledge of new technologies with existing organizational knowledge and processes,
and applying the new technology by adjusting it to specific needs and characteristics of the
organization.
This study comes with several implications for managers of small and medium sized
firms in dynamic industries adopting new technologies. In order to maximize absorptive
capacity, managers need to account for the effect of their organizational structure. Absorptive
capacity, and especially the assimilation of new knowledge and technologies, is most likely
to be enhanced by a lower level of centralization and a higher level of formalization.
Additionally, positive affective tone is an important factor that directly and indirectly
enhances a firm’s absorptive capacity. Positive collective emotions directly enhance the recognition, assimilation, and application of new knowledge and technologies. Besides this
direct effect, positive collective emotions dampen the negative effect of centralization on the
assimilation of knowledge and technologies. Moreover, when the level of positive affective
tone is sufficiently high, the negative effect of centralization can even be reversed to a
positive effect. Hence, it is extremely important for managers to account for the influence of
collective emotions and to put efforts in creating positive affective tone when adopting new
technologies.
5.3 Limitations and directions for future research
This study comes with limitations resulting from its focus and research design. First, the
focus of this study is on small and medium-sized firms operating in industries that are heavily
affected by the disruptive effect of Cloud technology. While the research contains data on
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of structure, absorptive capacity, positive affective tone, and their interrelations. For example,
the healthcare industry is probably more legally bound to apply a higher degree of
formalization compared to the telecommunications industry, and this might result in
inter-industry differences in terms of structure, absorptive capacity and positive affective tone.
Second, the research design measures the variables based on self-reported values by
managers of the firms. While this approach has been accepted as a viable measurement of a
firm’s structure, absorptive capacity, and positive affective tone (Jansen et al., 2006;
Schleimer & Pedersen, 2013; Barsade, Ward, Turner & Sonnenfeld, 2000), it comes with the
limitation that only the assessments of high level organizational members are taken into
account. For the structural variables this is not a significant problem, since management sets
the structural conditions and therefore it is assumed to have the best overview of the levels of
formalization and centralization. However, absorptive capacity could be experienced
different among different organizational levels. Moreover, knowledge sharing among all
organizational levels is a crucial element of absorptive capacity, and therefore a measurement
including members of all organizational levels would give a more adequate representation of
a firm’s absorptive capacity. An example of a study that does this, is the study of Peeters, Massini, and Lewin (2014). As for positive affective tone, the measurement by managers
does not seem like a big limitation, since it entails a collectively experienced emotional state,
which could be very well reported by a single manager. However, even though there might be
an average collective positive emotional state, this state might be experienced as more
positive by managers and less positive by members of lower organizational levels. A
measurement of positive affective tone including members of all organizational levels would
account for this possible limitation. The study of Alexiou et al. (2018) gives reason to suspect
that different organizational levels might report different levels of absorptive capacity and
40
management) and a qualitative study (including perceptions of all organizational levels). The
qualitative study resulted in more negative results regarding the role of formalization on
emotions and absorptive capacity. This could indicate that members of lower organizational
members experience different emotions and different implications of structure on absorptive
capacity. Future research has to account for this limitation by measuring variables at different
organizational levels.
Third, this research does not account for dynamics and there could be common
method bias due to the research design. In order to be able to account for dynamics and
minimize the detrimental effects of common method bias, future research should, when
possible, implement the following design features; use multiple data sources at multiple
points in time, obtain the measures of the variables from different sources (not only from
managers and not only self-reported), avoid social desirability, and eliminate common scale
properties.
Fourth, the sampling was not random and was based on the availability of companies
through a major community of cloud computing in the Netherlands. Although this
community gave access to a large part of the population, it did not cover all the population.
This might harm the external validity. In order to avoid this limitation, future research should
use other communities to access data of other industries and countries.
Fifth, the method of using cross-sectional data does not allow to conclude causality,
nor its direction. Causality between the organizational structure and absorptive capacity is
solely assumed based on existing theory. Also causality between positive affective tone and
absorptive capacity cannot be concluded based on this research design. While it is very
reasonable to assume that positive emotions lead to enhancement of absorptive capacity, it
would also make sense to argue that enhanced absorptive capacity might increase positive
41
and longitudinal studies to be able to conclude causality between these variables. Also
qualitative research would help to shed light on the specifics of these relationships.
Finally, this study only investigated the effect of collective emotions in the form of
positive affective tone. Despite the fact that this concept brings numerous insights in the role
of collective emotions, it does not create a complete picture of collective emotions. The other
end of the continuum of collective emotions is captured in the concept of negative affective
tone. Even though findings in this area are limited, existing research indicates that the effects
of negative affective tone are not reversed to those of positive affective tone (Phillips &
Lount, 2007; George & King, 2007; Tsai, Chi, Grandey & Fung, 2012). Therefore, future
