Augmenting Absorptive Capacity Learning Processes for Innovation: Insights for effective leadership within global pharmaceutical companies

Absorptive capacity (AC), which comprises exploratory, transformative, and exploitative learning processes, enables organizations to exploit external knowledge for adopting innovation. Despite extensive research into AC, leadership styles have received little attention. This paper discusses the results of a study undertaken in three pharmaceutical organizations that augments AC theory relating to top- and middle-level management behaviour. The findings suggest that the influence of transformational and transactional leadership styles varies between the AC learning processes within and across organizations. We also explored CEOs’ knowledge, trust in middle management, and intention towards sharing knowledge, which facilitate the learning processes. The research has implications for the enhancement of opportunities to enable successful innovations based on the recognition of leadership styles and managers’ roles. We report several novel contributions that are of value to academics and practitioners.