The role of entrepreneurial leadership and absorptive capability to technology adoption for improving business unit’s performance; an empirical research of Indonesia electricity company

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Abstract

Purpose—Using TOE framework and RBV this study is to assess the interaction of entrepreneurial leadership with absorptive capability—as representative of dynamic capability—for explaining the successful technology adoption in business unit level. Design/methodology/approach—A total of 518 supervisors representing 222 business unit of Indonesia Electricity Company completed an online survey questionnaire measuring their responses to six constructs which explain the relationship among technology adoption determinant factors in organization: cast enactment (leadership), transformational enactment (entrepreneurship), absorptive capability, technology adoption and unit performance. A structural equation modeling (SEM) approach using LISREL 8.7 was employed for modeling and data analysis. Findings—Results revealed that the absorptive capability is one of technology adoption determinant factors that significantly enhance unit’s performance indirectly. Among entrepreneurial leadership variables, cast enactment (leadership) is less effective than transformational enactment (entrepreneurship) to affect the unit’s absorptive capability for the successful technology adoption. Leadership does not affect both technology adoption and absorptive capability directly. While entrepreneurship’s effect to technology adoption is indirect; it is mediated by absorptive capability. In addition, three out of six hypotheses were supported in this study. The CFA test of the measurement model and GOFI values of significance tests from the analysis of the structural model show that the overall fit of the structural model is good. Overall, the data in this study provided support that the hypothetical model is a fairly efficient with a potential to help in understanding technology adoption perceived of managers in Indonesia. Originality/value—The model is a well-tested and valid to explain the role of entrepreneurial leadership and absorptive capability to the technology adoption for enhancing unit’s performance. The study empirically proved that technology adoption is a functional competence/capability mediating absorptive capability with unit’s performance. This study also validated the model on a sample of utility company managers in Indonesia and the results provided initial support for the determinant factors variability of the technology adoption in intra-firm context.

Original languageEnglish
Pages (from-to)1234-1239
Number of pages6
JournalAdvanced Science Letters
Volume22
Issue number5-6
DOIs
Publication statusPublished - 1 May 2016

Keywords

  • Absorptive capability
  • Entrepreneurial leadership
  • TOE framework
  • Technology adoption

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