Existing studies indicate that external knowledge exploration plays a critical role in software process improvement (SPI) success. However, how external SPI knowledge is utilized internally within firms for continual improvements under an organization’s changing environments is still unclear. To address this question, this research uses the dynamic capabilities theory, by focusing on absorptive capacity (AC) – a knowledge-based dynamic capability – and its contextual influence, due to organizational climate, to explore and examine a firm’s ability to achieve and sustain SPI success. Specifically, we develop a model that considers cohesion, innovation and autonomy climates, to further explore how organizational climate influences AC. A survey is conducted to examine the model, by analyzing 125 Chinese and Taiwanese firms certified with Capability Maturity Model Integration (CMMI), a recognized SPI program. Results suggest that cohesion, innovation and autonomy climates positively influence AC, which ultimately can lead to SPI success. In particular, among the three climates, cohesion climate plays a more dominant role in contributing to AC.
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