Innovative performance of project teams: the role of organizational structure and knowledge-based dynamic capability

Purpose This study aims to investigate the relationship between knowledge-based dynamic capability and organizational structure on team innovative performance in Brazilian industrial companies. Design/methodology/approach This study is based on data from a survey of 262 respondents from 65 companies in the Brazilian industrial sector with project teams and followed the partial least squares approach to model the structural equation that was used for data analysis. Findings The results of the study show that mechanical structures with a high degree of formalization and centralization have a negative impact on knowledge-based dynamic capability and integration has a positive relationship with dynamic capability. Moreover, the research shows that project team innovative performance is directly affected by knowledge generation and combination capability; however, knowledge acquisition/absorption does not interfere with project team innovative activity. Practical implications This study contributes to the managers of firms in the industrial sector by analyzing how the characteristics of organizational structure impact dynamic capability and project team innovative performance. The results of this study indicate that more mechanical structures have more difficulty in developing knowledge-based dynamic capability in the context of project teams. Originality/value This study advances the concept of knowledge-based dynamic capability from the firm level to the project team level. This study accesses a research gap that characterizes organizational structure as an antecedent of dynamic capability, analyzing the impact of organizational structure on the dimensions of dynamic capability and of the latter on project team innovative performance.