Enhancing the Potential Absorptive Capacity of the Project-Based Organizations Through Human Resources Development: Evidence from Registered Contractors in Tanzania

The potential absorptive capacity (PAcap) of a firm can best be achieved, given a set of antecedents in terms of knowledge sources and experiences. The limit to these antecedents however remains unexplored and it offers opportunities for future expansion of the ACAP theory through research. The main purpose of this study is to examine the influence of human resources development practices on PAcap of project based organizations (PBOs). The study is explanatory in nature and it adopted a cross-sectional research design. In data analysis, simple random sampling technique was applied in selecting 293 representatives from 293 contractors and questionnaires was used in data collection as well as the PLS-SEM with the help of SmartPLS 3.2.8 software. The findings reveal that career development, developmental performance appraisal and team building have positive influence on the PAcap of a firm. The study contributes to the body of knowledge that all of the three human resources development (HRD) attributes are the perfect antecedents of PAcap in the absorptive capacity theory. It is also recommended that managers and policy makers have to introduce, initiate and encourage employees to participate in different career development programmes, engage fully in developmental performance appraisal programs and effectively build teams. Future researches on absorptive capacity are suggested to be conducted in the longitudinal kind of design to accommodate the procedures of knowledge creation from acquisition to its exploitation.