Reconceptualization of absorptive capacity as potential and realized absorptive capacity for project-based organizations

•PACAP and RACAP positively influence project performance.•RACAP mediates between PACAP and project performance.•Social processes enhance the positive influence of PACAP on RACAP.•Social processes enhance the influence of PACAP on project performance via RACAP. Absorptive capacity is vital for project-based organizations to respond to complex, uncertain and rapid changes in a project environment. This study reconceptualizes absorptive capacity as potential and realized absorptive capacity in the context of project-based organizations. Further, drawing on social exchange theory, this study also examines the moderated-mediation role of social processes on the influence of potential absorptive capacity on project performance through realized absorptive capacity. Data was collected from 376 executives working in project-based organizations in Indian projects and was analysed using stepwise regression and substantiated using necessary conditions analysis. The findings indicate that the firms with stronger social processes leverage potential absorptive capacity to improve project performance through realized absorptive capacity. These insights will help project managers to formulate strategies that improves social processes that can enhance the project performance and become more resilient.