Video: What is absorptive capacity?

And here is the script that I more or less stumbled through.

So, what is absorptive capacity?

According to the seminal 1990 article by Cohen and Levinthal it’s “a firm’s ability to recognize the value of new information, assimilate it, and apply it to commercial ends”

Extending this, Zahra and George (2002) say it is ‘‘is a set of organizational routines and strategic processes by which firms acquire, assimilate, transform, and exploit knowledge for the purpose of value creation.’’

They break that down into potential absorptive capacity – around acquiring and assimilating and realized absorptive capacity – around transforming and exploiting. Too much of the later – from routinising, can lead to a competence trap, but I’m digressing…

There’s also “relative absorptive capacity” – which firm has more, but I’m digressing…

It’s tied up with notions of innovation, organisational learning (natch), dynamic capabilities, competence traps, deliberative learning, knowledge management combinative capabilities and a bunch of other interesting terms.

Ways to think about it

Don’t think of a sponge though – that is too passive a metaphor. So is a bunch of keys that would “unlock” other knowledge.
It’s much messier, more fluid and iterative than that, and as Aribi, A. and Dupouet point out it is a non-linear process with feedback loops within and between the stages.

There are lots and lots of unanswered research questions for the capitalists, check out Volberda et al. 2010 for a nice listing. But

What are the barriers for social movement organisations?

  • They don’t want or “need” to learn (our old friend the smugosphere)
  • They have pitiful or absent knowledge management structures
  • They have a high turn-over of personnel
  • They are up to their neck in alligators, and have forgotten that they came to drain the swamp

Things you should read

Aribi, A. and Dupouet, O. 2016.Absorptive capacity: a non-linear process. Knowledge Management Research & Practice, Vol. 14, pp.15-26.

Gebauer, H. Worch, H and Truffer, B. 2012. Absorptive capacity, learning processes and combinative capabilities as determinants of strategic innovation. European Management Journal, Vol. 30, pp.57-73.

Jimenez-Barrionuevo, M, Garcia-Morales, V. and Molina, L. 2011. Validation of an instrument to measure absorptive capacity. Technovation. Vol. 31, pp.190-202.

Lichtenthaler, U., 2009. Absorptive capacity, environmental turbulence, and the complementarity of organizational learning processes. Academy of Management Journal 52 (4), 822–846.

Murovec, N., Prodan, I., 2009. Absorptive capacity, its determinants, and influence on innovation output: cross-cultural validation of the structural model. Technovation 29, 859–872.

Todorova, G., & Durisin, B. (2007). Absorptive capacity: Valuing a reconceptualization. Academy of Management Review, 32(3), 774–786.

Volberda, H., Foss N. and Lyles, M. 2010. Perspective – absorbing the concept of absorptive capacity: how to realize its potential in the organization field. Organization Science Vol. 21,(4), pp. 931–951.

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One thought on “Video: What is absorptive capacity?”

  1. re: ‘They have pitiful or absent knowledge management structures
    They have a high turn-over of personnel’

    Personnel turnover begat lack of knowledge management structures… during my experience of my NGO during my 14 years. My own personal disorganization didn’t help matters.

    The best good fortune I had was to have recruited a retired librarian/teacher who organized 7 or 8 full size file cabinets worth of files that were previously strewn about the office I inherited in various boxes and smaller file cabinets.

    And I refused to let her throw away anything on the conservation issues or organization had worked on since its inception in 1968 unless it was a duplicate copy.

    That was in 1988. About 9 – 10 years later, we launched a lawsuit on a national park issue against the Canadian government, and I was able easily find a file from late 1970s that proved we had *standing* because we had evidence we’d worked on protecting that particular park for decades.

    And ugh! do your posts ever make me feel my age sometimes.

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