Tag Archives: dynamic capabilities

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.

Deliberate Learning and the Evolution of Dynamic Capabilities

Ooh yeah!!! Academia that is useful!!

Zollo, M and Winter, S. 2002. Deliberate learning and the Evolution of Dynamic Capabilities. Organization Science, Vol. 13, (3), pp.339-351.

This fantastic article talks about

“the role of (1) experience accumulation, (2) knowledge articulation, and (3) knowledge codification processes in the evolution of dynamic, as well as operational, routines.” (Zollo and Winter, 2002: 339)

You can have lots of experience, but if you don’t think about it, it isn’t learning.  There’s that anecdote about someone saying to Shane Warne “Well, Monty Panesar is getting some experience – he’s played 30 tests” and Warne saying “No, he’s played the same Test thirty times”.  Ouch.

Zollo and Winter are modifying the concept of ‘dynamic capabilities‘ a bit, away from it only happening in conditions of rapidly changing environments to a more conscious effort (“deliberate learning”!)

Teece et al. (1997) define the concept of “dynamic capabilities” as “the firm’s ability to integrate, build, and reconfigure internal and external competencies to address rapidly changing environments” (p. 516). While this suggests something of what dynamic capabilities are for and how they work, it leaves open the question of where they come from. Also, the definition seems to require the presence of “rapidly changing environments” for the existence of dynamic capabilities, but firms obviously do integrate, build, and reconfigure their competencies even in environments subject to lower rates of change. We propose the following alternative:

DEFINITION. A dynamic capability is a learned and stable pattern of collective activity through which the organization systematically generates and modifies its operating routines in pursuit of improved effectiveness.
(Zollo and Winter, 2002: 340)

They are interested in the mechanisms of “collective Competence

We therefore direct attention to a second mechanism of development of collective competence, the process through which implicit knowledge is articulated through collective discussions, debriefing sessions, and performance evaluation processes.
(Zollo and Winter, 2002: 341)

They put forward the proposition that

” Dynamic capabilities emerge from the coevolution of tacit experience accumulation processes with explicit knowledge articulation and codification activities.”
(Zollo and Winter, 2002: 344)

They have some good words of warning for the timing of codification –

First, codification should aim at developing and transferring “know why” as well as “know how.” We have emphasized that codification efforts provide an occasion for valuable efforts to expose action-performance links. Aiming at process prescriptions alone forfeits this advantage and in- creases risks of inappropriate application. Second, codification efforts should be emphasized at an appropriate time in the course of learning. Attempted prematurely, codification efforts risk hasty generalization from limited experience, with attendant risks of inflexibility and negative transfer of learning.
(Zollo and Winter, 2002: 349)

But look The trouble is, that learning – knowledge acquisition, codification and then (which they don’t really talk about) overthrowing/massively modifying zombie repertoires – is a painful and disruptive process.  And if there is no selection pressure, because you basically live in the Smugosphere– then the chances of actual learning are pretty damn low.

 

There’s heaps of great stuff in this article, and I will be raiding it for various purposes as the carbon accumulates and the window of opportunity shrinks.  #carpethediems