ABSORPTIVE CAPACITY FOR INNOVATION MANAGEMENT CONTROL: EMPIRICAL EVIDENCE FROM HYBRID PRODUCT-SERVICE BUNDLES

Abstract

This paper examines the antecedents and consequences of a firm’s absorptive capacity for innovation management control (ACIMC). Absorptive capacity, defined as an organisational-level capability to identify, assimilate, and exploit external knowledge, has predominantly been applied to technological knowledge. In this paper, we focus on external knowledge in relation to innovation management control (IMC), a management task that combines innovation management and management control. In addition, we apply our conceptualisation of ACIMC to the development of hybrid offerings, consisting of product and service components. Results of a survey among companies in Europe support our hypotheses that ACIMC (with four dimensions: Acquisition, assimilation, transformation, and exploitation) indirectly influences financial and innovation performance through hybrid product-service IMC. This paper ends with recommendations for innovation management practice and theory.