How Should Japanese Companies Build Absorptive Capacity at the Team Level? The Key Role of Gatekeeper and Combinative Capabilities

Abstract

Absorptive Capacity (ACAP) has been defined as a set of dynamic organizational routines and processes, by which firms acquire, assimilate, transform, and exploit knowledge. Since open innovation, especially inbound open innovation and coupled open innovation, needs teams to absorb external knowledge, ACAP is a prerequisite for open innovation. However, a multitude of Japanese companies have difficulty in building ACAP and there is little conceptual framing and empirical effort to find out the reason for a team's level. Therefore, this paper investigates what Japanese companies' teams should do to build ACAP for open innovation, with a focus on two key factors that influence ACAP: Gatekeeper and Combinative Capabilities. Based on an empirical study which focuses on a project team's business context in one of Japan's largest IT Service companies, this paper examines the actual conditions of gatekeeper and combinative capabilities, as well as the level of PACAP and RACAP in one project team of this company. The results suggest that a project team that has enough combinative capabilities and gatekeepers with sufficient ability and authority will likely have a high level of ACAP. This paper also suggests what Japanese companies' teams should do to develop combinative capabilities and how to support their gatekeepers.