Absorptive Capacity Capability Research Articles

The Intervening role of Absorptive Capacity in the Nexus of Effectual Actions and Performance in Small Businesses

Purpose: This study interrogates the interfering role of absorptive capacity in the relationship between the effectual actions of small businesses and their performance.
 Design/methodology/approach: Structured questionnaires were used to generate primary data from 685 small businesses from a variety of sectors in South Africa. The data was used to interrogate the hypothesized relationships using the partial least squares structural equation modeling technique.
 Findings: The findings report a significantly positive relationship between effectuation and small business performance. Further, it is revealed that absorptive capacity partially mediates the relationship between effectuation and small business performance.
 Research limitations/implications: The limitations of this study include the use of primary data from a sample of small businesses in South Africa and dependence on specific modeling techniques. The implications of this research provide a deeper understanding of the mediating effects of absorptive capacity on the relationship between effectual actions and small business performance.
 Practical implications: This study provides fresh insights into the mediating effects of the absorptive capacity capability of small businesses in the continuous interaction between their effectual actions and performance. As such, it highlights the connection between the growing theory of effectuation and existing theories in the field of management sciences. This study enables the emergence of knowledge that could spur small businesses to effectively navigate the endemic uncertainties prevalent in their contexts.
 Originality/value: This study contributes to the understanding of the role of absorptive capacity in the relationship between effectual actions and small business performance, thus adding value to the literature on small business management.
 Paper type: This research is empirical.

Activation triggers: reconceptualization and review

Purpose- Businesses depend more on knowledge than other factors. Many academics have described the idea of absorptive capacity as a skill for handling outside knowledge. Since organizational phenomenon is a complex , the issue of absorptive capacity as a strategic and dynamic capability still merits further research consideration. Previous research shows that some of the variables are beyond the firm's control and moderate the effect of knowledge source and experience on absorptive capacity. The intensity of the triggers may have an impact on the firm's investment in absorptive capacity capability. The purpose of this study is to review and identify endogenous and exogenous contingencies that function as activation triggers on absorptive capacity based on the previous literature. Methodology- The theoretical model, hypothesis, and measurement indicators for the study's variables are described in this paper. Findings- The study of previous research shows that learning organization structure, business environment, organizational leadership, learning culture, management review, and competitive strategy play roles as moderator activation triggers in this study. According to the findings, businesses face complex and unpredictable business environment changes, as well as significant knowledge gaps. Decentralized and dynamic structures with participation in decision-making have a moderating effect on the capacity to absorb knowledge and make it easier for businesses to absorb new ideas. The results show that organizational culture fosters the development of fresh perspectives and encourages the integration of external knowledge to maximize the benefits of complementary knowledge sources. Also, the competitive strategy defines the scope and context of perception and learning. Other activation triggers that require more investigation include information technology, stakeholders, professional conduct, and research and development units. Conclusion- Managers can explore a variety of strategic alternatives and forge competitive advantages for their companies by using activation triggers as a group of variables to upgrade existing talents and develop new capabilities of absorptive capacity. Keywords: Absorptive capacity, activation triggers, endogenous and exogenous contingencies, knowledge. JEL Codes: D83, L1, O32

Supply chain resilience to low-/high-impact disruptions: the influence of absorptive capacity

PurposeThe lean and global character of supply networks today opens supply chains to potential disruptions, especially in volatile environments. Most disruptions are of relatively low potential impact; however, firms also occasionally face high-impact disruptions that may even threaten survival. This study applies and extends absorptive capacity concepts to organize resilience capabilities identified in the literature and to examine whether capabilities that provide low-impact resilience are different from those that provide high-impact resilience. A second and related objective is to evaluate whether low-impact resilience supports high-impact resilience through “learning by experience.”Design/methodology/approachSurvey and industry data are used to understand capabilities involved with achieving both low-impact resilience and high-impact resilience.FindingsThe results of our analysis of survey and industry data uncover significant complex interactions in the effects of capabilities and volatility on resilience; suggesting that different absorptive capacity capabilities are related to low-impact resilience and high-impact resilience, respectively, and these effects depend on industry context. Moderating influences of exploitation capability and environmental volatility are consistent with a “learning by experience” explanation of the association of low-impact resilience to high-impact resilience.Originality/valueThis study thus provides a unifying framework with which to consider resiliency capabilities. Further, it answers a question raised in prior research, and it extends our understanding of important relationships between capabilities for different levels of resilience.

Developing process and product innovation through internal and external knowledge sources in manufacturing Malaysian firms: the role of absorptive capacity

PurposeFirms' knowledge-processing capabilities have a central role in achieving innovation performance and competitive advantage. Absorptive capacity capabilities and innovation are viewed as essential for enterprise success. Absorptive capacity is deemed as a highly important organizational capability to recognize value and assimilate both external and internal knowledge in order to enhance firm innovation. The aim of this study is to determine if innovation performance can be improved through absorptive capacity (knowledge acquisition, dissemination and utilization), when it is supported by internal (firm experience) and external knowledge sources (R&D cooperation and contracted R&D).Design/methodology/approachA quantitative methodology based on employing a structured questionnaire was used for data collection. The proposed research model and its associated hypotheses are tested by using Partial Least Squares (PLS) structural equation modelling (SEM) on a data set of 248 manufacturing companies located in the Northern Region of Malaysia.FindingsResults showed that firms' experience is significantly related to absorptive capacity, while for R&D cooperation and contracted R&D findings were mixed. In addition, absorptive capacity was found as a strong predictor of innovation performance.Originality/valueOne of the defining features of competition in many industries has been the extremely rapid pace of technological change, marked by a continuous stream of innovations. Manufacturing firms, therefore, face the challenge of nurturing existing knowledge and developing novel knowledge in order to create new business opportunities. This study makes valuable contributions with regard to understanding the behavioural of manufacturing firms towards process and product innovation.

Developing Absorptive Capacity Theory for Public Service Organizations: Emerging UK Empirical Evidence

AbstractA strong public policy focus on high performance means that utilizing management knowledge effectively is at a premium for UK public service organizations. This study empirically examined two English public agencies to explore the inter‐sectoral transfer of a strategic management model originally developed in the private sector – absorptive capacity – which is one way of conceptualizing an organizational competence in such knowledge mobilization. Two theoretical contributions are made. First, a new absorptive capacity framework for public service organizations is developed which recognizes the participation of public agency project teams during an innovation process proceeding over time with phases of co‐creation, testing, metamorphosis and diffusion. Second, our novel framework modifies an early influential model of absorptive capacity. Counter to this model, we argue that realized absorptive capacity requires agency from skilled and embedded actors to turn ‘curbing routines’ into ‘enabling routines’ in all four stages. Project (middle) managers have flexibility in their roles to seize episodic moments of opportunity to innovate and achieve service delivery goals, and to build absorptive capacity capability. Absorptive capacity capability develops organically over time. Future research directions are discussed.

Pursuing organisational learning using absorptive capacity capabilities and the role of IT Infrastructure in RFID system initiatives: a cluster analysis study

This study looks at firms' perceptions of the importance of absorptive capacity attributes in the deployment of Radio Frequency Identification (RFID) in a supply chain and their relationships with the firms' intentions to pursue supply chain process integration and Information Technology (IT) infrastructure support. Data for this pilot research study were collected using a survey questionnaire administered online to members of the Council of Supply Chain Management Professionals (CSCMP). Both the proposed hypotheses were supported in this study using the cluster data analysis procedure. The level of intention to cultivate absorptive capacity attributes, indeed, is positively associated with the level of intention to deploy both IT infrastructure integration and supply chain process integration.

Understanding Absorptive Capacity from a Network Perspective

The term absorptive capacity refers to the notion that firms may have differing capabilities to innovate and to recognise the value of new knowledge, assimilate it, and apply it to creating business value. Developing such capabilities often requires firms to become part of a value network. We therefore apply the notion of absorptive capacity to the level of both the firm, and the wider value network in that it is embedded. The purpose of this research is to understand how absorptive capacity process may be moderated by contingent factors so that a more complete picture of absorptive capacity development emerges from our research. We identify from the literature on learning, innovation, and networks several theoretical perspectives that may help researchers to understand how contingent factors may facilitate and/or inhibit the development of absorptive capacity capabilities. We offer a set of propositions that may guide research into learning and innovation in business networks, and we discuss the managerial implications of these propositions.