Absorptive Capacity Perspective Research Articles

What determines performance of cross‐border M&As by Chinese companies? An absorptive capacity perspective

AbstractChinese companies are increasingly using cross‐border merger and acquisitions (M&As) as a vehicle to source knowledge or strategic assets, so as to enhance their competitive advantage. However, a critical question is: Can strategic assets be effectively acquired by Chinese firms, thereby leading to superior firm performance? This article addresses this fundamental question from an absorptive capacity perspective. This approach concentrates on how an acquiring firm's absorptive capacity influences its ability to identify, assimilate, integrate, and apply external new knowledge into commercial use. By comparatively examining two high‐profile international M&A deals completed by leading Chinese firms Lenovo and TCL, we argue that the performance of Chinese companies' overseas acquisitions is substantially affected by the acquiring firm's absorptive capacity at multiple dimensions, thus drawing strategic implications for multinationals in other emerging markets. © 2010 Wiley Periodicals, Inc.

An exploratory study of Principal Investigator roles in UK university Proof-of-Concept processes: an Absorptive Capacity perspective

The increasing emphasis on academic entrepreneurship, technology transfer and research commercialisation within UK universities is predicated on basic research being developed by academics into commercial entities such as university spin-off companies or licensing arrangements. However, this process is fraught with challenges and risks, given the degree of uncertainty regarding future returns. In an attempt to minimise such risks, the Proof-of-Concept (PoC) process has been developed within University Science Park Incubators (USIs) to test the technological, business and market potential of embryonic technology. The key or the pivotal stakeholder within the PoC is the Principal Investigator (PI), who is usually the lead academic responsible for the embryonic technology. Within the current literature, there appears to be a lack of research pertaining to the role of the PI in the PoC process. Moreover, Absorptive Capacity (ACAP) has emerged within the literature as a theoretical framework or lens for exploring the development and application of new knowledge and technology, where the USI is the organisation considered in the current study. Therefore, the aim of this paper is to explore the role and influence of the PI in the PoC process within a USI setting using an ACAP perspective. The research involved a multiple case analysis of PoC applications within a UK university USI. The results demonstrate the role of the PI in developing practices and routines within the PoC process. These practices and processes were initially tacit and informal in nature but became more explicit and formal over time so that knowledge was retained within the USI after the PIs had completed the PoC process.

Learning processes in municipal broadband projects: An absorptive capacity perspective

Effective knowledge management is important to the success of information technology projects. This research applies the integrated lens of the absorptive capacity theory and the social process model of information system development projects to examine the dynamic of knowledge activities concerning broadband infrastructure development in the context of municipal broadband networks. The research questions are: (1) What is the extent of the dynamic of knowledge activities involved in the development process?, (2) What are the events that trigger knowledge activities in municipal broadband development?, and (3) How does a city create and utilize new knowledge in the development process? This study examines municipal wireless projects in three cities (Chaska, MN; Hermosa Beach, CA; and Fredericton, Canada). Events that trigger knowledge activities are assignment of personnel, physical system construction, performance problems, resistance, and reassignment of organizational roles. Four factors that influence knowledge activities and project performance are the dynamic of technology development, partnership commitments, limitation of external knowledge and learning-by-doing, and political dynamics. The study has policy implications for cities that are in the process of planning and deployment. A good project planning, user expectation management, systematic performance evaluation, a careful partner selection process, and the use of service level agreements are important to project success. In addition, cities need to take into consideration that the technology is not a plug and play technology and that considerable efforts are needed to integrate the technology with other solutions to deliver broadband services as well as to configure the system according to topologies, street conditions, buildings, density of trees, among others.

Technological capability, strategic flexibility, and product innovation

AbstractThis paper examines the role of technological capability in product innovation. Building on the absorptive capacity perspective and organizational inertia theory, the authors propose that technological capability has curvilinear and differential effects on exploitative and explorative innovations. The findings support the proposition that though technological capability fosters exploitation at an accelerating rate, it has an inverted U‐shaped relationship with exploration. That is, a high level of technological capability impedes explorative innovation. Strategic flexibility strengthens the positive effects of technological capability on exploration, such that when strategic flexibility is high, greater technological capability is associated with more explorative innovation. Copyright © 2009 John Wiley & Sons, Ltd.

Evolving knowledge integration and absorptive capacity perspectives upon university‐industry interaction within a university

Purpose – The purpose of this paper is to report upon an initiative within a case study UK university to facilitate service innovation in small firms. The paper aims to outline how explicit use of such concepts has the potential to enhance the effectiveness of this form of university‐industry interaction.Design/methodology/approach – The paper considers how an evaluative inquiry approach could be used to assess the contribution of explicit consideration of knowledge integration and absorptive capacity in university‐industry interaction.Findings – The paper reveals how the study has been constructed and how the planned use of personal reflective tools and structured group interactions may enhance the consideration and utilisation of the key concepts by the university and SME clients.Research limitations/implications – The paper brings a degree of theorising upon university‐industry interaction that is largely absent in reported studies. It adds to the knowledge/cognitive perspective upon small business sup...

Proof of concept processes in UK university technology transfer: an absorptive capacity perspective

Successful research commercialisation within the university domain is predicated upon basic research being developed into technology that will attract funding, ultimately resulting in entities such as University spin‐out companies or licensing arrangements. This development process involves considerable risk and uncertainty and may require substantial resources to fund early stage operations while returns are uncertain. Hence there is a need to explore risk‐minimisation approaches relating to proving the potential for development while concurrently allocating resources in an incremental manner. This paper focuses on the development of the Northern Ireland Proof of Concept (PoC) process within a University Science Park Incubator (USI) as a particular approach to addressing these challenges inherent in the United Kingdom University technology transfer. Furthermore, Absorptive Capacity has emerged in the literature as an appropriate theoretical framework or lens for exploring the development and application of new technology. Therefore, the aim of this paper is to explore the PoC process within a USI as a means for improving the commercialisation of University technology transfer using an Absorptive Capacity perspective. A multiple case analysis of PoC applications within a UK university is described. From the findings it emerges that Absorptive Capacity influencing factors such as levels of R&D investment, prior knowledge base and integration of stakeholder and technology planning all impact on PoC outcomes. In addition a number of process improvement areas for PoC are identified in relation to the influencing factors within the Absorptive Capacity framework.

Conflict-coordination learning in marketing channel relationships: The distributor view

Although a fairly large body of literature exists on channel conflict management, little research has been done from an interorganizational conflict-learning perspective. This study explores how channel members can use conflict-coordination learning (CCL), as a conflict resolution mechanism, which leads to improved capabilities, which in turn can enhance co-created value in marketing channel relationships from a distributor point of view. Drawing on both a resource-based view of the firm, an absorptive capacity perspective, and an interorganizational learning approach, we propose that conflict values (positive conflict attitudes and avoidance of conflict behaviors) can be viewed as firm resources that directly influence CCL, which in turn can enhance co-created value (joint marketing strategy quality and joint profit performance). To explore these issues, we developed and tested our hypotheses with data from 101 distributors within the food industry in Taiwan. As predicted, we find that positive conflict attitudes are positively related to CCL, and that avoidance of conflict behaviors is negatively related to CCL. Furthermore, the results indicate that joint marketing strategy quality mediates the relationship between CCL and joint profit performance. Specifically, under high positive conflict attitudes, CCL strongly appears related to joint marketing strategy quality.

Absorptive Capacity of Information Technology and Its Conceptual Model

In order to examine the problem of how to improve the use of information technology (IT) in enterprises, this paper makes an exploration from the perspective of organizational absorptive capacity. We propose the concept of IT absorptive capacity from an organizational level. A dynamic process model is developed to further analyze IT absorption. IT absorptive capacity of this process is embodied as six forms: identification, adoption, adaptation, acceptance, infusion, and knowledge management. By means of questionnaire surveys of 76 Chinese enterprises, the main factors that favor or disable the capacity of each stage are discovered. Using the method of system dynamics, a conceptual model of IT absorptive capacity is developed to analyze the action mechanism of the factors in detail. The model indicates that the critical factors are embodied in the aspect of management. Furthermore, it demonstrates that IT absorption is a spiral process, during which IT absorptive capacity evolves dynamically and, consequently, promotes IT use.

Self-Managing Team Activity from Absorptive Capacity Perspective

Self-Managing Team Activity from Absorptive Capacity Perspective

Science intelligence capability and innovation performance: an absorptive capacity perspective

This study examines the link between a firm's science intelligence capability, and the quantity and value of the patents that it produces. Modelling absorptive capacity as an innovation knowledge funnel, we propose that a firm's science intelligence capability rests on two sets of processes: managing its potential absorptive capacity (PACAP) and managing its realised absorptive capacity (RACAP). Measuring PACAP as the breadth of a firm's scientific activities and RACAP as its ability to identify and abandon poor performing areas of science, we test our theory using a sample of US and non-US firms in the chemical, electronics, and pharmaceutical industries. Moderate to strong support is found for our hypotheses.

Knowledge management as an organisational innovation: an absorptive capacity perspective and a case study

The global economy is in the midst of sweeping economic and social transformations, where knowledge has replaced physical labour and natural resources as the key source of sustained growth. At the organisational level, a knowledge advantage is widely considered a sustainable source of competitive advantage. However, managing knowledge requires a complex combination of new tools, infrastructures, processes, strategies, and their coexistence and integration with the existing ones. Whether at the top of a CEO's agenda or considered a faddish practice, knowledge management (KM) is both compelling and overwhelming. This paper examines the implementation of KM from an absorptive capacity perspective. A case study is presented to illustrate how the framework can be used to assess the importance of an organisation's familiarity with KM principles, techniques, and strategic value; and whether it has the required learning capabilities to successfully adopt and implement KM.