Proceedings of the 12th European Conference on Knowledge ...

Evangelia Siachou, S<strong>of</strong>ia Daskou and Peter Yannopoulos
capacity performed by entrepreneurs. The paper proceeds to present a qualitative research design <strong>of</strong>
exploring <strong>the</strong> aforementioned relationship, and submits findings that support <strong>the</strong> conceptualization <strong>of</strong>
<strong>the</strong> researchers.
2. State <strong>of</strong> <strong>the</strong> art
The sections that follow address <strong>the</strong> ontology <strong>of</strong> absorptive capacity <strong>of</strong> managers that deal with
external knowledge acquisition, <strong>the</strong> MMs that mediate managerial learning and decision making and a
conceptual model that links <strong>the</strong> two concepts.
2.1 Dimensions <strong>of</strong> absorptive capacity
The conceptualization <strong>of</strong> and <strong>the</strong> rationale behind <strong>the</strong> significance <strong>of</strong> an organizations’ absorptive
capacity have been investigated by many scholars <strong>of</strong> <strong>the</strong> disciplines <strong>of</strong> strategic management (Lane
and Lubatkin, 1998; Nahapiet and Ghoshal, 1998), <strong>of</strong> innovation and technology management
(Schilling, 1998) as well as <strong>of</strong> <strong>the</strong> discipline <strong>of</strong> business administration in an international context
(Kadia and Bhagat, 1998), whilst references <strong>of</strong> this concept can be also made in <strong>the</strong> economic field
(Glass and Saggi, 1998). Their aim is to describe and analyse an organization’s ability to absorb
intangible assets (resources) which in turn consist <strong>of</strong> dynamic capabilities for those <strong>of</strong> <strong>the</strong>
organizations which have <strong>the</strong> ability to exploit <strong>the</strong>m effectively and efficiently. The absorptive capacity
<strong>of</strong> an organization has been studied in consistency with innovation and learning and applies mainly on
<strong>the</strong> organization’s ability to absorb and assimilate knowledge that is externally derived.
The term absorptive capacity has been initially introduced in <strong>the</strong> context <strong>of</strong> knowledge management
by Cohen and Levinthal (1990), who claim that absorptive capacity is <strong>the</strong> organization’s ability to
recognise <strong>the</strong> value <strong>of</strong> new knowledge, assimilate it and apply it to commercial ends. The results <strong>of</strong>
<strong>the</strong>ir study, which are found to be definitive, indicate that an organization’s ability to absorb knowledge
that is derived from various external sources significantly influences <strong>the</strong> decision making about <strong>the</strong>
investments in new technologies which <strong>of</strong>ten aim at <strong>the</strong> development <strong>of</strong> innovative projects.
The established term <strong>of</strong> absorptive capacity has also been identified with <strong>the</strong> investments on research
and development (R&D) which, firstly, require access to new knowledge repositories and, secondly,
acquisition and assimilation <strong>of</strong> new amounts <strong>of</strong> knowledge. Thus, <strong>the</strong> investments on <strong>the</strong> mere
acquisition <strong>of</strong> patents or on <strong>the</strong> imitation <strong>of</strong> innovative products and services <strong>of</strong>fered by <strong>the</strong>
competitors have not provided as best practices able to increase <strong>the</strong> organizational performance.
Hence, <strong>the</strong> effect <strong>of</strong> absorptive capacity on organizations’ performance outcomes has intrigued later
researchers in <strong>the</strong> field <strong>of</strong> innovation and learning who have modified <strong>the</strong> concept <strong>of</strong> absorptive
capacity in relation to <strong>the</strong> subject and <strong>the</strong> level <strong>of</strong> <strong>the</strong> analysis conducted each time (organizational,
unit, individual).
Specifically, Mowery and Oxley (1995) define <strong>the</strong> term absorptive capacity as <strong>the</strong> spectrum <strong>of</strong>
capabilities based on which an organization can effectively manage <strong>the</strong> tacit or salient knowledge that
is externally derived by implementing it on daily routine tasks and abilities. Behind <strong>the</strong> concept <strong>of</strong>
organizational learning <strong>the</strong>ory, absorptive capacity has been defined by Kim (1998) as a consequence
<strong>of</strong> an organization’s ability to learn to deal effectively with <strong>the</strong> problem solving process and
techniques. Whilst, Zahra and George (2002), present <strong>the</strong> bi-dimensional nature <strong>of</strong> an organization’s
absorptive capacity by distinguishing between <strong>the</strong> potential and realized absorptive capacity. The first
term refers to an organization’s ability to acquire and continually assimilate new knowledge sourced
on its external environment whilst <strong>the</strong> later relates to transformation and exploitation <strong>of</strong> <strong>the</strong> incoming
knowledge. In a more recent perspective, Todorova and Dursin (2007), present <strong>the</strong> multidimensional
nature <strong>of</strong> absorptive capacity adding also <strong>the</strong> contribution <strong>of</strong> powerful relationships in <strong>the</strong> effective
exploitation <strong>of</strong> <strong>the</strong> incoming knowledge to various organizational policies, practices and routine tasks.
According to <strong>the</strong> existing literature, <strong>the</strong> concept <strong>of</strong> absorptive capacity is multidimensional, while
simultaneously, it is significantly affected by a spectrum <strong>of</strong> factors, which are differentiated in relation
to <strong>the</strong> level <strong>of</strong> <strong>the</strong> analysis which take place each time (i.e. organizational, unit and individual level <strong>of</strong>
analysis). Apart from <strong>the</strong> dimensions as well as <strong>the</strong> different factors which have been identified ei<strong>the</strong>r
through <strong>the</strong> empirical research or conceptually, scholars in this field support that <strong>the</strong> prerequisite for
an organization to develop its ability to absorb knowledge that is externally derived is <strong>the</strong> knowledge
stock which has been sourced in various repositories. Various organizational repositories include
experience, capabilities as well as a common organizational language implemented in certain daily
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