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The paper aims to understand how individuals differ in individual absorptive capacity – their ability to recognize, assimilate, transform and exploit external knowledge. These individual absorptive capacities are a key knowledge management building block for an organization’s open innovation practices. The study examines individual antecedents – human capital, social capital and cognition – and innovation outcomes of individual absorptive capacity.

This is a quantitative study of 147 employees in a single medium-sized Dutch industrial firm. Based on a survey and structural equation modeling, the antecedents’ prior knowledge diversity, network diversity and cognitive style are examined in relation to individual absorptive capacity. Further, the mediating effects of individual absorptive capacity on its antecedents and innovation outcome are investigated.

The main findings are that prior knowledge diversity, external network diversity and a bisociative cognitive style explain differences in individual absorptive capacity. A bisociative cognitive style appears to be the most important factor. Also, this study finds that individual absorptive capacity mediates between its antecedents and individual innovation performance and is therefore a relevant factor to capture value from external knowledge sources.

The study extends open innovation theory by exploring individual-level factors that explain the ability to capture value from external knowledge. It suggests that differences in open innovation practices are explained by heterogeneity at the individual level. Further, it explains how individuals’ potentials for open innovation are mediated by their absorptive capacities. These insights enable future researchers to further examine individual-level factors in knowledge management practices and to explore cross-level individual-organizational interactions for open innovation.

This paper highlights that individuals’ engagements in open innovation practices are explained not only by individuals’ motivations but also by their abilities to absorb external knowledge. Further, it helps managers to design knowledge management practices to promote employees’ absorptive capacities, to improve open innovation processes.

This study investigates the neglected individual-level factors of open innovation practices from a micro-foundational and knowledge management perspective. To our best knowledge, this is the first study to examine individual-level antecedents and outcomes of individual absorptive capacity.

This study aims to address the relevance of the mediating role of the relative absorptive capacity (ACAP-R) in the relation between absorptive capacity and innovation, contributing to a better understanding of innovation in a business network. Participants’ firms in this study are part of the supply network of an automotive cluster.

The study is developed in 225 companies that are part of the supply network of an automotive cluster in Mexico. A survey was applied to key firm informants who had been involved on processes of innovation, quality or continuous improvement. During data analysis, structural equation modeling was implemented with the support of SmartPLS 3.0 to understand the mediation role of relative absorptive capacity as a novel insight of innovation in a Mexican cluster.

The results demonstrate the partial mediator role of the ACAP-R among the absorptive capacities and the level of innovation of the companies that make up the network studied. The findings represent an approach to the understanding of one of the key dynamic capacities in the innovation process and, thus, to the competitiveness of organizations, which has scarcely been studied from the perspective of business networks.

The limitations of the research focus on the fact that the source of information in the surveys comes, in most cases, from the opinion of a key informant per unit surveyed, which is why there is a certain margin of subjectivity that could be reduced if there is more than one source of information in the same organization. It is also considered important that the information offered by the suppliers could be complemented by the opinion of clients. This would provide a more complete view of the circularity of information involved in inter-organizational exchanges.

The findings provide useful insights not only in terms of understanding the link between absorptive capacity and innovation, but also how to improve levels of innovation through knowledge exchanges that occur during the participation of suppliers and customers in a business network. Firms with high levels of ACAP are more likely to recognize the opportunity to benefit from external knowledge and to participate intensely in collaborative efforts. That is, technological similarity or similar knowledge base between source or recipient firms impacts their innovation.

The purpose of this paper is to empirically investigate the impact of organizational intellectual capital (IC) components on absorptive capacity (ACAP) such as potential absorptive capacity (PACAP) and realized absorptive capacity (RACAP). Furthermore, it attempts to investigate the mechanism through which PACAP and RACAP jointly influence innovation strategies (i.e.) exploitative and exploratory innovations.

This is an explanatory research using a deductive approach. This study uses survey data from 184 manufacturing export firms analyzed through partial least squares structural equation modelling.

The results have found that the cognitive and social capital of a firm positively affects PACAP and RACAP, whereas relational capital has a significant effect on RACAP. Moreover, the study reveals that both potential and realized absorptive capacities considerably lead to the development of organizational exploitative and exploratory innovation strategies.

The research focused on two driving factors, i.e. IC components and ACAP dimensions, and overlooked how each component of IC and ACAP influences ambidextrous innovative strategy.

Providing managers with insights about the critical role of developing IC to facilitate the transfer and exchange of crucial absorptive capacity necessary for ambidextrous innovative strategy.

This study makes a significant contribution to the existing literature by highlighting the importance of ACAP and provides useful insights for firms in developing economies to improve their exploitative and exploratory innovation capability. This study likewise reveals the significance of the four dimensions of IC, which can facilitate bringing in knowledge from developing economies.

Absorptive capacity being an emerging field of research has been studied in different perspectives both in technological aspects and soft issues. Although an original study of absorptive capacity placed employees as playing pivoting role in the development of absorptive capacity (Cohen and Levinthal, 1990), unfortunately, there are limited studies on behavior of employees toward this emerging construct. This study aims to explore the impact of employees’ behavior in the development of absorptive capacity. Specifically, impact of knowledge sharing, learning adaptability and organizational commitment on absorptive capacity has been evaluated in this study.

This cross-sectional study was conducted at the pharmaceutical firms of Pakistan. The data were collected through random sampling from middle managers as a unit of analysis of this study. The rationale of the unit of analysis is that the maximum information is handled/accessed by the middle managers in the perspective of Pakistan. The data were collected from 170 respondents on a five-point Likert scale with the response rate of 66.7 per cent. Data were collected from different genders and different age groups with different qualification levels.

All independent variables showed significant positive correlations with overall absorptive capacity (ACAP). At the same time, different relationships of all independent variables were found in different ways with different significant levels. The results showed that different strategies may be adopted to manage the external knowledge for competition in turbulent environment. For example, organizational commitment may be incorporated at strategy formulation only, whereas the Adaptability at both routine and strategy formulation stage. As all independent variables showed no correlation with Acquisition it is concluded that Acquisition is purely a routine function, and instead of coordination, the routine processes must be emphasized.

This study focused on the data from the middle managers of the pharmaceutical firms only. The results may not be generalized to the sectors. Another limitation is that the respondents of the study were middle managers. It was made intentional to see the impact of management aspects other than organizational mechanisms, as discussed by Cohen and Levinthal (1990) and Jansen et al. (2005) in their studies. The results on the basis of the data collected from other entities of the organization may differ. This is a cross-sectional study, and a longitudinal study may give different results.

Absorptive capacity has the capability to absorb new knowledge and plays an important role in the development of organizational processes to compete in the turbulent environment. It is dependent not only on technological infrastructure but also on the employees’ behaviors and attitudes. This study gives insights about the knowledge process activities and employment of human resource at each phase of absorptive capacity in relation to their behaviors toward knowledge process.

Development of organizational process with knowledge management plays an important role in the capacity building, which ultimately enhances social paradigm of activities.

Pharmaceutical companies in Pakistan acquire technologies from foreign countries and have very limited research and development of their own. As technology is upgraded by the foreign companies as a continuous improvement process, local firms of Pakistan are required to absorb the new knowledge with the same pace. The study highlights importance of human capital in the development of this capability.

Contemporary frameworks on institutional theory and corporate environmentalism observe that institutional fields positively influence a firm’s environmental response in the form of implementation of environmental practices. These frameworks, however, provide little evidence on why firms facing similar institutional field differ in their environmental response. This paper aims to incorporate the intra-organizational dynamics within the traditional institutional theory framework to address this heterogeneity, examining specifically the role of absorptive capacity for environmental knowledge in the organizational implementation of corporate environmental practices.

Integrating the institutional theory and resource-based view, this paper examines the mediating role of absorptive capacity in the relationship between institutional pressure for corporate environmentalism vis-a-vis the implementation of corporate environmental practices. Partial least square structural equation modeling was used for hypotheses testing based on data obtained from the Indian apparel and textile industry.

The results support the mediating role of absorptive capacity in the relationship between institutional pressure and implementation of corporate environmental practices. Further, this study highlights the importance of acquisition and utilization of environmental knowledge in driving environmentalism through developing absorptive capacity; the findings also suggest that the role of institutional pressure in the implementation of environmental practices should not be analyzed in isolation but rather in conjunction with the development of absorptive capacity that forms the internal basis of implementation.

Managers need to focus on the development of organizational capabilities for acquiring and exploiting environmental knowledge to complement their preparedness in responding to any institutional pressures for environmental sustainability. Firms also need to link their environmental orientation with various sources of environmental knowledge and capabilities residing outside the organizational boundaries. It is important to note here that the development of absorptive capacities for the exploration and exploitation of external knowledge is indeed both required and necessary to build sustainable organizational capabilities.

This paper is among the very few studies that address the issue of knowledge and development of related organizational capabilities for corporate environmentalism. Recognizing that environmental knowledge resides outside organizational boundaries with regulatory agencies and special interest groups, this paper highlights the importance of developing organizational capabilities for the acquisition and exploitation of environmental knowledge.

This study investigates the development of absorptive capacity. Using an integrated cognitive learning perspective, this study provides empirical evidence about the conceptual absorptive capacity model through examining the full process step by step. Two groups of moderating variables were studied—namely, social integration and appropriability—to examine their impact on the process.

This study employed a longitudinal study from a community service program (Kuliah Kerja Nyata) at Universitas Gadjah Mada, Yogyakarta, Indonesia, by using surveys at the beginning and the end of the project. Of 492 teams from 2,444 students participated in the study. Each individual within a team had at least one project assigned to him/her during the project. The absorptive capacity process was examined through six consecutive models and analysed using hierarchical linear modelling. The moderating variables were tested using the Moderated Regression Analysis and Wald tests.

The study confirms the full cycle of absorptive capacity as an independent, dynamic and complex process; it involves acquiring, assimilating, transforming and exploiting sequencing variables from the individual level to the team level and vice versa using feed-forward and feedback mechanisms adopted from the 4I framework of organisational learning. However, the roles of the moderating variables are still inconclusive due to some possible factors, which were also reflected by the U-phenomenon.

This study provides vital support to the learning theory as well as to the organisation learning concept. This study also reveals empirical evidence about the unsupported moderating variables behave during a project cycle, such as what they function, how they evolve and what we should do about the moderating factors during a project. The findings of this study provide practical suggestions and highlight areas for future research.

The purpose of this study is to empirically examine the direct effect of extra-industry network (EIN) and organization–stakeholder relationships (OSR) on absorptive capacity (ACAP). In addition, this study explored indirect effects of EIN and OSR on performance through ACAP among small- and medium-sized enterprises (SMEs) in Oman by considering the moderating role of big data analytics (BDA) outsourcing.

This study utilized quantitative method through survey questionnaire. The hypotheses were tested with a sample size of 202 surveys completed by SME owners. Partial least squares-structural equation modeling (PLS-SEM) was administered to analyze data via the SmartPLS 4.0 software.

The analysis revealed that EIN and OSR had an indirect effect on performance through ACAP, while propensity to outsource BDA was found to have a positive moderating role between EIN and performance. Interestingly, propensity to outsource BDA was found to have a negative moderating influence on the relationship between ACAP and performance.

This research is beneficial for entrepreneurs who wish to learn about the specific intangible resources significant for venture growth, to devise effective strategies to expand their EIN and OSR and to consider the significance of the correlations established in this study through ACAP. The result also assists managers in a way that the propensity to outsource BDA strengthens the positive effect of EIN on performance and weakens the positive effect of ACAP on performance.

This research appears to be among the first empirical studies that attempt to provide insights into the importance of ACAP as the key mechanisms to transform the advantages of EIN and OSR to enhance performance by considering the moderating role of propensity to outsource BDA.

Existing research on knowledge management processes (KMPs) and absorptive capacity (ACAP) is primarily conceptual and descriptive in nature, and empirical research confirming the real impact of KMPs when developing ACAP is lacking. Furthermore, the relationship between ACAP and organizational performance (OP) has not been adequately studied. Hence, the purpose of this paper is to introduce a comprehensive, delineated and integrated conceptual model which encompasses KMPs, ACAP and OP. Then, an empirical investigation is undertaken to test the relationships among the proposed study model variables.

In total, 245 questionnaires were useable. Partial least square 3.3.3 is utilized to examine the validity of the measurement model and test the hypotheses.

The findings of this study suggest that KMPs influence ACAP and ACAP affects OP. Finally, the results show that KMPs affect OP directly and indirectly through ACAP (mediator).

The results of this study help managers to ascertain the managerial practices that can be employed as well as determine the level of effort and resources necessary to enhance ACAP. Additionally, managers should shed additional light on the ACAP's positive implications for OP.

This study focuses on the conceptualization of KMP and empirically tests the effect of these individual processes on ACAP and on OP. Finally, the relationship between KMPs and OP, although implied, needs to be addressed empirically in the research literature through utilizing ACAP as mediator between KMPs and OP, this appears to be the first study to try to achieve this main objective.

The purpose of this article is to study the moderating effect of absorptive capacity, defined as the set of organizational routines and processes through which companies acquire, assimilate, transform and exploit knowledge to produce a dynamic organizational capacity (Zahra and George, 2002), in three strategic orientations: market orientation; technology orientation and entrepreneurial orientation and their positive relationship in the performance of the medium and large Mexican manufacturing firms. Likewise, it is determined whether these three combined SOs influence firm performance.

The data was collected from 171 medium and large-sized Mexican manufacturing firms. The proposed hypotheses are tested using partial least square structural equation modeling (PLS-SEM).

Despite the importance of knowledge for the development of firms, the results indicate that the moderating effect of absorptive capacity is only present in the relationship between entrepreneurial orientation and firm performance. That is, firms cannot take advantage of knowledge simultaneously between the three strategic orientations. For their part, market orientation and entrepreneurial orientation exert a positive influence on firm performance.

The main practical implication for the manufacturing industry is that they must develop mechanisms to detect what kind of knowledge affects each strategic orientation, in this way it can make the absorptive capacity influence the relationships between SO and FP.

The main contribution consists of studying the moderating effect of the absorptive capacity on the relationship between three strategic orientations and firm performance, and not concentrating solely on the simultaneous use of these strategies as is commonly done.

This chapter investigates the antecedents to the development of the three components of subsidiaries’ absorptive capacity (ACAP): recognition, assimilation and application of transferred knowledge in the context of the vertical flow of social and environmental accounting and reporting (SEAR) knowledge from the HQ to acquired subsidiaries. Our analysis is based on an embedded multiple case study of a UK-based MNC, informed by 44 semi-structured interviews and capitalising on agency theory and socialisation theory. Prior knowledge is not a sufficient explanation to the development of ACAP but it is also dependent on organisational mechanisms that will trigger the learning processes. Depending on the nature and degree of the social, control and integration mechanisms, the effects of prior stocks of knowledge on ACAP may vary. Our propositions only hold for one direction of knowledge transfer. The study is based on an embedded multiple case study in one sector which restricts its generalisation. It excludes the specific relationships between the three ACAP learning processes and the existence of feedback loops. Our findings suggest that the HQ’s mix of social, control and integration mechanisms should account for initial stocks of SEAR knowledge. The contribution lies in uncovering the interaction between heterogeneous levels of prior knowledge and organisational mechanisms deployed by the HQ fostering ACAP. We address emerging issues regarding the reification of the ACAP concept and highlight the potential of agency theory for informing studies on HQ-subsidiary relations.