In order to be able to seize the opportunities that a dynamic operating environment opens up, entrepreneurial firms have to reconfigure their existing asset base and processes. This study explores the effect of an entrepreneurial orientation and a firm's reconfiguring capabilities on international performance by using survey data from 217 manufacturing and service organizations. Our findings indicate that a firm's entrepreneurial orientation and reconfiguring capabilities have an effect on its international performance and provide empirical support for the dynamic capability view of the firm. Entrepreneurial behavior combined with organizational reconfiguring capabilities constitutes a potential source of competitive advantage. Copyright Springer Science + Business Media, Inc. 2005entrepreneurial orientation, dynamic capabilities, international performance,
PurposeKnowledge‐based assets and organizational learning capabilities are recognized to be critical for firm's innovation activities. The process of creating new knowledge requires acquiring useful data and information, and utilizing it effectively in its internal innovation activities. To manage external knowledge, firms need absorptive capacity. The purpose of this study is to present the concept of the firm's absorptive capacity as a multidimensional, dynamic construct consisting of capabilities for organizational knowledge processing.Design/methodology/approachThe paper draws on results from a large‐scale survey. The empirical data used in the study comprises of 217 Finnish firms from seven different industry sectors. The hypotheses were tested by means of hierarchical linear regression analysis.FindingsThe results of the empirical tests give some support to the view that it is not only the firm's knowledge stock but also its knowledge flows that are crucial for sustaining innovative performance. The regression estimation shows that knowledge‐utilization capabilities were reflected in the firm's innovative performance.Research limitations/implicationsAs the data used in the study was cross‐sectional, the causal relationships and the sustainability of innovative performance cannot be captured. Avenues for further research include the interaction between the firm's knowledge base, knowledge processes and innovativeness.Practical implicationsThis study emphasizes the importance of the firm's ability to utilize and renew its knowledge base effectively. In order to utilize externally generated knowledge, firms need an ability to internalize it and then combine the information and new insights with the existing knowledge base.Originality/valueAs only little empirical research has been conducted on the impact of knowledge‐processing capabilities on the firm's innovative performance, the empirical evidence reported here makes a valuable contribution in this highly important area.
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