Absorptive Capacity and Information Systems Research: Review, Synthesis, and Directions for Future Research

Abstract

Absorptive capacity is a firm's ability to identify, assimilate, transform, and apply valuable external knowledge. It is considered an imperative for business success. Modern information technologies perform a critical role in the development and maintenance of a firm's absorptive capacity. We provide an assessment of absorptive capacity in the information systems literature. IS scholars have used the absorptive capacity construct in diverse and often contradictory ways. Confusion surrounds how absorptive capacity should be conceptualized, its appropriate level of analysis, and how it can be measured. Our aim in reviewing this construct is to reduce such confusion by improving our understanding of absorptive capacity and guiding its effective use in IS research. We trace the evolution of the absorptive capacity construct in the broader organizational literature and pay special attention to its conceptualization, assumptions, and relationship to organizational learning. Following this, we investigate how absorptive capacity has been conceptualized, measured, and used in IS research. We also examine how absorptive capacity fits into distinct IS themes and facilitates understanding of various IS phenomena. Based on our analysis, we provide a framework through which IS researchers can more fully leverage the rich aspects of absorptive capacity when investigating the role of information technology in organizations. 1

How and why Organisations Use Social Media: Five Use Types and their Relation to Absorptive Capacity

“…4 In summary, one of the notable findings of our study is that certain use types (but not others) support the processes through which organisations absorb (identify, transform and exploit) new external knowledge. Through this support of absorptive capacity, social media use contributes positively to the organisation's performance (on the relation of absorptive capacity and organisational performance see Zahra and George, 2002;Lane et al, 2006;Helfat et al, 2007;Flatten et al, 2011;Roberts et al, 2012). Although this claim of the positive impact of social media use has been made by trade press and consulting companies (e.g., The Economist, 2010; McKinsey Global Institute, 2012), the analysis provided in this paper qualifies the claim (by discussing that what is critically important for organisations is not social media use per se but rather the use of particular social media use types for particular purposes).…”

Using alternative scales to measure knowledge sharing behavior: Are there any differences?

“…For example, Roberts, Galluch, Dinger, and Grover (2012) identified the AC having a mediating role in the relationship between knowledge sharing and organizational performance. Liao et al (2007) found that the relationship between KSB and the capacity for IN is completely mediated by AC.…”

Absorptive capacity, organizational antecedents, and environmental dynamism

“…As an organizational capability, data integration provides seamless and consistent access to a firm's knowledge base (i.e., what the firm knows regarding customers, markets, emerging technologies). In doing so, data integration makes it easier for organizational members to identify, assimilate, and apply valuable external knowledge toward opportunities for innovation and competitive action (Roberts, Galluch, Dinger, & Grover, 2012). Yet although data integration may influence a firm's ability to absorb knowledge, firms often create greater value when they combine data integration capabilities with complementary organizational capabilities (Bharadwaj et al, 2007;Tanriverdi, 2006).…”