Absorptive Capacity in the Software Industry: Identifying Dimensions That Affect Knowledge and Knowledge Creation Activities

Abstract

The ability of the firm to effectively use external knowledge (its absorptive capacity) is important to firm competitiveness and innovativeness. However, the wide array of approaches to studying absorptive capacity has obscured our understanding of what drives the effective use of external knowledge. The authors show that absorptive capacity is composed of mutliple dimensions: (a) the firm’s relationship to its external environment; (b) the structure, routines, and knowledge base of the main value creation group(s); and (c) individuals’ absorptive abilities. Their data illustrate that each of these dimensions contributes to increased knowledge or knowledge creation activities.

Competing Technologies in the Database Management Systems Market

“…On the other hand, more IT-savvy organizations can "cope" more easily with multiple DBMS because their absorptive capacity is likely to be higher (see, e.g. Cohen andLevinthal, 1990, Matusik andHeeley, 2005). We are looking for the net effect of these two conflicting forces by including the number of IT employees (as a proxy for the general IT intensity) and the number of IT developers (as proxy for the expertise in programming) in our regressions.…”

Antecedents and outcomes of breadth and depth of absorptive capacity: An empirical study

“…Relative absorptive capacity is a learning dyad-level construct, and the subjects of organization learning are divided as student firms and teacher firms Lane and Lubatkin (1998) A set of organizational routines and processes by which firms acquire, assimilate, transform, and exploit knowledge to produce a dynamic organizational capability, and absorptive capacity exists as two subsets of potential and realized absorptive capacities Zahra and George (2002) Source and process Composed of multiple dimensions: (a) the firm's relationship to its external environment; (b) the structure, routines, and knowledge base of the main value creation group(s); and (c) individuals' absorptive abilities Matusik and Heeley (2005) Process A firm's ability to utilize externally held knowledge through three sequential processes: (1) recognizing and understanding potentially valuable new knowledge outside the firm through exploratory learning, (2) assimilating valuable new knowledge through transformative learning, and (3) using the assimilated knowledge to create new knowledge and commercial outputs through exploitative learning Lane, Koka, and Pathak (2006) Process Composed of valuing, acquiring, transforming (assimilating) and exploiting knowledge, and it is series of management and process Todorova and Durisin (2007) Knowledge features 'Latitudinal absorptive capacity' is the firm's capacity to utilize scope, breadth, and diverse knowledge. 'Longitudinal absorptive capacity' is the firm's capacity to use unfamiliar or unrelated technological knowledge Vasudeva and Anand (2011) Knowledge features Breadth of absorptive capacity refers to the extent to which the knowledge contained in the firm's absorptive capacity is multifaceted and comprehensive in its coverage of a multitude of fields.…”

Antecedents of absorptive capacity: a new model for developing learning processes

“…Absorptive capacity has three levels, namely individual, collective and interorganisational (Matusik and Heeley, 2005). Cohen and Levinthal (1990) suggested focusing on the individual and organisational levels of AC as the impact of the antecedents of AC on its constructs, namely its learning processes, could be arguably different.…”

“…Individual AC can be turned into organisational AC through routines, structures and processes because they facilitate communication, and the sharing and transfer of individual knowledge (Cohen and Levinthal, 1990). Organisational features, such as structures and routines, positively influence a common understanding and the development of knowledge (Matusik and Heeley, 2005).…”