Relative absorptive capacity and interorganizational learning

Abstract

Much of the prior research on interorganizational learning has focused on the role of absorptive capacity, a firm's ability to value, assimilate, and utilize new external knowledge. However, this definition of the construct suggests that a firm has an equal capacity to learn from all other organizations. We reconceptualize the firm‐level construct absorptive capacity as a learning dyad‐level construct, relative absorptive capacity. One firm's ability to learn from another firm is argued to depend on the similarity of both firms' (1) knowledge bases, (2) organizational structures and compensation policies, and (3) dominant logics. We then test the model using a sample of pharmaceutical–biotechnology R&D alliances. As predicted, the similarity of the partners' basic knowledge, lower management formalization, research centralization, compensation practices, and research communities were positively related to interorganizational learning. The relative absorptive capacity measures are also shown to have greater explanatory power than the established measure of absorptive capacity, R&D spending. © 1998 John Wiley & Sons, Ltd.

Multinational Corporations at the Base of the Economic Pyramid: A Strategic Analysis Framework

“…In particular, the alliance literature has extensively applied this concept to explain inter-partner learning dynamics (e.g.,, Bayona Saez, Garcia Marco, and Huerta Arribas, 2001;Chen, 2004;Koza and Lewin, 1998;Lane and Lubatkin, 1998;Lane, Salk, and Lyles, 2001;Makri, 1999;Malhotra, Gosain, and El Sawy, 2005;Mowery, Oxley, and Silverman, 1996;Simonin, 2004).…”

“…and Singh, 1998; Lane and Lubatkin, 1998;Van den Bosch, Volberda, and De Boer, 1999;Zahra and George, 2002). Lane and Lubatkin (1998), for instance, highlight the difference between a firm's absolute ACAP, which allows the firm to learn from its external environment as a whole, and its relative ACAP in a given alliance, which allows it to learn from a specific partner.…”

“…Lane and Lubatkin (1998), for instance, highlight the difference between a firm's absolute ACAP, which allows the firm to learn from its external environment as a whole, and its relative ACAP in a given alliance, which allows it to learn from a specific partner. Similarly, Zahra and George (2002) draw a distinction between potential ACAP -the external knowledge that a firm could acquire and utilize -and realized ACAP -the external knowledge a firm has acquired and utilized.…”

“…While B2B alliances typically have objectives related to creating greater economic value for their partners (Lane and Lubatkin, 1998), cross-sector alliances tend to have objectives prioritizing the creation of social value through social innovation (Berger et al, 2004;LeBer and Branzei, 2010;Nelson and Zadek, 2000;Waddell and Brown, 1997;Waddock, 1991). Social innovation is "a novel solution to a social problem that is more effective, efficient, sustainable than existing solutions and for which the value created accrues primarily to society as a whole rather than to private individuals" (Phills, Deiglmeier, and Miller, 2008: 36).…”

“…Todorova and Durisin (2007) go on to argue that, after the firm acquires external knowledge, it can assimilate it, with little alteration if the new knowledge fits well with existing cognitive schemas, or with significant transformation of both the knowledge and cognitive schema if it doesn't. This rationale implies a higher ability to internalize new external knowledge when inter-partner overlap in terms of knowledge bases and knowledge processing systems is higher (Lane and Lubatkin, 1998).…”