The act or process of absorbing or the condition of being absorbed. Cohen and levinthal introduced the notion of absorptive capacity as the firms ability to value, assimilate, and apply new knowledge for improving organizational learning. Cohen and levinthal 1990 absorptive capacity a new perspective on learning and innovation administrative science quarterly volume 35 issue 1 pg 128 152. However, the way absorptive capacity is actually implemented in firms remains relatively poorly known. Absorptive capacity, technological innovation, and. Absorptive capacity was introduced by cohen and levinthal in 1990. Thus, absorptive capacity is the mechanism that makes external knowledge available to. Corporate culture, absorptive capacity and it success.
The concept of absorptive capacity was made popular by cohen and levinthal 1990 and according to them, absorptive capacity is the ability to recognize the value of new information, to assimilate it, and apply it to commercial ends. A new perspective on learning and innovation, authorwesley m. The original construct was introduced by cohen and levinthal in 1989. Absorptive capacity is a firms ability to identify valuable external knowledge, assimilate or transform this knowledge into the firms knowledge base, and apply this new knowledge through innovation and competitive actions cohen and levinthal 1990. Since the publication of cohen and levinthal s 1989 work on absorptive capacity, numerous theoretical and empirical studies have analysed firms capacity to absorb knowledge. A new perspective on learning and innovation wesley m. Despite the increase in literature on absorptive capacity, some ambiguity remains in determining the dimensions that shape the construct. Pdf connecting absorptive capacity and open innovation. A rereading of the seminal cohen and levinthal 1990 article in light of current research on learning and innovation directs our attention to serious ambiguities and omissions in zahra and georges reconceptualization. Their combined citations are counted only for the first article. Exploring the impact of empowering leadership on knowledge. Cohen and levinthal 1990 first defined this as the absorptive capacity.
Conceptually, it is similar to information processing theory, but at the firm level rather than the individual level. Cohen and levinthal 1990 first introduce absorptive capacity into the level of the firm, they given that absorptive capacity refers not only the acquisition or assimilation of information by an organization but also the organizations ability to exploit it. In this paper we aim to study such learning under the lens of absorptive capacity. Absorptive capacity is an idea showing an organizations capacity to secure outside information, understand its value, absorb it and after that apply the new information for business purposes. View absorptive capacity research papers on academia. The construct of absorptive capacity in the context of spillovers implies that. Thus, absorptive capacity is the mechanism that makes external knowledge available to and usable within an organization. Zahra georgia state university gerard george university of wisconsinmadison researchers have used the absorptive capacity construct to explain various organizational phenomena. Broad search, deep search, and the absorptive capacity. Building upon the dynamic capabilities view of the firm, we distinguish between a firms potential and realized capacity. Zahra and george 2002 of an organizations toplevel and operational management is consistent with the. These are generally referred to as absorptive capacity ac after the work of cohen and levinthal 1990 cohen, w. Absorptive capacity, according to lane, koka and pathak 2006 is one of the most relevant constructs derived from organizational research in the.
Cohen and levinthal effectively argued that if such information was costlessly absorbed, it was only because firms had invested in absorptive capacity, which wasnt costless. We label this capability a firms absorptive capacity and suggest that it is largely a function of the firms level of prior related knowledge. Organizational learning and absorptive capacity in. The role of organizational absorptive capacity in strategic use of. In the years since its introduction, the definition of absorptive capacity has been expanded to take into account real world applications. Abstract absorptive capacity is an ability firms should develop if they wish to adapt to changes in an increasingly competitive and changing environment and to achieve and sustain competitive advantage. The objective of this paper is to deepen our understanding of the role of absorptive capacity in enabling interorganizational new product development inpd. Put another way, absorptive capacity is a limit to the rate or quantity of scientific or technological information that a firm can absorb. In this regard, absorptive capacity allows a firm to adapt to environmental changes and improve. Levinthal university of pennsylvania in this paper, we argue that the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative. Patient safety, knowledge creation and the absorptive.
One of the most widely adopted adjustments was created in 2002 when professors shaker zahra and gerry george added the idea that the method was realistically composed of two concepts. In the next section, we present the theoretical overview and hypotheses. Pdf cohen and levinthal 1990 absorptive capacity a new. Zahra and george 2002 suggested a reconceptualization of the absorptive capacity construct in order to reduce ambiguity in empirical studies. Nineteen years after the cohen and levinthal 1990 paper, the field is. Absorptive capacity is the ability of a firm to make sense of new information and use it towards commercial purposes.
The purpose of this perspective paper is to advance understanding of absorptive capacity, its underlying dimensions, its multilevel antecedents, its impact on firm performance and the contextual factors that affect absorptive capacity. External network, absorptive capacity and innovation. In turn, the longevity of businesses is increasingly contingent on their ability to leverage. In the initial definition of absorptive capacity three main steps of using knowledge were identified. Since the publication of cohen and levinthals 1989 work on absorptive capacity, numerous theoretical and empirical studies have analysed firms capacity to absorb knowledge. Mowery and oxley 1995 further refined the concept of absorptive capacity as a broad set of skills necessary for dealing with tacit components of knowledge transfer. Zahra and george 2002 distinguish between potential absorptive capacity pac which. Therefore, it is possible that the absorptive capacity of a firm is created as a byproduct of the. Pdf absorptive capacity is regarded as an important factor in both corporate innovation and general competitive advantage.
Since the cohen and levinthal article on absorptive capacity was published, the ability to recognize the value of new information, to assimilate it, and apply it to commercial ends p. Multilevel absorptive capacity and interorganizational new. Absorptive capacity, the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities. A new perspective on learning and innovation, asq, 35 1990, 128152. It arose from the original work done by cohen and levinthal. Absorptive capacity is a seminal management concept that seeks to understand how firms acquire and utilize external knowledge in order to generate innovations cohen and levinthal, 1990. The notion of absorptive capacity refers to the capacity of a recipient. Absorptive capacity the antidote for disruption from.
Expanding capabilities in a mature manufacturing firm. According to research on the concept by cohen and levinthal 1990, absorptive capacity as a capability is critical in supporting firms innovation. Absorptive capacity of rural hospitals 193 journal of health management, 10, 2, 2008. Cohen and levinthals initial theorization 1989, 1990 several attempts have been made to both refine the construct and overcome difficulties in operationalizing empirical research. We contend that despite what is known about the benefits of absorptive capacity to innovating firms, this research is dominated by firmlevel analyses using crosssectional data.
Then, prior knowledge gives companies the capacity to recognize new information value, assimilate it, and apply it to commercial ends. Pdf open innovation provides a general view how firms can benefit from external sources of knowledge. Absorptive capacity and new product development absorptive capacity and the search for innovation absorptive capacity, organizational antecedents, and environmental dynamism. Absorptive capacity and organizational learning springerlink. Organizational learning capacity and organizational. Cohen and levinthal 1990 have offered the most widely cited definition of acap, viewing it as the firms ability to value, assimilate, and. In discussing their definition of absorptive capacity, cohen and levinthal 1990. Researchers have used the absorptive capacity construct to explain various organizational phenomena. Absorptive definition of absorptive by the free dictionary. Absorptive capacity, as defined by cohen and levinthal, 1989, cohen and levinthal, 1990, cohen and levinthal, 1994, is a firms ability to recognize the value of new, external information, assimilate it, and apply it to commercial ends 1990, p. This paper introduces the concept or theory of absorptive capacity ac which the authors define as the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends. The absorptive capacity decides the extent of enterprise. Managing potential and realized absorptive capacity. Connecting absorptive capacity and open innovation.