FROM KNOWLEDGE TO INNOVATION: A REVIEW OF THE FACTORS, COMPONENTS, AND IMPACT OF ABSORPTIVE CAPACITY
DOI:
https://doi.org/10.35120/sciencej0402013zKeywords:
absorptive capacity, innovation, knowledge, dynamical capability, competitive advantageAbstract
This paper aims to build on existing research on absorptive capacity by exploring its key factors, components, outcomes, advantages, and constraints. Absorptive capacity, defined as an organization’s ability to acquire, assimilate, transform, and utilize external knowledge, plays a crucial role in fostering innovation and sustaining competitive advantage. As a dynamic capability, absorptive capacity enables organizations to continuously adapt to changing environments by integrating and leveraging new knowledge. The paper examines the factors that shape absorptive capacity, including managerial influences, intra-organizational factors, inter-organizational networks, and prior knowledge. It also distinguishes between potential and realized absorptive capacity, highlighting their complementary roles in leveraging external knowledge for business success. Furthermore, the study discusses the outcomes of absorptive capacity, such as innovation, improved organizational performance, and competitive advantage. While absorptive capacity offers significant benefits, its implementation demands substantial resources, and organizations must strike a balance between acquiring knowledge and effectively applying it to avoid information overload. Building on previous academic contributions, this paper offers a comprehensive understanding of absorptive capacity and its managerial implications. Future research should further investigate the interplay between absorptive capacity components and their sector-specific implications.
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