HOW FIRMS ABSORB EXTERNAL KNOWLEDGE — MODELLING AND MANAGING THE ABSORPTIVE CAPACITY PROCESS

Abstract

This paper contributes to the literature and management practice by opening the “black box” of firms’ absorptive capacity (AC) processes. Following a process research approach and based on in-depth comparative case studies of four German manufacturing companies, we develop and empirically validate a procss model of the firm-internal AC process. Our model integrates the different single elements (e.g., individuals, teams, departments) as well as the different linear and nonlinear causal interactions that constitute the firm’s ability to identify, adopt, implement and exploit external information and knowledge. Furthermore, the paper elaborates on various organizational leverages to increase the effectiveness of the identified process flows. The findings provide explanatory insight into the organisational prerequisites of AC. Thus, the paper simultaneously contributes to enhance the academic and management’s understanding of firms’ AC by identifying its constitutional key elements, their different kinds of processual interrelation as well as organisational prerequisites and points of leverage to modify, measure, and improve the AC of a company.