Exploring the elements of absorptive capacity: large-scale interview study of 61 companies in Estonia

Abstract

The increasingly dynamic business environment encourages companies to combine externally available information and internal ideas to maximise company performance. A company's ability to capture external knowledge and to use it for its own benefit is shaped by organisational absorptive capacity. Using data gathered from interviews with 61 Estonian companies, this research attempts to further investigate a recently proposed model of absorptive capacity suggesting that it is a set of simultaneous, rather than consecutive, elements. The paper provides an in-depth study of the suggested elements and patterns that make up the phenomenon of absorptive capacity and demonstrates that companies value external information, sourcing it and making their strategic choices based on the competitive situation. While providing support for the proposed model of absorptive capacity, the results also reveal common elements of its subsets: process-driven innovation, reliance on competitors and clients and the importance of employees.