The Four Dimensions of Absorptive Capacity Development

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As hitherto conveyed, ACAP comprises of four distinct, albeit complementary capabilities: accessing, assimilation, transformation, and exploitation. Notably, acknowledging that these capabilities indeed portray commonalities across varied enterprises and attain equifinality, they are idiosyncratic in the unique ways enterprises integrate, deploy and utilise them (Eisenhardt & Martin, 2000). This resulting variability furnishes enterprises with the foundation to develop heterogeneity in their abilities to effectively manage the accessed new tacit and explicit knowledge resources derived from their varied alliance portfolio partners. Following this underpinning, next, an explication of each capability and how they are combined to create an enterprise's ACAP – is forwarded.

Accessing. Accessing depicts an enterprise's capability to identify and gain access to externally generated knowledge – that is vital to its operations. Expended efforts in building the necessary routines for gaining access to knowledge comprise three attributes, which can engender ACAP: intensity, speed, and direction. The intensity and speed of an enterprise's efforts to identify and obtain knowledge could influence the quality of an enterprise's accessing capabilities.

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The more enduring the effort, the more promptly the enterprise could build requisite capabilities, therein (Kim, 1997a,b). Expectedly, limits to an enterprise's ability to realise this speed is inevitable, owing to the fact that learning circles cannot be amenably shortened, and some of the resources required to build ACAP are not promptly assembled (Clark & Fujimoto, 1991). Additionally, the direction of accumulating knowledge could likewise influence the paths that an enterprise follows in obtaining external knowledge. These activities vary in their richness and complexity, highlighting a requirement to possess varied areas of expertise within an enterprise – to successfully import external knowledge-based resources (Rocha, 1997).

Assimilation. Assimilation depicts an enterprise's routines and processes that enable it to analyse, process, interpret, and understand the information derived from external sources (Kim, 1997a,b; Szulanski, 1996). Ideas and discoveries that fall outside an enterprise's search zone are usually overlooked, because the enterprise in unable to effortlessly comprehend them (Cyert & March, 1963; Rosenkopf & Nerkar, 2001). Externally accessed knowledge could embody heuristics that largely contradict those utilised by the enterprise, and as such, seemingly impede its ultimate comprehension (Leonard-Barton, 1995). Furthermore, this knowledge is context specific, and therefore often prevents foreign elements from comprehending and/or replicating it (Szulanski, 1996). Comprehension is particularly challenging when the value of knowledge is dependent upon the existence of complementary assets that may be deficient within the recipient enterprise (Teece, 1981). Evidently, comprehension facilitates knowledge assimilation, which enable enterprises to process and orchestrate externally generated knowledge.

Transformation. Transformation depicts an enterprise's capability to develop and refine the routines that facilitate the comprehensive orchestration of knowledge, that is - its existing knowledge and its newly accessed and assimilated knowledge. This is realised by adding or shedding knowledge-based resources, or alternatively – by subjectively comprehending the same knowledge. Transformation alters the disposition of knowledge through bisociation. This occurrence manifests itself when a situation or idea is interpreted as seemingly representing elements pegged upon two previously unrelated patterns of thought, and at the same time - integrated into a more contemporaneous pattern (Koestler, 1966). Hence, the ability of enterprises to identify two perceptively incongruous sets of information, and thereafter orchestrate them to attain a new schema – represents a transformation capability. This capability that is induced by the bisociation process, shapes the entrepreneurial mindset (McGrath & MacMillan, 2000), and nurtures entrepreneurial agency (Smith & De- Gregorio, 2002). It produces new insights, facilitates the identification of opportunities, and simultaneously alters the manner in which an enterprise views itself and its competitive landscape. Consequently, these varied activities would act to generate new competencies, therein (e.g., Christensen et al., 1998; Zahra et al., 2000).

Exploitation. Following Gnyawali et al. (2018) operationalization of ACAP that emphasises the application of knowledge, the arguments herein build on this standpoint by incorporating exploitation as a dimension of ACAP. Exploitation, as an organisational capability – depicts the routines that enable enterprises to refine, and leverage existing competencies and/or create new ones – by integrating accessed and transformed knowledge into its operations. The concentration is on the routines that enable enterprises to exploit knowledge. It is acknowledgeable that enterprises could be in a position to serendipitously exploit knowledge, devoid of particular systematic routines. Nonetheless, the availability of such routines provides structural, systemic, and procedural mechanisms that enable enterprises – to sustain the exploitation of knowledge in the longer-term. Exploitation references an enterprise's ability to harvest and integrate knowledge into its operations (Tiemessen, et al., 1997; Van den Bosch et al., 1999). It demands the retrieval of knowledge that has hitherto been created and internalised for utilisation (Lyles & Schwenk, 1992). The resulting outcomes of systematic exploitation routines comprise the consistent creation of new goods, services, systems, processes, knowledge and/or new organisational forms (Spender, 1996). Exploitation manifests itself in both new and successful established enterprises (e.g, herein, E.F.SMEs). Following this depiction, in new enterprises, knowledge could be captured from their market, competition, and customers – and thereafter utilised to create new competencies. Correspondingly, in successful established enterprises, new routines are likely to be established – that calibrate and deploy their knowledge to enhance existing operations and/or foster new operations therein (Rumelt. 1987).

The presented arguments hitherto elucidate upon the four ACAP dimensions. Henceforth, elucidations are presented on how these dimensions reinforce upon each other to formulate ACAP into a coherent dynamic capability – that fosters organisational change and evolution. In a bid to compellingly conceptualise this undertaking, postulations are directed that accessing and assimilation capabilities are dimensions of "potential capacity", and that transformation and exploitation capabilities are dimensions of "realised capacity". As such, the underlying potential and realised capacities are forwarded to represent components of ACAP. In the succeeding, their roles and relevance are explicated.

The Four Dimensions of Absorptive Capacity Development. (2024, Feb 10). Retrieved from https://studymoose.com/the-four-dimensions-of-absorptive-capacity-development-essay