Researchers have used the absorptive capacity construct to explain various organizational phenomena. In this article we review the literature to identify key dimensions of absorptive capacity and offer a reconceptualization of this construct. Building upon the dynamic capabilities view of the firm, we distinguish between a firm's potential and realized capacity. We then advance a model outlining the conditions when the firm's potential and realized capacities can differentially influence the creation and sustenance of its competitive advantage.

https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=5629&context=lkcsb_research

Absorptive Capacity: A Review, Reconceptualization, and Extension

How has Japan become a major economic power, a world leader in the automotive and electronics industries? What is the secret of their success? The consensus has been that, though the Japanese are not particularly innovative, they are exceptionally skilful at imitation, at improving products that already exist. But now two leading Japanese business experts, Ikujiro Nonaka and Hiro Takeuchi, turn this conventional wisdom on its head: Japanese firms are successful, they contend, precisely because they are innovative, because they create new knowledge and use it to produce successful products and technologies. Examining case studies drawn from such firms as Honda, Canon, Matsushita, NEC, 3M, GE, and the U.S. Marines, this book reveals how Japanese companies translate tacit to explicit knowledge and use it to produce new processes, products, and services.

The knowledge-creating company : how Japanese companies create the dynamics of innovation

The Social Psychology of Organizations.

The paper is concerned with spatial clustering of economic activity and its relation to the spatiality of knowledge creation in interactive learning processes. It questions the view that tacit knowledge transfer is confined to local milieus whereas codified knowledge may roam the globe almost frictionlessly. The paper highlights the conditions under which both tacit and codified knowledge can be exchanged locally and globally. A distinction is made between, on the one hand, the learning processes taking place among actors embedded in a community by just being there dubbed buzz and, on the other, the knowledge attained by investing in building channels of communication called pipelines to selected providers located outside the local milieu. It is argued that the co-existence of high levels of buzz and many pipelines may provide firms located in outward-looking and lively clusters with a string of particular advantages not available to outsiders. Finally, some policy implications, stemming from this argumen...

/pdf/clusters-and-knowledge-local-buzz-global-pipelines-and-the-29bsuyvekg.pdf

Clusters and knowledge: local buzz, global pipelines and the process of knowledge creation

How have Japanese companies become world leaders in the automotive and electronics industries, among others? What is the secret of their success? Two leading Japanese business experts, Ikujiro Nonaka and Hirotaka Takeuchi, are the first to tie the success of Japanese companies to their ability to create new knowledge and use it to produce successful products and technologies. In The Knowledge-Creating Company, Nonaka and Takeuchi provide an inside look at how Japanese companies go about creating this new knowledge organizationally. The authors point out that there are two types of knowledge: explicit knowledge, contained in manuals and procedures, and tacit knowledge, learned only by experience, and communicated only indirectly, through metaphor and analogy. U.S. managers focus on explicit knowledge. The Japanese, on the other hand, focus on tacit knowledge. And this, the authors argue, is the key to their success--the Japanese have learned how to transform tacit into explicit knowledge. To explain how this is done--and illuminate Japanese business practices as they do so--the authors range from Greek philosophy to Zen Buddhism, from classical economists to modern management gurus, illustrating the theory of organizational knowledge creation with case studies drawn from such firms as Honda, Canon, Matsushita, NEC, Nissan, 3M, GE, and even the U.S. Marines. For instance, using Matsushita's development of the Home Bakery (the world's first fully automated bread-baking machine for home use), they show how tacit knowledge can be converted to explicit knowledge: when the designers couldn't perfect the dough kneading mechanism, a software programmer apprenticed herself withthe master baker at Osaka International Hotel, gained a tacit understanding of kneading, and then conveyed this information to the engineers. In addition, the authors show that, to create knowledge, the best management style is neither top-down nor bottom-up, but rather what they call "middle-up-down," in which the middle managers form a bridge between the ideals of top management and the chaotic realities of the frontline. As we make the turn into the 21st century, a new society is emerging. Peter Drucker calls it the "knowledge society," one that is drastically different from the "industrial society," and one in which acquiring and applying knowledge will become key competitive factors. Nonaka and Takeuchi go a step further, arguing that creating knowledge will become the key to sustaining a competitive advantage in the future. Because the competitive environment and customer preferences changes constantly, knowledge perishes quickly. With The Knowledge-Creating Company, managers have at their fingertips years of insight from Japanese firms that reveal how to create knowledge continuously, and how to exploit it to make successful new products, services, and systems.

The knowledge-creating company

Although self-regulation has proven to be effective for the development of voluntary corporate-governance codes, the results of this study indicate that leading European companies are not yet too concerned about compliance with these codes. While self-regulation appears to be ineffective to change the disclosure practices of companies, the study concludes that factors relevant for choosing regulatory forms and the impact and risks involved with non-compliance of companies with voluntary codes have determined the Winter Report's emphasis on self-regulation.

/pdf/the-importance-of-disclosure-in-corporate-governance-self-11i1keosx2.pdf

The importance of disclosure in corporate governance self-regulation across Europe: A review of the Winter Report and the EU Action Plan

There is considerable research evidence to confirm that the accumulation of knowledge contributes to the competitive advantage of firms. However, in strategy consulting, one of the most knowledge-intensive professional services, established firms that exploited their knowledge accumulation by adding exploitative consulting practices have found their performance has deteriorated.




The increasing share of exploitative practices in the strategy consulting industry has attracted both established ICT-related consulting firms and new entrants. Moreover, it has enabled clients to expand their problem-solving abilities. These developments, in terms of competitiveness and client competencies, have reduced the attractiveness of exploitative practices for established strategy consulting firms.




To analyse this development and to provide strategic options for the established firms, a conceptual framework is proposed. Based on this framework three strategic options are identified: ‘follow the herd’, ‘become ambidextrous’ and ‘back to the original focus’. In summarizing our argument, we highlight the pros and cons of these options and the implications for senior management.






Copyright © 2005 John Wiley & Sons, Ltd.

https://onlinelibrary.wiley.com/doi/pdf/10.1002/jsc.705

How knowledge accumulation has changed strategy consulting: strategic options for established strategy consulting firms

Organizational ambidexterity (i.e., the ability to pursue exploratory and exploitative
innovation simultaneously) is crucial to firm survival. In this study we explore how multiunit
firms might develop ambidextrous organizational units in response to environmental
demands. We examine how environmental and organizational antecedents affect a
unit’s level of organizational ambidexterity. Our study reveals that multiunit firms develop
ambidextrous organizational units to compete in dynamically competitive environments.
Moreover, we show that organizational units with decentralized and densely connected
social relations are able to act ambidextrously and pursue exploratory and exploitative
innovations simultaneously. Our study provides new insights how multiunit firms can
cope with contradictorily pressures for exploratory and exploitative innovations.

/pdf/exploratory-innovation-exploitative-innovation-and-1185dfeb19.pdf

Exploratory innovation, exploitative innovation and ambidexterity

Our study builds on extant theory on embeddedness by concentrating on the process of preservation and dissolution of the target firm's embedded ties in acquisitions. We identify four critical areas (communication, idiosyncratic investments, interpersonal relations and personnel turnover) where managerial decisions taken during the acquisition process affect the components of the target firm's embedded ties — trust, joint problem-solving, conflict resolution and exchange of fine-grained information. The preservation or dissolution of an embedded tie depends ultimately on two specific tie contingencies, the balance of power between the target firm and the embedded relation and interpretive processes at the interface between the two. Our findings have implications for the study of the dissolution of market ties by pointing to different roles played by social and institutional forces, power asymmetries and competition in the dynamics of embedded ties. Finally, we encourage theory development in acquisition st...

/pdf/preservation-and-dissolution-of-the-target-firm-s-embedded-4ssne1uxh1.pdf

Preservation and Dissolution of the Target Firm's Embedded Ties in Acquisitions

Knowledge creation and organizational learning have become central concerns in strategic management. This chapter analyzes customer relationships as a source of new organizational knowledge. Knowledge absorption from customer relationships involves two key processes of organizational learning: creating new knowledge within the firm from client relationships and leveraging this new knowledge within the firm and in client relationships. The management of such learning and knowledge leveraging processes is critical to a firm's ability to build new organizational competences. These processes are examined in the context of knowledge intensive business service firms including both specialist and general management consulting firms, to gain insights into processes of strategic organizational learning. After presenting two brief case studies of knowledge absorption from clients, some implications for knowledge management in various kinds of client relationships are considered. This chapter contributes to the competence-based view of competition by developing a typology of client relationships and an integrative framework that helps to clarify several important types of knowledge absorption opportunities.

Frans van den Bosch

Papers

The importance of disclosure in corporate governance self-regulation across Europe: A review of the Winter Report and the EU Action Plan

How knowledge accumulation has changed strategy consulting: strategic options for established strategy consulting firms

Exploratory innovation, exploitative innovation and ambidexterity

Preservation and Dissolution of the Target Firm's Embedded Ties in Acquisitions

Competence-based competition: Gaining knowledge from client relationships