Henk W. Volberda

Abstract: A brief abstract This study examines how business units manage the ratio of realized to potential absorptive capacity and reveals how absorptive capacity drives performance differences. Results from 462 business units within 150 branches show that cross-functional interfaces, participation and job-rotation especially enhance a unit's potential absorptive capacity. Formalization and socialization tactics particularly develop a unit's realized absorptive capacity. Regarding consequences of absorptive capacity, our findings show that superior financial performance originates from a unit's ability to nurture and harvest potential absorptive capacity. Moreover, our study suggests that potential and realized absorptive capacity have different roles in enabling explorative and exploitative adaptations. Lower ratios of realized to potential absorptive capacity are associated with explorative adaptations, whereas higher ratios are related to exploitative adaptations. In this regard, our study shows how managing potential and realized absorptive capacity provides sources of sustainable competitive advantage. JEL Code(s)– M10 2 INTRODUCTION The increasing turbulence of the business environment has focused attention on knowledge as the dominant source of competitive advantage (Grant, 1996; Kogut & Zander, 1992). To survive external selection pressures, firms should recognize new outside knowledge, assimilate it, and apply it to commercial ends. This dynamic capability, referred to as absorptive capacity (Cohen & Levinthal, 1990), is seen as a promising explanation of innovation capacity clarifies how firms cope with the competitive landscape by mediating explorative and The last decade has witnessed a proliferation of contributions to the concept of absorptive capacity. Empirical studies have applied the concept to units, firms, and dyads. Conceptually, Zahra & George (2002) have introduced a 'dynamic capabilities' perspective of absorptive capacity and have substantiated between potential and realized absorptive capacity. Potential absorptive capacity (PACAP) enables a unit's receptiveness to external knowledge and captures a unit's ability to acquire, analyze, interpret, and understand new external knowledge. On the other hand, realized absorptive capacity (RACAP) reflects a unit's capacity to transform and exploit new and existing knowledge by incorporating it into its operations. The distinction highlights the separate, but complementary roles of both subsets of absorptive capacity. Moreover, it enables the examination how units develop competitive advantages by managing the efficiency factor of absorptive capacity – the ratio of realized absorptive capacity to potential absorptive capacity (Zahra & George, 2002). 3 Despite various theoretical and empirical contributions, few have captured the richness and multidimensionality of the concept of absorptive capacity (Zahra & George, 2002). Recent research has only started …

TL;DR: In this article, four distinct modes of business model innovation are identified: exploit and improve (replication which is strategy-driven), exploit and connect (replicating which is customer-driven); explore and connect, explore and discover, and explore and dominate (exploiting and dominating).

TL;DR: In this paper, Lewin and Volberda present a method for organizing self-renewal in co-evolving environments.textSpecial Research Symposium:BEYOND ADAPTATION VS. SELECTION RESEARCH

TL;DR: In this article, the authors describe how senior executives can seek advice both inside and outside the boundaries of the organization and that can affect the choices made and the overall direction of the organisation.

TL;DR: This chapter develops a theoretical framework specifying the linkages between types of flexibility and organization design characteristics and argues for a hierarchical structure with increasing levels offlexibility and supporting organizational design.