Absorptive capacity and small family firm performance: exploring the mediation processes
15 May 2018-Journal of Knowledge Management (Emerald Publishing Limited)-Vol. 22, Iss: 6, pp 1201-1216
TL;DR: The authors theoretically argue and empirically validate that AC enables the creation of entrepreneurial, market and technology orientations in small family firms, which, in turn, lead to superior firm performance.
Abstract: Despite the recognized importance of knowledge management for small family firms, relatively little empirical research has been done so far to understand the mechanisms through which absorptive capacity (AC) assists their performance. The purpose of this study is to understand the relationship between absorptive capacity and performance in small family firms.,In this study, the authors theoretically argue and empirically validate that AC enables the creation of entrepreneurial, market and technology orientations in small family firms, which, in turn, lead to superior firm performance. They also tested the study’s hypotheses using mediation and multiple linear regression analyses on data collected from 272 small Indian family firms.,The study’s findings suggest indirect relationship between AC and performance. The strategic orientations provide a mechanism through which investments in small family firms’ AC results in firm performance.,This study offers crucial insights to practitioners and small firm managers regarding the use of knowledge-based capabilities in creating appropriate strategic postures, which, in turn, assist firm performance.,This study is among few research attempts in understanding the knowledge aspects of small family firms. The present research contributes to the existing literature by unravelling the relationship between knowledge management and small family firm performance. Also, by bringing in data from an under-studied context of an emerging economy, this study strengthens the theoretical applicability of knowledge management in different contexts.
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01 Jan 2012
TL;DR: The results show that HRM and ICT practices for managing knowledge are quite strongly correlated and have a statistically significant influence on both financial performance and competitiveness of the firm.
Abstract: Purpose – While nowadays an extensive literature promoting knowledge management (KM) exists,
there is a worrying shortage of empirical studies demonstrating an actual connection between KM
activities and organizational outcomes. To bridge this gap, this paper aims to examine the link between
KM practices, firm competitiveness and economic performance.
Design/methodology/approach – This paper proposes a framework of KM practices consisting of
human resource management (HRM) and information communication technology (ICT). These both are
hypothesized to impact competitiveness and economic performance of the firm. Hypotheses are then
tested with structural equation modeling by using a survey dataset of 234 companies.
Findings – The results show that HRM and ICT practices for managing knowledge are quite strongly
correlated and have a statistically significant influence on both financial performance and
competitiveness of the firm. The findings also indicate that ICT practices improve financial
performance only when they are coupled with HRM practices.
Research limitations/implications – The data are limited to companies from Finland, Russia and
China.
Practical implications – The paper contributes to managerial practice by pointing out the importance
of utilizing a combination of both social and technical means for KM and illustrating that they do matter
for the company bottom line.
Originality/value – This paper contributes to the literature on knowledge-based organizing by
empirically analyzing the performance impact of various areas of KM. It thereby tests the proposition put
forth in many previous theoretical and case-based studies that KM promotes high organizational
performance. It also addresses the interaction of social and technical KM practices in producing
organizational outcomes.
372 citations
Posted Content•
TL;DR: In this article, the authors reconceptualize the firm-level construct absorptive capacity as a learning dyad-level measure, relative absorptive capacities, and test the model using a sample of pharmaceutical-biotechnology R&D alliances.
Abstract: Much of the prior research on interorganizational learning has focused on the role of absorptive capacity, a firm's ability to value, assimilate, and utilize new external knowledge. However, this definition of the construct suggests that a firm has an equal capacity to learn from all other organizations. We reconceptualize the firm-level construct absorptive capacity as a learning dyad-level construct, relative absorptive capacity. One firm's ability to learn from another firm is argued to depend on the similarity of both firms' (1) knowledge bases, (2) organizational structures and compensation policies, and (3) dominant logics. We then test the model using a sample of pharmaceutical–biotechnology R&D alliances. As predicted, the similarity of the partners' basic knowledge, lower management formalization, research centralization, compensation practices, and research communities were positively related to interorganizational learning. The relative absorptive capacity measures are also shown to have greater explanatory power than the established measure of absorptive capacity, R&D spending. © 1998 John Wiley & Sons, Ltd.
335 citations
TL;DR: In this paper, the mediating role of potential and realized absorptive capacity in intellectual capital (IC) and business performance was empirically examined, and the authors also investigated the direct impact of the components of IC on business performance.
Abstract: The purpose of this paper is to empirically examine the mediating role of potential and realized absorptive capacity in intellectual capital (IC) and business performance. It also investigates the direct impact of the components of IC on business performance.,Partial least square-structural equation modeling (PLS-SEM) was used to assess the effect of IC dimensions on performance and to analyze the mediating role of absorptive capacity in this relationship. Data were collected from 192 managers using a survey questionnaire with Likert scale items.,The findings of the study show that potential absorptive capacity does not intervene in the relationship between the components of IC and those of business performance. However, realized absorptive capacity, measured as the transformation and exploitation of knowledge, played a positive mediating role in the relationship between the dimensions of IC and those of business performance. Social capital was also noted as a weak predictor of business performance, while human capital and organizational capital had a profound positive influence.,This study contributes to the literature on IC by examining the role of realized and potential absorptive capacity in the relationship between IC components and firm performance. This research also helps practitioners recognize the importance of transformation and the exploitation of knowledge for business performance.
80 citations
TL;DR: In this paper, the authors investigate the micro-foundations of engaging in open innovation in the context of small and medium enterprises (SMEs) and investigate the characteristics of entrepreneurs managing small companies and whether these influence the proclivity towards openness.
40 citations
TL;DR: It was found that knowledge management practices have a positive and significant influence on dynamic capabilities, as well as have a significant impact on entrepreneurial and organizational performance.
Abstract: This study aims to identify the influence of knowledge management practices on the entrepreneurial 15 and organizational performance with the mediating effect of dynamic capabilities and moderating 16 role of opportunity recognition. Data were gathered from 486 entrepreneurs and applied a structural 17 equation model to test the hypotheses. We found that knowledge management practices have a 18 positive and significant influence on dynamic capabilities, as well as have a significant impact on 19 entrepreneurial and organizational performance. Moreover, results indicated that dynamic capabilities 20 partially mediate in the relationship between knowledge management practices on entrepreneurial 21 and organizational performance. Furthermore, the relationship between knowledge management 22 practices with entrepreneurial and organizational performance strengthening by opportunity 23 recognition. Further, implications and limitations were discussed in the paper.
37 citations
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27,902 citations