Summary of the article “Absorptive capacity: A review,
reconceptualization and extension” by Zahra & George (2002)
Goal of the article: To review the literature on absorptive capacity construct to identify key
dimensions of absorptive capacity & offer a reconceptualization of the construct
Absorptive Capacity (ACAP)
Previously: research used ACAP to explain organizational phenomena that span multiple
levels of analysis by invoking organizational learning, industrial economics, resource-based
and dynamic capabilities perspectives
ACAP is defined as set of firm abilities to manage knowledge
Many definitions so authors reconceptualize the term
ACAP = a set of organizational routines & processes by which firms acquire, assimilate,
transform and exploit knowledge to produce a dynamic organizational capability
This definition is different from past research in 2 ways:
1. ACAP is viewed as dynamic capability embedded in a firm’s routines & processes
2. This definition suggests that the 4 capabilities that make up ACAP are combinative in
nature & build upon each other to produce a dynamic capability
Difference capabilities & dynamic capabilities
Capability = high level routine that confers upon an organization’s management a set of
decision options for producing significant outputs of a particular type
Example: Coca Cola’s marketing capabilities
Dynamic capabilities = geared toward effecting organizational change; essentially strategic
in nature and therefore define the firm’s path of evolution & development
4 organizational capabilities that build on each other to get dynamic capability ACAP
1. Acquisition
a. Refers to a firm’s capability to identify & acquire externally generated
knowledge that is critical to its operations
b. Based on: intensity, speed and direction
2. Assimilation
a. Refers to a firm’s routines & processes that allow it to analyze, process and
understand information obtained externally
b. Knowledge outside a firm’s search zone are overlooked because the firm
can’t comprehend them
c. External knowledge often context specific so outsiders can’t understand or
replicate the knowledge
3. Transformation
a. Refers to a firm’s capability to develop & refine routines that facilitate
combining existing knowledge with newly acquired knowledge
b. Adding/ deleting new info or interpreting same info in different way
c. Bisociation = when a situation is perceived in 2 self consistent but
incompatible frames of reference
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