MNG3702 Assignment 1 Semester 1 2024 (Solutions)
ASSIGNMENT 1, SEMESTER 1
Read the Netcare case study thoroughly to answer the questions that follow. All the
questions are based on the case study. Please ensure that you read the questions
carefully before you commence answering. In addition...
, Question 1 (10 marks)
Absorptive capacity refers to an organization's ability to recognize the value of new
external information, assimilate it, and apply it to commercial ends. This concept is critical
in understanding how businesses learn and innovate, adapting to changes and integrating
new knowledge into their operations (Cohen & Levinthal, 1990). Absorptive capacity is
often depicted through four dimensions: acquisition, assimilation, transformation, and
exploitation.
Acquisition is the first dimension, concerning the organization's ability to identify and
acquire externally generated knowledge that is critical to its operations. Netcare
demonstrates strong capabilities in this area by continuously investing in the latest medical
technologies and professional expertise. Their commitment to remaining at the forefront of
healthcare innovation is evident through their strategic investments in state-of-the-art
equipment and in fostering partnerships with leading healthcare professionals and
institutions. This proactive approach enables Netcare to acquire new knowledge and
technologies that enhance their service offerings and operational efficiency.
Assimilation refers to the processes and routines that allow organizations to analyze,
process, interpret, and understand the information obtained. Netcare has developed robust
systems and processes to assimilate new knowledge effectively. For instance, their quality
management system, designed to ensure the highest standards of care, incorporates over
300 measures of quality. This system is a testament to their ability to assimilate new
healthcare practices and standards, ensuring that all operational aspects are aligned with
the latest industry benchmarks.
Transformation is the capability to develop and refine routines that facilitate the
combination of existing knowledge with newly acquired and assimilated information.
Netcare's strategy to move away from traditional healthcare provision's siloed and episodic
approach towards a more integrated and seamless service delivery model exemplifies this
dimension. By digitizing patient health records across all service platforms and applying
rich data analytics, Netcare transforms the way health and care are delivered. This
approach not only integrates new with existing knowledge but also optimizes operations to
deliver value for all stakeholders.
Exploitation involves the application of new knowledge in a way that is beneficial to the
organization. Netcare's implementation of digital and data-driven solutions for person-
centered health and care is a clear indicator of their capacity to exploit new knowledge.
The creation of a customer engagement platform that allows patients to access their health
data throughout their lifetime is a significant step towards enabling patients to take co-
responsibility for their health and wellness. This exploitation of knowledge not only
enhances patient care but also drives organic growth and competitive advantage for
Netcare.
In conclusion, Netcare exhibits a high level of absorptive capacity across its systems and
processes. Through the effective acquisition of new knowledge, assimilation of this
knowledge into their operational processes, transformation of these processes to integrate
new and existing knowledge, and exploitation of this knowledge to improve patient care
and operational efficiency, Netcare stands out as a leader in the South African healthcare
sector. Their ongoing investments in technology, people, and infrastructure, coupled with
their commitment to innovation and quality care, demonstrate a sophisticated
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