Absorptive capacity was introduced by cohen and levinthal in 1990. Put another way, absorptive capacity is a limit to the rate or quantity of scientific or technological information that a firm can absorb. One year later, cohen and levinthal 1990 redefine the construct as the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends. Cohen and levinthal 1989,1990 assigned the term absorptive capacity to the general capability of individuals, groups, and firms to recognize the value of new information, choose what to adopt, and apply it to innovation. Argues that ability of a firm to recognize value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities. Cohen and levinthal 1990 definition of absorptive capacity is the first and the more recognized one. Cohen and levinthal 1990, a firms absorptive capacity is critical to its innovative capacity. Despite the strategic importance of absorptive capacity, its origins remain only partially understood. Fundamentally, the absorptive capacity of a firm depends on the ability of its members to recognize valuable external. Absorptive capacity is a firms ability to recognize the value of new, external information, assimilate it, and apply it to commercial ends. A new perspective on learning and innovation, asq, 35 1990, 128152. Absorptive capacity and knowledge management in small and. Levinthal university of pennsylvania o 1990 by comell university. The organizational and geographic drivers of absorptive.
For them, absorptive capacity depends greatly on prior related knowledge and diversity of background. Corporate culture, absorptive capacity and it success pdf. Conceptually, it is similar to information processing theory, but at the firm level rather than the individual level. Administrative science quarterly, 351, 128152, cohen and levinthal expanded their conceptualisation of ac from an economic perspective into the one, which accounted for the. The investments a firm makes into its research and. The notion of absorptive capacity refers to the capacity of a recipient to assimilate value and use the knowledge transferred. Organizational ambidexterity and absorptive capacity. This paper develops the scales to operate the concepts, which is the development of the typolog y associated with breadth and depth of absorptive capacity. Pdf cohen and levinthal 1990 absorptive capacity a new.
Cohen and levinthal 1990 define absorptive capacity as the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends cohen and levinthal 1990, p. Absorptive capacity is an idea showing an organizations capacity to secure outside information, understand its value, absorb it and after that apply the new information for business purposes. Twenty years after the cohen and levinthal 1990 paper, the field is characterized by a wide array of theoretical perspectives and a wealth of empirical evidence. Cohen and levinthal introduced the notion of absorptive capacity as the firms ability to value, assimilate, and apply new knowledge for improving organizational learning. Zahra and george 2002 suggested a reconceptualization of the absorptive capacity construct in order to reduce ambiguity in empirical studies. Choi, 2014, but still little used in the knowledge management literature. A rereading of the seminal cohen and levinthal 1990 article in light of current research on learning and innovation directs our attention to serious ambiguities and omissions in zahra and georges reconceptualization. Developing and maintaining absorptive capacity is vital to a firms longterm survival and.
Absorptive capacity, the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends is critical to its innovative capabilities. Absorptive capacity, as defined by cohen and levinthal, 1989, cohen and levinthal, 1990, cohen and levinthal, 1994, is a firms ability to recognize the value of new, external information, assimilate it, and apply it to commercial ends 1990, p. Antecedents and outcomes of breadth and depth of absorptive capacity. Although, cohen and levinthal view of absorptive capacity is not. Antecedents and outcomes of breadth and depth of absorptive. This paper introduces the concept or theory of absorptive capacity ac which the authors define as the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends. Absorptive capacity and organizational learning springerlink.
Critical analysis of the use of absorptive capacity theory. Highlighting the pathdependency of learning, this concept suggests that an. Recently, zahra and george 2002a, 2002b proposed a. Moreover, cohen and levinthals works suggest that the ability of companies to absorb external knowhow could be. The notion of absorptive capacity refers to the capacity of a recipient. Given the size and diversity of the absorptive capacity literature, we. Critical analysis of the use of absorptive capacity theory in. Thus, absorptive capacity is the mechanism that makes external knowledge available to. Administrative science quarterly, v35 n1 p12852 mar 1990.
Absorptive capacity, technological innovation, and product. One year later, cohen and levinthal 1990 redefine the construct as the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends in their paper, the authors provide three main aspects of absorptive capacity which help to better understand the construct. Organizational learning and absorptive capacity in. This paper introduces the concept or theory of absorptive capacity ac which the authors define as the ability of a firm to recognize the value of new, external information, assimilate it. Cohen and levinthal 1990 absorptive capacity a new perspective on learning and innovation administrative science quarterly volume 35 issue 1 pg 128 152.
The role of individual absorptive capacity, subjective. Absorptive capacity, innovation, and financial performance. Absorptive capacity acap was first described in academic literature in the fields of management and organizational science as a construct for consideration at the organizational level by cohen and levinthal 1990. Absorptive capacity and new product development absorptive capacity and the search for innovation absorptive capacity, organizational antecedents, and environmental dynamism.
Knowledge spillovers and absorptive capacityinstitutional. Absorptive capacity and its role for the company growth. In their paper, the authors provide three main aspects of absorptive capacity which help to better understand the construct. Their combined citations are counted only for the first article. This is an allusion to the range of routines and organizational processes through which a. Organizational learning and absorptive capacity in managing. Absorptive capacity is defined as the ability of a firm to recognize the value of new, external information, assimilate it, and apply it to commercial ends cohen and levinthal 1990, p. According to research on the concept by cohen and levinthal 1990, absorptive capacity as a capability is critical in supporting firms innovation. The concept of absorptive capacity was first defined as a firms ability to recognize the value of new information, assimilate it, and apply it to commercial ends by cohen and levinthal.
Administrative science quarterlyspecial issue technology. In this process of innovation, imitation is important which can be a capacity that is acquired from external environment. A new perspective on learning and innovation wesley m. The concept of absorptive capacity concept has emerged as an underlying. Past research highlights a consensus in the definition of absorptive capacity, and also concerning its roles and outcomes. Essential to the concept of absorptive capacity is the. Since the pioneering work of cohen and levinthal, 1989, cohen and levinthal, 1990, an emerging body of literature is studying the importance of a firms ability to acquire, assimilate, and generate commercializable outputs from new external knowledge. Corporate culture, absorptive capacity and it success. Mar 09, 2018 absorptive capacity is an idea showing an organizations capacity to secure outside information, understand its value, absorb it and after that apply the new information for business purposes.