Absorptive capacity: Relevancy for large and small enterprises

What is it about?

Over the years, there has been a growing interest in organisational research in the absorptive capacity (AC) construct, but only a few theoretical and empirical studies on this topic have been carried out over the last decade. However, a number of scholars and practitioners have continued to cite AC as a significant factor in determining the success or failure of organisations. With the dramatic changes in business environments, there has been a growing rise in the use of knowledge by organisations to help improve and maintain their competitiveness and consequently their survival. AC is a fundamental element that helps organisations to gain competitive advantage by producing commercial products or services through the transformation of knowledge.

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Why is it important?

The purpose of this article is thus to provide a review of the literature on this subject with the aim of finding out how both large and small enterprises stand to benefit from AC. We intend to affirm that, by successfully carrying out a learning process that is characterised by the exploration and exploitation of external knowledge and the organisation’s current knowledge base, organisations can realise competitive advantage irrespective of their size.