A Capability-Based Framework for Open Innovation: Complementing Absorptive Capacity

We merge research into knowledge management, absorptive capacity, and dynamic capabilities to arrive at an integrative perspective, which considers knowledge exploration, retention, and exploitation inside and outside a firm's boundaries. By complementing the concept of absorptive capacity, we advance towards a capability-based framework for open innovation processes. We identify the following six 'knowledge capacities' as a firm's critical capabilities of managing internal and external knowledge in open innovation processes: inventive, absorptive, transformative, connective, innovative, and desorptive capacity. 'Knowledge management capacity' is a dynamic capability, which reconfigures and realigns the knowledge capacities. It refers to a firm's ability to successfully manage its knowledge base over time. The concept may be regarded as a framework for open innovation, as a complement to absorptive capacity, and as a move towards understanding dynamic capabilities for managing knowledge. On this basis, it contributes to explaining interfirm heterogeneity in knowledge and alliance strategies, organizational boundaries, and innovation performance.     

Enhancing effects of manufacturing flexibility through operational absorptive capacity and operational ambidexterity

A large body of research investigates how manufacturing flexibility in uncertain environments leads to firm performance, with mixed results. The mixed findings could be due to differences across firms in terms of the capabilities to acquire, assimilate, and transform knowledge and to simultaneously pursue both the exploitation of existing operational capabilities and the exploration for new operational capabilities. Building on the literature that suggests that manufacturing flexibility mediates the relationship between environmental uncertainty and firm performance, we explore the applicability of two organizational learning contingencies to the operations environment: operational absorptive capability and operational ambidexterity. Absorptive capacity enables the recognition and assimilation of new knowledge. Ambidexterity determines whether this knowledge will be applied for both exploration and exploitation. Using a sample of 852 manufacturing firms, we find that environmental uncertainty affects firm performance directly and indirectly through manufacturing flexibility. Furthermore, both operational absorptive capacity and operational ambidexterity moderate the relationship between environmental uncertainty and manufacturing flexibility and the relationship between manufacturing flexibility and firm performance. Theoretical and practical implications are discussed.     

Capabilities that enhance outcomes of an episodic supply chain collaboration

Firms are increasingly dependent on the knowledge and expertise in external organizations to innovate, problem-solve, and improve supply chain performance. This research examines two capabilities that enable firms to collaborate successfully as a means to combine knowledge and expertise in an episodic collaboration initiative. Building from two theoretical foundations, the knowledge-based and relational views of the firm, we examine the effects of absorptive capacity and collaborative process competence on the outcomes of an episodic collaboration initiative. Using structural equation modeling, we empirically validate the positive effect of absorptive capacity, collaborative process competence and level of engagement on the operational and relational success of a collaboration effort. Results show that collaborative process competence mediates the relationship between absorptive capacity and collaborative engagement, and positively influences both operational and relational outcomes. Finally, we offer suggestions for managers to improve the effectiveness of inter-firm collaboration initiatives and discuss future research opportunities.     

Balancing on a tightrope: Managing the boundaries of a firm-sponsored OSS community and its impact on innovation and absorptive capacity

Realizing the innovation potential of OSS communities, firms now create or sponsor their own open source software (OSS) communities, generally as part of an open innovation strategy. However, maximizing the innovation capability of a sponsored OSS community is a challenging task since firms cannot rely on traditional hierarchical authority to control community members. Furthermore, a firm's efforts to manage its sponsored community may also impact the firm's absorptive capacity, or its ability to effectively absorb and leverage the valuable knowledge created by the community. Thus, the purpose of this article is to investigate two research questions: 1) How does the boundary management of a firm-sponsored OSS community impact the community's innovation capacity? and 2) How does the boundary management of a firm-sponsored OSS community impact the firm's absorptive capacity? Using the results from our qualitative analysis of eZ Systems and its successfully sponsored OSS community – eZ Publish – we develop a theoretical model depicting how the boundary management of a firm-sponsored OSS community influences both the community's innovation capacity and the absorptive capacity of the firm. In addition, the results of our study highlight the central importance of an integrative IT platform in boundary management activities.     

The Application of External Knowledge: Organizational Conditions for Exploration and Exploitation

A firm's ability to acquire and exploit external knowledge is often critical to achieving and sustaining a competitive advantage. In this study, we adopt a multi-dimensional view of absorptive capacity and focus specifically on the application of external knowledge that has been obtained via university-firm collaborations. We examine various organizational conditions that we propose influence a firm's ability to apply external knowledge for explorative and exploitative innovations. We collected data by a survey of firms in industries that frequently work with university research centres (URCs) and from publicly available sources. Results show that predictors of exploration and exploitation of the application of external knowledge differ. Surprisingly, technological relatedness, a common measure of absorptive capacity, is negatively associated with the application of external knowledge to explorative innovations, indicating that knowledge from more distant sources is applied more to exploration. Results also indicate that the effects of two external learning capabilities (prior experience with URCs and technological capability) on knowledge application are moderated in such a way by the tacitness of the knowledge transferred that experience is a stronger predictor when the knowledge is more explicit and technological capability is a stronger predictor when the knowledge is more tacit. We discuss the implications of these findings for research on the application of external knowledge.     

Capability hierarchy in electronic procurement and procurement process performance: An empirical analysis

This paper examines the interrelationship between two hierarchically structured functional capabilities pertinent in the organizational procurement process, and the impact of these capabilities on procurement process performance. These functional capabilities operate at different levels in an organization's procurement process. We draw upon resource- and knowledge-based views of the firm to theorize that in this hierarchy of information technology-enabled procurement capabilities, the higher-level capability – procurement integration competence – enables firms to develop and deploy a lower-level capability – digital procurement competence. Further, we theorize that the lower-level capability impacts procurement process performance directly and completely mediates the relationship between higher-level capability and performance. Thus, although performance is impacted directly only by the lower-level capability, the higher-level capability facilitates the development and use of the lower-level capability. Our research model is tested using survey data from a large sample of 412 manufacturing firms. The results provide strong support for the proposed research model. In particular, we find that as hypothesized, the impact of procurement integration competence on performance is completely mediated by digital procurement competence. Our results suggest that when examined at the procurement process level, the impact of higher-level capabilities may be manifested completely through the lower-level capabilities. Theoretical and practical implications of the research are discussed.     

Configuring absorptive capacity as a key process for research intensive firms

Absorptive capacity is a dynamic capability which creates new firm resources by searching, acquiring, assimilating, transforming and exploiting external knowledge with internal resources and act as a process framework for innovation. Despite being one of the most frequently cited strategic management concepts, absorptive capacity as a dynamic capability has limited empirical evidence with unverified assumptions. The concept is at risk of reification. With this study we contribute to the literature by providing empirical evidence for absorptive capacity which challenge the assumptions of how the construct is configured. We follow the strategic factor of intellectual property rights (IPR) in European biopharmaceutical firms using a qualitative process study with temporal bracketing. By tracking IPR, we found evidence for absorptive capacity in all firms we studied, but the process framework in use is different to Zahra and George’s (2002. Acad. Manage. Rev. 27, 185–203) and Todorova and Durisin’s (2007. Acad. Manage. Rev. 32, 774–786) theoretical models. Based on our evidence and literature review we develop some theoretical insights and propose a modified absorptive capacity model. This new model puts a greater emphasis on assimilating knowledge from outside the firm and provides more clarity on how research intensive firms might use absorptive capacity.     

The effect of an ambidextrous supply chain strategy on combinative competitive capabilities and business performance

This study investigates the influence of an ambidextrous supply chain strategy on manufacturers’ combinative competitive capabilities – the ability to excel simultaneously on competitive capabilities of quality, delivery, flexibility, and cost – and, in turn, on business performance. Drawing upon March's (1991) notions of exploration and exploitation, an ambidextrous supply chain strategy is conceptualized as a simultaneous pursuit of both explorative and exploitative supply chain practices. We operationalize this concept as a second-order latent construct that captures the co-variation between exploration and exploitation within the context of a manufacturer's supply chain management strategy. Using survey-based data gathered from 174 U.S. manufacturers, we find that an ambidextrous supply chain strategy coincides with combinative competitive capabilities and business performance. Our empirical finding contradicts conventional wisdom that argues for tradeoffs between exploration and exploitation. Instead, our empirical results are in line with an emerging complementarity view advocating that supply chain managers build practices to gain operational efficiency while simultaneously searching for opportunities to gain operational advantages. In addition, we provide insights regarding the role of combinative capabilities in mediating the relationship between an ambidextrous supply chain strategy and business performance.     

Absorptive capacity—one size fits all? A firm‐level analysis of absorptive capacity for different kinds of knowledge

This paper empirically analyzes the effect of R&D activities, human resource and knowledge management, and the organization of knowledge sharing within a firm on the absorptive capacity of innovative firms for three different types of knowledge, namely absorptive capacity to use knowledge from a firm's own industry, knowledge from other industries and knowledge from research institutions. Using data from the German innovation survey, we investigate how firms are able to exploit knowledge from external partners for successful innovation activities. The estimation results show that the determinants of absorptive capacity differ with respect to the type of knowledge absorbed for innovation activities. In particular, we find that the R&D intensity does not significantly influence absorptive capacity for intra‐ and inter‐industry knowledge. Additionally, our results suggest that absorptive capacity is path dependent and firms can influence their ability to exploit external knowledge by encouraging individuals' involvement in a firm's innovation projects. Copyright © 2009 John Wiley & Sons, Ltd.     

Building absorptive capacity to organise inbound open innovation in traditional industries

The discussion on open innovation suggests that the ability to absorb external knowledge has become a major driver for competition. For R&D intensive large firms, the concept of open innovation in relation to absorptive capacity is relatively well understood. Little attention has; however, been paid to how both small firms and firms, which operate in traditional sectors, engage in open innovation activities. The latter two categories of firms often dispose of no, or at most a relatively low level of, absorptive capacity. Open innovation has two faces. In the case of inbound open innovation, companies screen their environment to search for technology and knowledge and do not exclusively rely on in-house R&D. A key pre-condition is that firms dispose of “absorptive capacity” to internalise external knowledge. SMEs and firms in traditional industries might need assistance in building absorptive capacity. This paper focuses on the role of collective research centres in building absorptive capacity at the inter-organisational level. In order to do so, primary data was collected through interviews with CEOs of these technology intermediaries and their member firms and analysed in combination with secondary data. The technology intermediaries discussed are created to help firms to take advantage of technological developments. The paper demonstrates that the openness of the innovation process forces firms lacking absorptive capacity to search for alternative ways to engage in inbound open innovation. The paper highlights the multiple activities of which absorptive capacity in intermediaries is made up; defines the concept of absorptive capacity as a pre-condition to open innovation; and demonstrates how firms lacking absorptive capacity collectively cope with distributed knowledge and innovation.     

Exploring the effect of buyer engagement on green product innovation: Empirical evidence from manufacturers

In this study, we are interested in how export firms organize knowledge management and increase product innovation performance. Prior studies have concluded that knowledge transfer from external actors leads to operational performance outcomes; others have questioned the positive influence of buyer-driven knowledge transfer activities on innovation performance. Drawing on absorptive capacity, we aim to offer a better understanding, how export firms as recipients of knowledge resources, organize their internal capabilities in order to realize firm-level product innovation. This empirical study examines the interplay of buyer-driven knowledge activities, resource acquisition and combining, and product innovation outcomes in the context of Pakistani export firms. Drawing on survey data from 239 export-manufacturing firms, we test hypotheses using structural equation modeling. Our findings show that buyer-driven knowledge transfer activities play a crucial role in enhancing export firms in absorbing and combining resources that lead to product innovation. The pragmatic suggestion of the research suggests that managers look closely at developing a culture of involvement with their buyers that promotes the development of knowledge resources. The results of this study have research, policy, and managerial implications.     

Putting policy into practice: an exploratory study of SME innovation support in a peripheral UK region

Abstract

Focussing on a regional Government sponsored support programme for technology-based small and medium-sized enterprises (SMEs), the aim of this paper is to conduct a multi-level exploration of the relationships between policy interpretation and support programme design and the development of innovation capability among participant SMEs within a U.K peripheral region. The Innovplus programme was designed and implemented in Northern Ireland to help nascent high technology companies become more competitive and to contribute to the goals of the Regional Innovation Strategy. A knowledge-based absorptive capacity framework is used as the theoretical lens to explore the relationships between policy interpretation and programme design and the development of innovation capability within participant SMEs. The findings show that the design of the Innovplus programme, while linked to a coherent Regional Innovation Strategy, lacks consistency in relation to the policy and practical interpretation of knowledge and innovation. This inconsistency is reflected in the practical design of the programme, limiting its effectiveness as a result. In terms of the development of innovation capability, it was found that recognition and development of nascent absorptive capacity drivers in potential form was essential before participant SMEs could transition to realised absorptive capacity.     

Corporate culture,absorptive capacity and IT success

This study examines absorptive capacity’s role in IT implementation success. Absorptive capacity is the organization’s ability to recognize the value of new information, assimilate it, and apply it to commercial ends [Cohen, W. M., & Levinthal, D. A. (1990). Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35(March), 128–152]. Based on previous research, this study proposes a measure of absorptive capacity that includes managerial IT knowledge and communication channels and tests its relationship to the application of new technology in the form of expert systems implementation.Related to claims about the importance of absorptive capacity are claims that a “learning culture” or “knowledge-friendly culture” is necessary in order for knowledge to be gained and effectively used within the organization. This study examines the type of corporate culture that influences absorptive capacity. The results provide support for absorptive capacity’s proposed dimensions and its antecedent of corporate culture that act to influence the implementation of new technologies.     

Absorptive capacity and the identification of opportunities in new technology-based firms

The purpose of this work is to investigate relationships between knowledge and opportunities in new ventures. More specifically, this work proposes and empirically tests how potential absorptive capacity is related with the identification of opportunities in new technology-based firms (NTBFs). To take into account the unique nature of NTBFs we divide potential absorptive capacity into problem absorptive capacity, i.e. the ability to identify and acquire knowledge of the goals, aspirations and needs of current and potential customers, and solution absorptive capacity, i.e. the ability to identify and acquire external knowledge of solutions to fulfill them. We develop three hypotheses, which predict that both problem absorptive capacity and solution absorptive capacity will be positively related with the identification of opportunities in NTBFs and that they will reinforce each other. The findings support the importance of making a distinction between the two proposed dimensions of potential absorptive capacity and shed light on their effectiveness and interaction for the identification of opportunities.     

供应链中知识集成及其能力模型分析

通过对知识集成内涵的分析,建立了一个知识集成能力模型与物元模型,探讨知识吸收能力与协作能力对供应链中企业知识集成能力的影响,以及知识集成能力与创新绩效的关系.所提出的研究架构以知识管理理论和物元理论为基础,以科技产业及知识密集型的信息服务业的案例作为分析对象,通过分析与结构模式分析来验证研究架构,且利用物元理论构建了供应链中企业创新绩效的评价体系.     

Performance assessment and optimisation of a large information system by combined customer relationship management and resilience engineering: a mathematical programming approach

ISs and ITs play a critical role in large complex gas corporations. Many factors such as human, organisational and environmental factors affect IS in an organisation. Therefore, investigating ISs success is considered to be a complex problem. Also, because of the competitive business environment and the high amount of information flow in organisations, new issues like resilient ISs and successful customer relationship management (CRM) have emerged. A resilient IS will provide sustainable delivery of information to internal and external customers. This paper presents an integrated approach to enhance and optimise the performance of each component of a large IS based on CRM and resilience engineering (RE) in a gas company. The enhancement of the performance can help ISs to perform business tasks efficiently. The data are collected from standard questionnaires. It is then analysed by data envelopment analysis by selecting the optimal mathematical programming approach. The selected model is validated and verified by principle component analysis method. Finally, CRM and RE factors are identified as influential factors through sensitivity analysis for this particular case study. To the best of our knowledge, this is the first study for performance assessment and optimisation of large IS by combined RE and CRM.     

Knowledge management system for fourth generation R&D: KNOWVATION

Since the advent of the embryonic model almost a century ago, R&D systems have gone through an evolutionary process of development that can be classified into three generations. Today, the fourth generation of R&D is emerging that emphasizes both strategic and operational importance of knowledge management (KM). Despite the importance of KM, the network between conceptual scheme of the fourth generation R&D and practical system of KM remains a missing link. In response, the main objective of this paper is to present a framework for designing and implementing knowledge management system (KMS) for the fourth generation R&D. The proposed system is named KNOWVATION, which combines the notions of knowledge and innovation. First, the evolutionary classification of the R&D generations and the corresponding characteristics of the respective generations are defined. Second, the organizational structure and knowledge functions of the fourth generation R&D are derived. Finally, the overall design framework and detailed sub-modules are presented.     

Board interlocks,absorptive capacity,and environmental performance

Coupling resource dependence theory with absorptive capacity concepts, we analyze the role absorptive capacity plays as a potential facilitator between board interlocks and environmental performance. Board interlocks act as avenues for knowledge and information that exist outside the organization to become resources to improve environmental performance. However, an organization also needs the ability to utilize knowledge to implement activities that lead to better environmental performance. Our results show that firms with a diversity of interlocks (greater number of board interlocks, interlocks in the same and different industries, and interlocks with top performers) achieve better environmental performance. Furthermore, we find that absorptive capacity, as measured by research and development (R&D) intensity, moderates the relationship between board interlocks and environmental performance.     

The strategic role of knowledge management in nonprofit organisations

• Australian nonprofit organisations (NFPs) operate in an increasingly competitive marketplace for funding staff and volunteers and donations. In this context, many NFPs are being driven to adopt more commercial practices in order to improve their strategic performance, particularly competitive positioning for donor appeal, staff retention and service strategy and delivery. Knowledge management (KM) is one commercial practice being explored and implemented by the NFP sector to support strategic performance and operations. Although the concept of knowledge management is basically understood, the implications and strategies to pursue this practice in a NFP context are under explored. This paper presents a KM implementation planning framework for discussion and further research in the NFP sector. Specifically, this paper proposes that NFP's unique missions, many and varied organisational structures and operational maturity requires a customised approach to knowledge management. Implications for competitive strategy and performance are discussed.

© 2007 John Wiley & Sons, Ltd.     

服务代理企业知识吸收能力的概念及构成

知识吸收能力对服务代理企业培养竞争优势实现可持续发展有着重要的意义。从组织层次的角度来看,服务代理企业的知识吸收能力由三部分构成:个体知识吸收能力、团队知识吸收能力、企业知识吸收能力。