Absorptive capacity is a set of capabilities of the firm which enable it to recognise, acquire, assimilate and apply toward commercial purposes the technology and knowledge available in its external environment (Cohen and Levinthal (1990)). What are these capabilities? This thesis has three aims: to identify the capabilities which constitute absorptive capacity; to design a change management model which the firm can apply to develop its capabilities for absorption; and to identify issues for further research. The scope of the research is absorption by the firm of existing technology from external sources, which the firm applies without significantly changing the technology and associated processes. The thesis does not consider the absorption of technology for application to inventions and creating new products. A new concept of adsorption is introduced, whereby the firm obtains access to technology, but does not grasp the technology to change its internal processes or for innovation. Absorption includes the latter, and is therefore fundamentally related to change management. As a step towards identifying capabilities for absorption, qualitative empirical study into two case study firms, each of which seeks to improve its performance by the absorption of technology, was conducted. The Todorova and Durisin (2007) model of absorptive capacity is the main construct for the empirical research. It comprises four sequential capabilities: recognition of the value of knowledge or technology; acquisition; transformation or assimilation (as alternatives); and exploitation. From the empirical evidence, features of the capabilities were derived inductively: absorptive capacity (that is, the capabilities) may vary as a function of level (operational to strategic) in the firm; absorptive capacity varies with management function; absorptive capacity is a function of the nature of technology and people s interest in the technology; a firm which is effective in some phases of absorption processes may not necessarily be effective in other phases; and absorptive capacity is directly a function of social networking and cumulative learning capabilities. Absorptive capacity is therefore not a single general capability of the firm. The evidence that social networking and cumulative learning are capabilities of absorptive capacity is recommended for further quantitative research across a wide selection of case study firms. A new model for change management is presented as a construct by which the firm can develop and manage its capabilities for technology absorption. The thesis then concludes with recommendations for research into strategic and change management dimensions of absorptive capacity.
Absorption of technology, Change management, Qualitative methodologies, Social networking
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