Managing Potential and Realized Absorptive Capacity: How Do Organizational Antecedents Matter?

Abstract

This study explores how organizational antecedents affect potential and realized absorptivecapacity. Our study identifies differential effects for both components of absorptive capacity.Results indicate that organizational mechanisms associated with coordination capabilities (i.e.cross-functional interfaces, participation in decision-making, and job rotation) primarily enhancea unit’s potential absorptive capacity. Organizational mechanisms associated with socialization capabilities (i.e. connectedness and socialization tactics) primarily increase a unit’s realized absorptive capacity. Our findings reveal why units may have difficulties in managing levels of potential and realized absorptive capacity and vary in their ability to create value from their absorptive capacity.

Keywords: combinative capabilities, absorptive capacity, organizational antecedents, external knowledge

JEL Classification: M, D21, L20