Configuring the absorptive capacity process and its barriers: a case study of professional service firm
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Keywords:
Absorptive capacity Professional service firm Tacit knowledge Explicit knowledge Knowledge management Strategic Management
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Abstract
This study configures the process as well as barriers of absorptive capacity in a context of professional service firm (PSF) to provide a comprehensive view toward how it absorbs external useful knowledge or information and why it fails to do so. As the PSFs rely on the tacit knowledge from their organizational members, particularly experts/professions in serving the knowledge-based services to the customers. This tacit knowledge can be built on each person past experiences as well as external knowledge/information that the person absorbed, which its knowledge absorption process may be more complex and different from other research-intensive firms that rely more on explicit knowledge. It brings attention to explore activities and routines that constitute to the absorptive capacity process as well as the constrained factors of such process in the PSF context. The findings suggested there are six major stages in service firm’s absorptive capacity process, which merging individual-level and firm-level absorptive capacities together as well as the mechanism linking between both levels and suggested three layers of barriers: individual-level, internal, and external environment barriers in relations with each stage in service firm’s absorptive capacity process.
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How to Cite
Prueksaphap, B. . (2021). Configuring the absorptive capacity process and its barriers: a case study of professional service firm. Kasetsart Applied Business Journal, 14(21), 51–82. retrieved from https://so04.tci-thaijo.org/index.php/KAB/article/view/248457
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Research article
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References
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Caligiuri, P. (2014). Many moving parts: Factors influencing the effectiveness of HRM practices designed to improve knowledge transfer within MNCs. Journal of International Business Studies, 45(1), 63-72. doi: 10.1057/jibs.2013.52
Camisón, C., & Forés, B. (2010). Knowledge absorptive capacity: New insights for its conceptualization and measurement. Journal of Business Research, 63(7), 707-715. doi: 10.1016/j.jbusres.2009.04.022
Cohen, W., & Levinthal, D. (1989). Innovation and learning: The two faces of R & D. The Economic Journal, 99(397), 569. doi: 10.2307/2233763
Cohen, W., & Levinthal, D. (1990). Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35(1), 110-129. doi: 10.2307/2393553
Cuervo-Cazurra, A., & Rui, H. (2017). Barriers to absorptive capacity in emerging market firms. Journal of World Business, 6(52), 727-742. doi: 10.1016/j.jwb.2017.06.004
Ebers, M., & Maurer, I. (2014). Connections count: How relational embeddedness and relational empowerment foster absorptive capacity. Research Policy, 43(2), 318-332. doi: 10.1016/j.respol.2013.10.017
Edmondson, A., & Mcmanus, S. (2007). Methodological fit in management field research. Academy Of Management Review, 32(4), 1155-1179. doi: 10.5465/amr.2007.26586086
Eggers, J., & Kaplan, S. (2009). Cognition and renewal: Comparing CEO and organizational effects on incumbent adaptation to technical change. Organization Science, 20(2), 461-477. doi: 10.1287/orsc.1080.0401
Empson, L. (2001). Fear of exploitation and fear of contamination: Impediments to knowledge transfer in mergers between professional service firms. Human Relations, 54(7), 839-862. doi: 10.1177/0018726701547003
Ganguly A., Talukdar, A., & Chatterjee D. (2019). Social capital, knowledge sharing, and innovation capability: An empirical study of Indian pharmaceutical sector. Knowledge and Process Management, the Journal of Corporate Transformation, 27(1), 25-42. doi: 10.1002/kpm.1614
Gioia, D., Corley, K., & Hamilton, A. (2012). Seeking qualitative rigor in inductive research. Organizational Research Methods, 16(1), 15-31. doi: 10.1177/1094428112452151
Gioia, D., Thomas, J., Clark, S., & Chittipeddi, K. (1994). Symbolism and strategic change in academia: The dynamics of sensemaking and influence. Organization Science, 5(3), 363-383. doi: 10.1287/orsc.5.3.363
Grant, R., & Baden-Fuller, C. (2004). A knowledge accessing theory of strategic alliances. Journal of Management Studies, 41(1), 61-84. doi: 10.1111/j.1467-6486.2004.00421.x
Greenwood, R., & Suddaby, R. (2006). Institutional entrepreneurship in mature fields: The big five accounting firms. Academy of Management Journal, 49(1), 27-48. doi: 10.2307/20159744
Greenwood, R., Hinings, C., & Brown, J. (1990). P2-form strategic management: Corporate practices in professional partnerships. Academy of Management Journal, 33(4), 725-755. doi: 10.5465/256288
Greenwood, R., Li, S., Prakash, R., & Deephouse, D. (2005). Reputation, diversification, and organizational explanations of performance in professional service firms. Organization Science, 16(6), 661-673. doi: 10.1287/orsc.1050.0159
Hansen, M., Nohria, N., & Tierney, T. (1999). What’s your strategy for managing knowledge?. Harvard Business Review, 77(2), 106-116.
Jansen, J., Van Den Bosch, F., & Volberda, H. (2005). Managing potential and realized absorptive capacity: How do organizational antecedents matter?. Academy of Management Journal, 48(6), 999-1015. doi: 10.5465/AMJ.2005.19573106
Kogut, B., & Zander, U. (1992). Knowledge of the firm, combinative capabilities, and the replication of technology. Organization Science, 3(3), 383-397. doi: 10.1287/orsc.3.3.383
Lane, P., & Lubatkin, M. (1998). Relative absorptive capacity and interorganizational learning. Strategic Management Journal, 19(5), 461-477. doi: 10.1002/(SICI)1097-0266(199805)19:5<461::AID-SMJ953>3.0.CO;2-L
PDFPDFLane, P., Koka, B., & Pathak, S. (2006). The reification of absorptive capacity: A critical review and rejuvenation of the construct. Academy of Management Review, 31(4), 833-863. doi: 10.2307/20159255
Lane, P., Salk, J., & Lyles, M. (2001). Absorptive capacity, learning, and performance in international joint ventures. Strategic Management Journal, 22(12), 1139-1161. doi: 10.1002/smj.206
Lenox, M., & King, A. (2004). Prospects for developing absorptive capacity through internal information provision. Strategic Management Journal, 25(4), 331-345. doi: 10.1002/smj.379
Lewin, A., Massini, S., & Peeters, C. (2011). Microfoundations of internal and external absorptive capacity routines. Organization Science, 22(1), 81-98. doi: 10.1287/orsc.1100.0525
Lichtenthaler, U. (2009). Absorptive capacity, environmental turbulence, and the complementary organizational learning processes. Academy Of Management Journal, 52(4), 822-846. doi: 10.5465/amj.2013.3001
Løwendahl, B. (2005). Strategic Management of Professional Service Firms (3rd ed.). Copenhagen: Copenhagen Business School Press.
Løwendahl, B., Revang, Ø., & Fosstenløkken, S. (2001). Knowledge and value creation in professional service firms: A framework for analysis. Human Relations, 54(7), 911-931. doi: 10.1177/0018726701547006
Matthyssens, P., Pauwels, P., & Vandenbempt, K. (2005). Strategic flexibility, rigidity and barriers to the development of absorptive capacity in business markets: Themes and research perspectives. Industrial Marketing Management, 34(6), 547-554. doi: 10.1016/j.indmarman.2005.03.004
Miles, M., & Huberman, A. (1994). Qualitative Data Analysis: An Expanded Sourcebook (2nd ed.). California: SAGE Publications.
Mills, P., Chase, R., & Margulies, N. (1983). Motivating the Client/Employee System. The Academy of Management Review, 8(2), 301-310. doi: 10.5465/amr.1983.4284740
Morris, T. (2001). Asserting property rights: knowledge codification in the professional service firm. Human Relations, 54(7), 819-838. doi: 10.1177/0018726701547002
Nonaka, I. (1994). A dynamic theory of organizational knowledge creation. Organization Science, 5(1), 14-37. doi: 10.1287/orsc.5.1.14
Nonaka, I., & von Krogh, G. (2009). Perspective—tacit knowledge and knowledge conversion: Controversy and advancement in organizational knowledge creation theory. Organization Science, 20(3), 635-652. doi: 10.1287/orsc.1080.0412
Patterson, W., & Ambrosini, V. (2015). Configuring absorptive capacity as a key process for research intensive firms. Technovation, (36-37), 77-89. doi: 10.1016/j.technovation.2014.10.003
Salter, A., Ter Wal, A., Criscuolo, P., & Alexy, O. (2014). Open for ideation: Individual-level openness and idea generation in R&D. Journal of Product Innovation Management, 32(4), 488-504. doi: 10.1111/jpim.12214
Saunders, M., Lewis, P., & Thornhill, A. (2009). Research Methods for Business Students (5th ed.). Essex: Pearson Education Limited.
Starbuck, W. (1992). Learning by knowledge-intensive firms*. Journal of Management Studies, 29(6), 713-740. doi: 10.1111/j.1467-6486.1992.tb00686.x
Strauss, A., & Corbin, J. (1998). Basics of Qualitative Research: Techniques and Procedures for Developing Grounded Theory (2nd ed.). California: SAGE Publications.
Teece, D. (2003). Expert talent and the design of (professional services) firms. Industrial and Corporate Change, 12(4), 895-916. doi: 10.1093/icc/12.4.895
Teece, D. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319-1350. doi: 10.1002/smj.640
Thompson, J. (1967). Organizations in Action, New York: McGraw-Hill.
Todorova, G., & Durisin, B. (2007). Absorptive capacity: Valuing a reconceptualization. Academy Of Management Review, 32(3), 774-786. doi: 10.2307/20159334
Van den Bosch, F., Volberda, H., & de Boer, M. (1999). Coevolution of firm absorptive capacity and knowledge environment: Organizational forms and combinative capabilities. Organization Science, 10(5), 551-568. doi: 10.1287/orsc.10.5.551
Volberda, H., Foss, N., & Lyles, M. (2010). Perspective-absorbing the concept of absorptive capacity: How to realize its potential in the organization field. Organization Science, 21(4), 931-951. doi: 10.1287/orsc.1090.0503
von Hippel, E. (1998). Economics of product development by users: The impact of “sticky” local information. Management Science, 44(5), 629-644. doi: 10.1287/mnsc.44.5.629
von Nordenflycht, A. (2010). What is a professional service firm? toward a theory and taxonomy of knowledge-intensive firms. Academy of Management Review, 35(1), 155-174. doi: 10.5465/amr.35.1.zok155
Yin, R. K. (2003). Case Study Research: Design and Methods. California: SAGE Publications.
Yin, R. K. (2009). Case Study Research: Design and Methods (4th ed.). California: SAGE Publications.
Zahra, S., & George, G. (2002). Absorptive capacity: A review, reconceptualization, and extension. Academy of Management Review, 27(2), 185-200. doi: 10.2307/4134351
Zapata, R., G., J., & Hernández A., A. (2018). Absorptive capacity: A literature review and a model of its determinants. Retos Revista de Ciencias de la Administración y Economía, 8(16), 119-137. doi: 10.17163/ret.n16.2018.09
Zobel, A. (2016). Benefiting from open Innovation: A multidimensional model of absorptive capacity. Journal of Product Innovation Management, 34(3), 269-288. doi: 10.1111/jpim.1236
Anand, N., Gardner, H., & Morris, T. (2007). Knowledge-based innovation: Emergence and embedding of new practice areas in management consulting firms. Academy of Management Journal, 50(2), 406-428. doi: 10.5465/amj.2007.24634457
Bettencourt, L., Ostrom, A., Brown, S., & Roundtree, R. (2002). Client co-production in knowledge-intensive business services. California Management Review, 44(4), 100-128. doi: 10.2307/41166145
Caligiuri, P. (2014). Many moving parts: Factors influencing the effectiveness of HRM practices designed to improve knowledge transfer within MNCs. Journal of International Business Studies, 45(1), 63-72. doi: 10.1057/jibs.2013.52
Camisón, C., & Forés, B. (2010). Knowledge absorptive capacity: New insights for its conceptualization and measurement. Journal of Business Research, 63(7), 707-715. doi: 10.1016/j.jbusres.2009.04.022
Cohen, W., & Levinthal, D. (1989). Innovation and learning: The two faces of R & D. The Economic Journal, 99(397), 569. doi: 10.2307/2233763
Cohen, W., & Levinthal, D. (1990). Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35(1), 110-129. doi: 10.2307/2393553
Cuervo-Cazurra, A., & Rui, H. (2017). Barriers to absorptive capacity in emerging market firms. Journal of World Business, 6(52), 727-742. doi: 10.1016/j.jwb.2017.06.004
Ebers, M., & Maurer, I. (2014). Connections count: How relational embeddedness and relational empowerment foster absorptive capacity. Research Policy, 43(2), 318-332. doi: 10.1016/j.respol.2013.10.017
Edmondson, A., & Mcmanus, S. (2007). Methodological fit in management field research. Academy Of Management Review, 32(4), 1155-1179. doi: 10.5465/amr.2007.26586086
Eggers, J., & Kaplan, S. (2009). Cognition and renewal: Comparing CEO and organizational effects on incumbent adaptation to technical change. Organization Science, 20(2), 461-477. doi: 10.1287/orsc.1080.0401
Empson, L. (2001). Fear of exploitation and fear of contamination: Impediments to knowledge transfer in mergers between professional service firms. Human Relations, 54(7), 839-862. doi: 10.1177/0018726701547003
Ganguly A., Talukdar, A., & Chatterjee D. (2019). Social capital, knowledge sharing, and innovation capability: An empirical study of Indian pharmaceutical sector. Knowledge and Process Management, the Journal of Corporate Transformation, 27(1), 25-42. doi: 10.1002/kpm.1614
Gioia, D., Corley, K., & Hamilton, A. (2012). Seeking qualitative rigor in inductive research. Organizational Research Methods, 16(1), 15-31. doi: 10.1177/1094428112452151
Gioia, D., Thomas, J., Clark, S., & Chittipeddi, K. (1994). Symbolism and strategic change in academia: The dynamics of sensemaking and influence. Organization Science, 5(3), 363-383. doi: 10.1287/orsc.5.3.363
Grant, R., & Baden-Fuller, C. (2004). A knowledge accessing theory of strategic alliances. Journal of Management Studies, 41(1), 61-84. doi: 10.1111/j.1467-6486.2004.00421.x
Greenwood, R., & Suddaby, R. (2006). Institutional entrepreneurship in mature fields: The big five accounting firms. Academy of Management Journal, 49(1), 27-48. doi: 10.2307/20159744
Greenwood, R., Hinings, C., & Brown, J. (1990). P2-form strategic management: Corporate practices in professional partnerships. Academy of Management Journal, 33(4), 725-755. doi: 10.5465/256288
Greenwood, R., Li, S., Prakash, R., & Deephouse, D. (2005). Reputation, diversification, and organizational explanations of performance in professional service firms. Organization Science, 16(6), 661-673. doi: 10.1287/orsc.1050.0159
Hansen, M., Nohria, N., & Tierney, T. (1999). What’s your strategy for managing knowledge?. Harvard Business Review, 77(2), 106-116.
Jansen, J., Van Den Bosch, F., & Volberda, H. (2005). Managing potential and realized absorptive capacity: How do organizational antecedents matter?. Academy of Management Journal, 48(6), 999-1015. doi: 10.5465/AMJ.2005.19573106
Kogut, B., & Zander, U. (1992). Knowledge of the firm, combinative capabilities, and the replication of technology. Organization Science, 3(3), 383-397. doi: 10.1287/orsc.3.3.383
Lane, P., & Lubatkin, M. (1998). Relative absorptive capacity and interorganizational learning. Strategic Management Journal, 19(5), 461-477. doi: 10.1002/(SICI)1097-0266(199805)19:5<461::AID-SMJ953>3.0.CO;2-L
PDFPDFLane, P., Koka, B., & Pathak, S. (2006). The reification of absorptive capacity: A critical review and rejuvenation of the construct. Academy of Management Review, 31(4), 833-863. doi: 10.2307/20159255
Lane, P., Salk, J., & Lyles, M. (2001). Absorptive capacity, learning, and performance in international joint ventures. Strategic Management Journal, 22(12), 1139-1161. doi: 10.1002/smj.206
Lenox, M., & King, A. (2004). Prospects for developing absorptive capacity through internal information provision. Strategic Management Journal, 25(4), 331-345. doi: 10.1002/smj.379
Lewin, A., Massini, S., & Peeters, C. (2011). Microfoundations of internal and external absorptive capacity routines. Organization Science, 22(1), 81-98. doi: 10.1287/orsc.1100.0525
Lichtenthaler, U. (2009). Absorptive capacity, environmental turbulence, and the complementary organizational learning processes. Academy Of Management Journal, 52(4), 822-846. doi: 10.5465/amj.2013.3001
Løwendahl, B. (2005). Strategic Management of Professional Service Firms (3rd ed.). Copenhagen: Copenhagen Business School Press.
Løwendahl, B., Revang, Ø., & Fosstenløkken, S. (2001). Knowledge and value creation in professional service firms: A framework for analysis. Human Relations, 54(7), 911-931. doi: 10.1177/0018726701547006
Matthyssens, P., Pauwels, P., & Vandenbempt, K. (2005). Strategic flexibility, rigidity and barriers to the development of absorptive capacity in business markets: Themes and research perspectives. Industrial Marketing Management, 34(6), 547-554. doi: 10.1016/j.indmarman.2005.03.004
Miles, M., & Huberman, A. (1994). Qualitative Data Analysis: An Expanded Sourcebook (2nd ed.). California: SAGE Publications.
Mills, P., Chase, R., & Margulies, N. (1983). Motivating the Client/Employee System. The Academy of Management Review, 8(2), 301-310. doi: 10.5465/amr.1983.4284740
Morris, T. (2001). Asserting property rights: knowledge codification in the professional service firm. Human Relations, 54(7), 819-838. doi: 10.1177/0018726701547002
Nonaka, I. (1994). A dynamic theory of organizational knowledge creation. Organization Science, 5(1), 14-37. doi: 10.1287/orsc.5.1.14
Nonaka, I., & von Krogh, G. (2009). Perspective—tacit knowledge and knowledge conversion: Controversy and advancement in organizational knowledge creation theory. Organization Science, 20(3), 635-652. doi: 10.1287/orsc.1080.0412
Patterson, W., & Ambrosini, V. (2015). Configuring absorptive capacity as a key process for research intensive firms. Technovation, (36-37), 77-89. doi: 10.1016/j.technovation.2014.10.003
Salter, A., Ter Wal, A., Criscuolo, P., & Alexy, O. (2014). Open for ideation: Individual-level openness and idea generation in R&D. Journal of Product Innovation Management, 32(4), 488-504. doi: 10.1111/jpim.12214
Saunders, M., Lewis, P., & Thornhill, A. (2009). Research Methods for Business Students (5th ed.). Essex: Pearson Education Limited.
Starbuck, W. (1992). Learning by knowledge-intensive firms*. Journal of Management Studies, 29(6), 713-740. doi: 10.1111/j.1467-6486.1992.tb00686.x
Strauss, A., & Corbin, J. (1998). Basics of Qualitative Research: Techniques and Procedures for Developing Grounded Theory (2nd ed.). California: SAGE Publications.
Teece, D. (2003). Expert talent and the design of (professional services) firms. Industrial and Corporate Change, 12(4), 895-916. doi: 10.1093/icc/12.4.895
Teece, D. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319-1350. doi: 10.1002/smj.640
Thompson, J. (1967). Organizations in Action, New York: McGraw-Hill.
Todorova, G., & Durisin, B. (2007). Absorptive capacity: Valuing a reconceptualization. Academy Of Management Review, 32(3), 774-786. doi: 10.2307/20159334
Van den Bosch, F., Volberda, H., & de Boer, M. (1999). Coevolution of firm absorptive capacity and knowledge environment: Organizational forms and combinative capabilities. Organization Science, 10(5), 551-568. doi: 10.1287/orsc.10.5.551
Volberda, H., Foss, N., & Lyles, M. (2010). Perspective-absorbing the concept of absorptive capacity: How to realize its potential in the organization field. Organization Science, 21(4), 931-951. doi: 10.1287/orsc.1090.0503
von Hippel, E. (1998). Economics of product development by users: The impact of “sticky” local information. Management Science, 44(5), 629-644. doi: 10.1287/mnsc.44.5.629
von Nordenflycht, A. (2010). What is a professional service firm? toward a theory and taxonomy of knowledge-intensive firms. Academy of Management Review, 35(1), 155-174. doi: 10.5465/amr.35.1.zok155
Yin, R. K. (2003). Case Study Research: Design and Methods. California: SAGE Publications.
Yin, R. K. (2009). Case Study Research: Design and Methods (4th ed.). California: SAGE Publications.
Zahra, S., & George, G. (2002). Absorptive capacity: A review, reconceptualization, and extension. Academy of Management Review, 27(2), 185-200. doi: 10.2307/4134351
Zapata, R., G., J., & Hernández A., A. (2018). Absorptive capacity: A literature review and a model of its determinants. Retos Revista de Ciencias de la Administración y Economía, 8(16), 119-137. doi: 10.17163/ret.n16.2018.09
Zobel, A. (2016). Benefiting from open Innovation: A multidimensional model of absorptive capacity. Journal of Product Innovation Management, 34(3), 269-288. doi: 10.1111/jpim.1236
