Should Organisations Compete or Collaborate when Absorbing New External Knowledge?

Abstract

Organisations possessing significant resources (Resource Based View) or knowledge, as their significant capability (Dynamic Capability View), are often unaware of their own ability to acquire new knowledge entering the enterprise (level of absorptive capacity); this unawareness can lead to reduced marketplace performance and incorrect decision making, which may result in the wastage of organisational resources, including employee knowledge. This study highlights the key differences in absorptive capacity which firms possess, in the context of resource based and dynamic capability views. Based on these differing perspectives, options are provided for companies who wish to compete or mate/merge with competitors in the market, while discussion is given on the considerations that organisations must take before adopting a suggested option.