How to properly apply new external knowledge

the waterfall model of absorptive capacity and innovation




Absorptive Capacity, Knowledge Accumulation, Organizational Antecedents, Innovation


This article was an attempt to brief a new model of absorptive capacity and develop the concept of absorptive capacity which is a critical factor in applying, accumulating and linking new external knowledge to innovation. Through a comprehensive review of literature on absorptive capacity, authors ended up with the idea that the stream of new external knowledge in the waterfall model continually fosters all abilities of absorptive capacity. In addition, following knowledge spillover in each stage, abilities perform their activities. Knowledge accumulation is also another capability, which in this process, plays the role of linking absorptive capacity and innovation.


Barney. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120. 1991.

Benedetto, C. A. D., DeSarbo, W. S., & Song, M. (2008). Strategic capabilities and radical innovation: An empirical study in three countries. IEEE Transactions on Engineering Management, 55(3), 420-433.

Bosch, F. A. J. V. d., Volberda, H. W., & Boer, M. d. (1999). Coevolution of firm absortive caacity and knowledge environment: Organizational forms and combinative capabilities. Organization Science, 10(5), 551-658.

Chang, S. C., & Lee, M. S. (2008). The linkage between knowledge accumulation capability and organizational innovation. Journal of Knowledge Management, 17(1), 3-20.

Cohen, W. M., & Levinthal, D. A. (1989). Innovation and learning: The two faces of R&D. The Economic Journal, 99(397), 569-596.

Davenport, T. H., & Prusak, L. (1998). Working knowledge: How organizations manage what they know. Boston, Mass: Harvard Business School Press.

Dekoulou, P., & Trivellas, P. (2017). Organizational structure, innovation performance and customer relationship value in the Greek advertising and media industry. Journal of Business & Industrial Marketing, 32(3), 385-397.

Drucker, P. F. (1985). Innovation and entrepreneurship: practice and principles Harper & Row, Publishers, Inc

Drucker, P. F. (1993). Post-capitalist society. Boston, MA: Butterworth-Heinemann Oxford.

Escribanoa, A., Fosfuri, A., & Tribób, J. A. (2009). Managing external knowledge flows: The moderating role of absorptive capacity. Research Policy, 38, 96-105.

Fabrizio, K. R. (2009). Absorptive capacity and the search for innovation. Research Policy, 38, 255-267.

Fiol, C. M., & Lyles, M. A. (1985). Organizational learning. Academy of Management Review, 10(4 ), 803-813.

Galanakis, K. (2006). Innovation process. Make sense using systems thinking. Technovation, 26, 1222-1232.

Gruman, J. A., Saks, A. M., & Zweig, D. I. (2006). Organizational socialization tactics and newcomer proactive behaviors: an integrative study. Journal of Vocational Behavior, 69, 90-104.

Helfat, C. E., & Peteraf, M. A. (2003). The dynamic resource-base view: cpability lifecycles. Strategic Management Journal, 24, 997-1010.

Helfat, E., & Peteraf, M. A. (2003). The dynamic resource-based view: Capability lifecycles constance Strategic Management Journal, 24, 997–1010

Jansen, J. J. P., Bosch, F. A. J. V. D., & Volberda, H. W. (2005). Managing potential and realized absorptive capacity: How do organizational antecedents matter? Academy of Management Journal, 48(6), 990-1015.

Jensen, M. B., Johnson, B. o., Lorenz, E., & Lundvall, B. A. k. (2007). Forms of knowledge and modes of innovation. Research Policy, 36, 680-693.

Jia, P., & Xia, Q. (2008). Knowledge management, collaboration and innovation. Paper presented at the International Seminar on Future Information Technology and Management Engineering.

Keller, W. (1996). Absorptive capacity: on the creation and acquisition of technology in development. Journal of Development Economics, 49, 199-227.

Lane, P. J., & Lubatkin, M. (1998). Relative absorptive capacity and interorganizational learning. Strategic Management Journal, 19, 461-477.

Liao, S.-h., Wu, C.-c., Hu, D.-c., & Tsui, K.-a. (2010). Relationships between knowledge acquisition, absorptive capacity and innovation capability: An empirical study ontaiwan’s financial and manufacturing industries. Journal of Information Science, 36(1), 19-35.

Liu, H., Li, X., & Zhang, C. (2009). Why absorptive capacity is more essential in some situations? Paper presented at the International Conference on Information Management, Innovation Management and Industrial Engineering.

McKelvie, A., Wiklund, J., & Bennett, L. (2008). Modes of knowledge acquisition and innovation in different environments: an examination of new firms. Frontiers of Entrepreneurship Research, 28(19), 1-13.

Mello, A. M. d., Marx, R., & Salerno, M. (2012). Organizational structures to support innovation: How do companies decide? RAI – Revista de Administração e Inovação, 9(4), 5-20.

Murovec, N., & Prodan, I. (2009). Absorptive capacity,its determinants, and influence on innovation output: cross-cultural validation of the structural model. Technovation, 29, 859-872.

Nonaka, I. (1994). A dynamic theory of organizational knowledge creation. Organization Science, 5(1), 14-37.

Nonaka, I., & Nishiguchi., T. (Eds.). (2001). Knowledge Emergence: Social, Technical, and Evolutionary Dimensions of Knowledge Creation. New York: Oxford University Press.

Peters, L. D., & Johnston, W. J. (2009). Understanding absorptive capacity from a network perspective. Journal Business Management, 3(1), 29-50.

Porter, M. E. (1990). The competitive advantage of nations. New York: Free Press.

Rosenkopf, L., & Nerkar, A. (2001). Beyond local search: Boundary-spanning, exploration, and impact in the optical disk industry. Strategic Management Journal, 22, 287-306.

Schmidt, T. (2005). What determines absorptive capacity?

Schmidt, T. (2010). Absorptive capacity - one size fits all? A firm-level analysis of absorptive capacity for different kinds of knowledge. Managerial and Decision Economic, 31(1), 1-18.

Svetina, A. C., & Prodan, I. (2008). How internal and external sources of knowledge contribute to firms’ innovation performance. Managing Global Transitions, 6(3), 277-299.

Szulanski, G. (1996). Exploring internal stickiness: Impediments to the transfer of best practice within the firm. Strategic Management Journal, 17, 27-43.

Turi, J. A., Sorooshian, S., & Javed, Y. (2019). Impact of the cognitive learning factors on sustainable organizational development. Heliyon, 5(9), e02398. 2019.

Udayagiri, N. D. (1991). Knowledge spillovers and absorptive capacity: A model of technological learning. Portland, OR, USA.

Vega-Jurado, J., Gutierrez-Gracia, A., & Fernandez-de-Lucio, I. (2008). Analyzing the determinants of firm’s absorptive capacity: Beyond R&D. R&D Management, 38(4), 392-405.

Walesh, J. P., & Ungson, G. R. (1991). Organizational memory. Academy of Management Review, 16(1), 57-91.

Wang, D., & Chen, S. (2009). Human resource practices and organizational innovation performance in the prc: The mediating role of absorptive capacity. Paper presented at the Management and Service Science, 2009, MASS '09. International Conference on.

Xiu-mei, Z., Li, C., & Qi-guo, C. (2007). Emprical analysis on the mediating role of absorptive capacity between knowledge spillover and innovative performance of firms with high-tech industry cluster.

Zahra, S. A., Filatotchev, I., & Wright, M. (2009). How do threshold firms sustain corporate entrepreneurship? The role of boards and absorptive capacity. Journal of Business Venturing, 24, 248-260.

Zahra, S. A., & Geroge, G. (2002). Absorptive capacity: A review, reconceptualization, and extension. Academy of Management Review, 27(2), 185-203.

Zhixiong, X., & Yuanjian, Q. (2010). Research on knowledge absorptive capacity of enterprise. Paper presented at the Networked Computing (INC), 2010 6th International Conference on

Zhou, K. Z., & Wu, F. (2010). Technological capability, strategic flexibility, and product innovation. Strategic Management Journal, 31, 547-.