Realized and Potential Absorptive Capacity: Understanding Their Antecedents and Performance in the Sourcing Context

Building on different research streams about the nature of knowledge transfers, this paper proposes a conceptual model for understanding knowledge transfer success among recipient companies in a sourcing relationship. Specifically, the role of potential and realized absorptive capacity is emphasized. These two learning components are discussed from two levels of analysis—potential absorptive capacity is discussed at the interorganizational level, and realized absorptive capacity at the intraorganizational level. Antecedents to potential absorptive capacity include three types of interorganizational contexts—knowledge, relational, and institutional. At the intraorganizational level, knowledge-based views of the firm stress how patterns of interaction and relationships among individuals facilitate knowledge integration within the organization. Two types of social context are emphasized—the extent of social embeddedness and closeness of interfunctional coupling. Implications for managerial practice are also discussed.