Does organizing for R&D mean organizing for Absorptive Capacity?

Despite the relevance of the absorptive capacity concept within the open innovation literature, scanty theoretical and empirical insights have been provided on how to better conceptualize and how to build a firm’s absorptive capacity. The paper adds to the literature in two ways. Firstly, it contributes to refine the conceptualization of absorptive capacity that help to specify the concept boundaries and the distinction from its antecedents. In this study we conceptualize ACAP as the ability to recognize and assimilate the external knowledge disentangling it from the R&D or transformative capacity. Second we identify and test the major organizational determinants of ACAP and we provide a first explorative insight on how to distinguish organizing for ACAP from organizing for R&D capacity. Our research design draws on a case study of a firm’s R&D department in a ten-year period (1999-2008) and its major organizational change implemented within this period. The change has been motivated by a conscious aim to encourage and support a more explorative approach to innovation, and some of the solutions implemented proved to be effective on enhancing firm’s ACAP. The findings unravel the organizational changes which specifically impacted on ACAP in terms of specialization (the creation of a R&D department and, within it, of expert centers and a formal gatekeeping unit), coordination mechanisms (the strengthening of informal network and knowledge repositories) and HRM practices (the investment in qualified human capital and an open communication climate). The in-depth analysis permits some significant new managerial implications to be drawn on improving the metrics of ACAP and on organizing to absorb external valuable ideas. The identification of different organizational solutions for ACAP and R&D capacity enables firms with scarce resources to select which type of capacity to organize for.