Fasten your seatbelts, turbulence ahead: Environmental turbulence as a determinant of absorptive capacity

Abstract

Absorptive capacity of an organization, or its ability to use externally generated knowledge for own benefit, is an important determinant of organizational success. At the same time, environmental turbulence is constantly reshaping business terrain, affecting organizations, resources at their possession and their capabilities. This paper investigates the impact of environmental turbulence on absorptive capacity, aiming to understand how much does the environment define the ability of organizations to learn from information generated externally. The results demonstrate that technological turbulence exercises the most influence on all facets of absorptive capacity of organizations, followed by the evolvement of new opportunities to apply their know-how. The speed of environmental change enhances continuing development and bottom-up subsets of absorptive capacity; exercising mostly negative influence on deferred knowledge use and trust-based internal cooperation.