Can Virtual Networks Encourage Knowledge Absorptive Capacity?

Abstract

Organisations are finding it more difficult to keep abreast with the pace of change. The continuous rise of business opportunities and the increase in global competition demands a capability to acquire, assimilate, transform and apply external critical knowledge to renew and reconfigure existing capabilities and knowledge, and to innovate. Developing this dynamic capability requires, in turn, new proactive Knowledge Management tools and new organisational forms. This chapter presents a framework in which virtual networks constitute more flexible new organisational structures to absorb and create knowledge. It also describes how embeddedness in such a network can affect most of the factors identified as antecedents of absorptive capacity. In addition, it evidences the important role of the firm’s relational capabilities in taking advantage of the relevant business information, knowledge, resources, technologies and capabilities circulating in the virtual networks.