ISSN: 2319-7285
*Monari C. K. and Kuria J.T.
This paper seeks to highlight the various theories that support absorptive capacity and also act as critical foundations for this concept. The article divulges the relationship between the notion of absorptive abilities and these theories in strategic management and brings out their importance and overlaps. These theories are also interlinked and influence each other. The linkage between absorptive capacity and organizational learning process is emphasized. Under the innovation theory, new product development, research, and development as well as innovation tend to increase with a firm’s ability to adapt to external knowledge. Absorptive capacity is also influenced by managerial cognition; that is management’s perception of information will impact the absorptive capability of the firm. The knowledge-based view theory states that a combination of knowledge embedded in a firm as well as a firm’s combinative capabilities influences its absorptive capacity. The relationship between absorptive capacity and a firm’s exploratory adaptations are also accentuated.Recent studies have also portrayed absorptive capacity as a dynamic capability.