The absorptive capacity (AC) is the capability of organization or individual to internalize the external knowledge. (Fosfuri & Tribó, 2008 :Cohen & Levinthal, 1990). This process involves four phases. Acquire ,understand and assimilate, exploit. These phase are inter related and complement each other in creation of knowledge. The researcher has further subdivided in to two groups Potential absorptive capacity (PAC) consisting of acquisition and assimilation capabilities. The second subgroup Realized Absorptive capacity (RAC) comprising of transformation and exploitation capabilities (Zahra& George, 2002)24.
The PAC precedes RAC. The PAC relates to knowledge available outside the organisation which needs to be acquired first and then assimilated for the creation of knowledge;. Once the knowledge has been acquire then it is transformed and exploited or the utilization of knowledge (Lane et al., 2006; Setia& Patel, 2013)2526. PAC and RAC components can be conceptualized as second-order level constructs (Camisón&Forés, 2010).27
The PAC has two components Acquiring and assimilation. The acquire means getting the knowledge from external resources, it can be training, it can job rotation and observation. The second part assimilation in the knowledge acquired is correlated with existing knowledge base and integrate it .
The researchers have identified that at the individuals level same process of absorption is take place. The employee are on front line in main concept of AC of an organization and take specialized roles as “identifiers”, “assimilators” or “utilizers”.( ter Wale et al., 2011)
Previous studies has conceptualized AC explain innovation through theoretical models from different perspectives, for example, including “microeconomics” (Griffith, Redding, &Reenen, 2003; Koch &Strotmann, 2008)2829,” supply chain management” (Malhotra, Gosain, &Sawy, 2005)30, “strategic management and alliance formation” (Lavie&Rosenkopf, 2006; Lichtenthaler&Lichtenthaler, 2009; Tsai, 2001).313233.” individual level innovation” .( ter Wale et al., 2011)
The use of digital technologies in business is forcing the organization keep with the pace of technology change to maintain competitive edge. The organization interested in keeping the knowledge base update needs to involve the worker in continuous learning process, (García-Sánchez at el., 2017) 44. Further, as knowledge is acquired (potential absorptive capacity), it can be exploited (realized absorptive capacity). The changing business structure force organization to focus on PAC of individual. It will result in the Gap between in the ability and technical proficiency demands if new knowledge is not acquired and assimilated. Such gap give space to negative outcomes i.e turnover intention.
knowledge-oriented work environment may promote the absorption of external knowledge. Knowledge not only can be transferred from person-to-person but also includes person to group or a team, group or team to person or team or group to team or group (Syed-Ikhsan and Rowland, 2004; Sanchez-Vidal et al., 2016). In this sense, education and training can be the basis for strengthening constant knowledge transfer to help get employees engaged (Feiet al., 2009). Thus, managers, become the source and carriers of knowledge, for employee (Turner and Pennington, 2015)
Schreiber et al. (2011) argued that if the learning process of employee is poorly executed he will not able to properly acquire and assimilate the knowledge (Potential absorptive capacity) thus, lower contribution in knowledge transfer will have logical outcome , negative effect on employee’s job satisfaction