The ‘Absorp­­­­tive Capacity’ Theory

August 10, 2017

The ‘Absorp­­­­tive Capacity’ Theory

Professor Rhodri Thomas of Leeds Beckett University recently led a roundtable for the Association of British Professional Conference Organisers (ABPCO) on the theory of absorptive capacity. Heather Lishman, Association Director of ABPCO explains some of the key outcomes below.

The term ‘absorptive capacity’ is used to identify an organisation’s ability to assimilate, transform, and apply valuable external knowledge. The theory has steadily grown in popularity and the term has been used widely at the organisational level to analyse innovation processes and the effect of organisational learning on the creation of sustainable competitive advantage. Absorptive capacity goes far beyond knowing the obvious things about the micro climate in which a company operates. Instead it takes a macro look at a business and its competitive position. It appreciates all the factors that can affect change both for better or worse and allows an organisation to truly understand its market position.

An organisation with high absorptive capacity is one with an outward-looking business strategy where staff, and especially managers, are encouraged to be ‘boundary spanners’ i.e. they gather knowledge from many different types of sources and not just the obvious. It has a pulse on what is happening in the market-place, and is able to utilise this broader insight to keep ahead of the competition. Ultimately, it puts a business on the front-foot and equips them with the knowledge that will help them to understand their place in the competitive landscape, and to see opportunities in the political, economic, social, technological, environmental and legal factors that affect their business environment.

For professional conference organisers and associations, it is imperative that they keep bang up to date with innovations and engagement strategies. Not only will they be able to utilise this knowledge within their own organisations, but they can apply it when they are organising conferences. It is vital in the world of meetings that the event attendees acquire relevant knowledge and take this learning back to utilise effectively within their own environments, thus ensuring that they generate a return on investment for their time spent at meetings.

Research has shown that the ability to establish relevant networks and gather and use information is closely tied with an organisation’s ability to innovate and to remain competitive. The more familiar you are with your network, the more trust you will have and the more useful your data will be. Through shared information and trust, individuals stay ahead of the curve rather than simply reacting, which when combined with a strong sense and understanding of absorptive capacity creates a truly innovative way of thinking.

Staying up to date is critical for long-term survival as it can reinforce, complement or refocus the knowledge base. As professional leaders in their field, all professional conference organisers have an active role to play in bridging connections between acquired knowledge and generating innovation and competitive advantage – absorptive capacity is just one of many tools to help achieve this.

The Association of British Professional Conference Organisers (ABPCO) is a dedicated industry association representing professional conference organisers. Its mission is to develop and enhance the status of conference and event organisers and increase the recognition given to its members. www.abpco.org / hello@abpco.org