Managing absorptive capacity stocks to improve performance: Empirical evidence from the turbulent environment of Israeli hospitals

Abstract

Summary The current paper focuses on the management of external knowledge as a central mechanism when organizations face threats from turbulent environments. Based on absorptive capacity (ACAP) theory, we emphasize ACAP's separation into potential and realized knowledge and suggest that each should be associated with three-dimensional stocks and distinguish between managing knowledge stocks and knowledge flows. Data from 522 managers from 12 Israli hospitals support the theoretical model. Organizations that manage both potential and realized ACAP stocks achieve better performance in a turbulent environment. The paper explores the practical and theoretical contivutions of the new suggested framework by linking environmental competitiveness, ACAP stocks, and performance.Hospital performance Knowledge flows and stocks Environmental competitiveness Potential and realized absorptive capacity