Absorptive capacity in strategic management: evidence from digital technology-based SMEs

Objective of the study: This study aims to determine how organisational absorptive capacity (ACAP) component elements are embedded in the strategic management processes of digital technology-based small and medium-sized enterprises (digital SMEs). Methodology: Underpinned by the theoretical realms of strategic management and ACAP, we employed qualitative inquiry to extract the potential links between these two concepts from interviews and observations in the field. Originality/relevance: Our findings highlight evidence of planning and resource allocation aimed at leveraging external knowledge absorption as a strategic initiative in digital SMEs. Main results: Our findings revealed the following ACAP component elements integrated into the strategic management processes of the selected digital SMEs: knowledge absorption from 'inter-organisational partnerships'; innovation through knowledge absorption in 'customer relationships'; 'social capital' as a knowledge absorption enabler; and leveraging 'previous knowledge' to seize new opportunities. Theoretical/methodological contributions: This study contributes to the operationalisation of ACAP by linking its component elements to strategic management imperatives for digital SMEs. Social contributions/contribution to management: For practitioners, the implementation of processes related to the proposed links may support management in their strategic management endeavours.