Title: Comparing agility and absorptive capacity for superior firm performance in dynamic environment

Authors: Vikas Verma; Sangeeta Shah Bharadwaj; Madhushree Nanda

Addresses: Management Development Institute, Mehrauli Road Sukhrali, Gurgaon – 122 007, India ' Management Development Institute, Mehrauli Road Sukhrali, Gurgaon 122007, India ' Management Development Institute, Mehrauli Road Sukhrali, Gurgaon 122007, India

Abstract: With increased environment dynamism, firm agility has grabbed the attention of both researchers and practitioners. Firm agility has been conceptualised as dynamic capability comprising of sensing capability, responding capability and alignment between sensing and responding capability. Agility has often been compared with absorptive capacity, another dynamic capability. However, these comparisons lack depth. We compare and contrast agility with absorptive capacity. For this, we trace back the evolution of the two concepts which leads us to the emergence of convergence between the two. We then compare the two at construct level. We show how the sensing and responding components of agility are similar to potential and realised absorptive capacity components of Absorptive capacity. Through a review of alignment literature, we propose that agility could be a special case of absorptive capacity where potential and realised absorptive capacities are aligned for superior firm performance in dynamic environment. This convergence between agility and absorptive capacity could enrich dynamic capabilities frameworks for a dynamic environment.

Keywords: agility; absorptive capacity; alignment; fit; dynamic environment; dynamic capability; sensing; responding.

DOI: 10.1504/IJBE.2017.084703

International Journal of Business Environment, 2017 Vol.9 No.1, pp.1 - 17

Received: 22 Nov 2016
Accepted: 23 Nov 2016
Published online: 21 Jun 2017 *

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