Comparing agility and absorptive capacity for superior firm performance in dynamic environment
by Vikas Verma; Sangeeta Shah Bharadwaj; Madhushree Nanda
International Journal of Business Environment (IJBE), Vol. 9, No. 1, 2017

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.

Online publication date: Wed, 21-Jun-2017

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