Consequently, this paper focuses on the analysis of the prospective aspect of absorption as the set of intensive routines in knowledge that will have a major impact on the generation of radical innovations.
Therefore, one must consider both the absorption capacity of the recipient organization and the dissemination capacity of the issuing organization, as both concepts must be analyzed together if the process of knowledge transfer wants to be fully known.
For a better development of the process of assimilation, it is important that the organization creates an adequate level of flexibility, which will enable it to effectively reconfigure its cognitive and resource base. In the prospective absorption capacity, the knowledge flows from the external environment into the inside of the organization, and once there, it must be adapted to a series of actions at different levels, which would transform it to meet the needs of the recipient organization.
Hypothesis
In the first phase of the process of absorption, known as acquisition, it is essential to highlight the importance of the relationships the organization maintains with different actors, by virtue of different government systems that act as knowledge sources [
14,
15], as well as the specific knowledge base previously accumulated [
19].
From the source of knowledge approach, different external sources can condition the process of posterior knowledge absorption through its multiple stages and, consequently, the achieved result [
6]. According to this approach, this study deems the amplitude and depth of third parties’ relations [
12] as precedents of the effective assimilation and exploitation of knowledge.
Several articles consider wider access to knowledge using multiple sources, [
28] although this will increase the complexity of the process [
29]. Regarding the study of the depth of these relationships [
3,
13,
24], it depends on the cognitive duration, trust and proximity between organizations. For instance, cognitive proximity is based on the similarity between knowledge bases, technological competences and the markets they supply to, which facilitates the communication and effective exchange between companies and can therefore improve their relationships [
30].
In summary, it is assumed that the results would be enhanced if the object of the absorption is linked to what it is already known by the company itself [
21,
26] and if the features of the source of knowledge are compatible with the ones in the recipient organization [
23].
Nevertheless, the need to create radical innovations will lead the organization to search for a cognitive distance with their own knowledge base, even if the process slows down [
31], as long as the organization reaches or does not exceed specific levels [
24]. Hence, finding the equilibrium in the cognitive factor will turn out to be fundamental to the development of this type of innovation.
Considering the cognitive proximity of the main sources of knowledge, the market would be the most afar one regarding the knowledge bases.
The positive effects of the market formula are outlined in the reduction of risks and costs derived from the development of their own knowledge in this way, overcoming what is called organizational inertia. This is because it breaks the purchasing company rigidities when enhancing their knowledge base [
6]. This source is based on the resource that it is obtained from it. However, the scarce specificity of acquired knowledge through the markets makes, at first, this source of knowledge barely appropriate to achieve radical innovations [
23,
32].
Secondly, as sources of knowledge, those based on relations are sustained in the long−term between agents. The alliances involve a closer cognitive proximity than the market and, consequently, they have become sectors with a high technological component. Therefore, they have become cornerstones of innovation strategies [
33], particularly when they take part in a worldwide plan for innovation management [
33,
34].
In this way, acquisition or access channels to resources and/or complementary valuable knowledge are provided in order to develop the dynamic and complex nature that radical innovations possess. In some cases, under certain circumstances, the period for obtaining these radical innovations could be reduced [
6].
Nonetheless, companies cannot always acquire valuable resources or knowledge in the strategic factors market or through cooperation partnerships. They might not exist, competitors can acquire them easily as well and they might not be financially attractive with respect to the associated costs [
35] such as small and medium sized enterprises (SMEs) [
9,
10].
Thus, other routines and sources of knowledge that have not received adequate attention in the context of capacity of absorption are proposed, particularly from an empirical perspective [
21,
33].
In relation to the issues raised in previous paragraphs, the focus of this paper is to differentiate between two models of alternative routines when accessing new knowledge beyond the strict boundaries of the organization, with particular focus on performance. First, we consider external relationships, if the acquisition of knowledge is made through formulas where the agents maintain a higher level of independence, either with specific market interactions between independent companies or by more stable cooperation agreements. Second, we look at the relations of a quasi−external nature, which is when the acquisition is carried out through other intensive knowledge and technology organizations. The company must have a significant participation in the capital stock of these other organizations.
The dynamic of the capacity of absorption shows the efficacy of significant participation in various intensive knowledge group companies. This option means reaching the maximum level of familiarity with a positive and beneficial effect, a feature that allows organizations to identify valuable resources in external organizational memories [
36]. In certain sectors with a higher technological component, business clusters have formed in order to look for certain diversity in the company’s technological knowledge base in that specific cluster. However, they still share cultural patterns and some organizational routines which help to reach that level of familiarity [
8]. In these sectors, participation in technological base companies facilitates the access to precious technological knowledge which allows, these companies achieve greater innovative positioning on the market [
37].
When a company does not possess a sufficient level of prior knowledge, it should to use more internal sources of knowledge acquisition through inter−organizational relations, rather than acquisition in the market or cooperation between external companies for its accumulation [
6]. In this sense, we express a positive relationship between the participation in group companies with a technological base and radical innovations, as they have a greater depth in their interaction with agents, which would ultimately improve the transfer of tacit and complex knowledge [
13,
18].
Based on the arguments expressed in previous paragraphs of this paper, we establish the first hypothesis of the model as follows:
Hypothesis (H1a). Significant participation in group companies with a technological base in the phase of acquisition has a meaningful direct effect on radical innovation.
The capacity of absorption arises as a consequence of the external and internal links which will be mutually affected [
38]. Hence, once the organization has externally identified and acquired the knowledge that is considered valuable, the organization could lose the richness derived from that new knowledge if it does not establish routines and internal connections that would allow the company to assimilate it.
In accordance with the description proposed in the assimilation phase, the focus of attention lies on the understanding of external knowledge that has been previously acquired. In this way, the company is able to foster the innovative potential of the organization after its appropriate application [
39].
The achievement of a radical innovation requires the employees involved to possess certain cognitive or psychological abilities to implement assimilation practices, such as risk acceptance or experimentation from past experiences [
40]. The possession of these cognitive structures and their use under the best conditions requires an analysis from a theoretical framework. This is based on the ability, motivation and opportunity [
41,
42] that permits both the employee´s individual characteristics and the design of a formal organizational structure in which those individuals can fulfil their duties to agglutinate. In this regard, three particularities are considered when enhancing the cognitive base that allows assimilation of the knowledge from an external source.
Firstly, for a company to assimilate knowledge in the right conditions it must have a sufficient number and an adequate design of job posts for qualified specialized technicians, scientists and engineers matching the specificities and requirements of the operations [
40]. The work of [
14,
43] contributes by providing empirical evidence that supports this argument, which shows a positive effect on the innovative potential of the organization.
The proper design of these job posts will offer the opportunity to develop the tasks of assimilation of external knowledge in optimal conditions [
44]. Additionally, over time the human capital behind these job posts will gain experience and eventually, they will become more capable of understanding how knowledge can be used in other contexts [
45,
46].
Secondly, the role of proper training and qualifications should be highlighted as it has great influence on the capacity of assimilation of new knowledge by human capital. Qualifications or educational level and trainings, both internal and external to organizations, enhance the management of knowledge and improve innovation by training the cognitive resources required [
25,
47].
Finally, the behavior an employee shows when developing a task will be conditioned by their own cognitive capacity as well as by his/her will to complete it. The psychological and emotional traits influence the degree to which an individual is inclined to complete a task, which means dimension should be considered [
48]. In relation to this will and based on the theories of motivation [
49], motivation has been considered a factor that encourages an open attitude towards work and allows individuals to being fully aware [
50].
At an organizational level and with the purpose of obtaining the desired innovations, policies, routines and tools must be implemented in order to foster the will to assimilate new knowledge and make it compatible with the competitive mindset and work achievement of the people involved. Certain levels of structures and routines will enable the assimilation and interiorization of knowledge, even when the objective is to develop radical or disruptive innovations [
36].
Among these policies, the design and establishment of compensation structures has a prominent role [
44,
51].
As a result, the compensation system, particularly financial compensation, will be analyzed as a motivation tool in the development of the assimilation process. The amount of money allocated for salaries has an impactful influence at an individual and organizational level, as it conditions both behavior when managing knowledge and organizational results [
52], especially those related to innovate performance [
34].
To sum up, this paper deems that the design of specific job posts, qualifications and the employee´s compensation system related to innovative activity are crucial for the effective assimilation of knowledge.
For all the components mentioned above, the following hypothesis is related to the capacity of assimilation of the workforce involved in the dimension of assimilation of external knowledge:
Hypothesis (H2a). Assimilation routines of the external knowledge moderate the relationship between significant participations in group companies with a technological base and radical innovation.
The innovative process has positive effects on the organization´s income and on the market value these companies will reach. This will foster their own innovative mindset and will help them to pursue routines and activities destined to enhance their innovation and renewal capabilities [
53]. Nevertheless, further research is advised as a matter of linking certain resources and capacities related to research and development (R&D) activities for businesses [
54].
Significant studies link either directly or through a moderator role the capacity of absorption with financial and/or economic outcome within organizations [
55,
56,
57]. Nevertheless, some of those studies establish different effects on the results depending on the phase or dimension of the absorption capacity. For example, [
55] presented a curvilinear relation between the capacity of absorption and the company’s financial outcomes and positively associated the prospective capacity of absorption with the financial results, stressing the need to empirically deepen the partial effects of its dimensions.
Consequently, taking into consideration the business volume that comes from radical innovations, the last two hypotheses are presented:
Hypothesis (H1b). Significant participation in group companies with a technological base in the acquisition phase has a direct, impactful effect on the business volume outcome derived from a radical innovation.
Hypothesis (H2b). Assimilation routines of external knowledge regulate the relationship between significant participation in group companies with a technological base and the business volume outcome coming from a radical innovation.