MNG3702 ASSIGNMENT 1 2026
DUE 28 AUGUST 2026
Question 1 Make a judgement with regard to the absorptive capacity of The Coca-
Cola Company. In your answer, define the concept of absorptive capacity and
then make a judgement with regard to the absorptive capacity of the Coca-Cola
Company based on the four dimensions that determine the absorptive capacity of
an organisation.
1.1 Definition of Absorptive Capacity
Absorptive capacity refers to the ability of an organisation to recognise the value of new,
external information, to assimilate it, and to use it to address business problems
(University of South Africa, 2020, Lesson 3, Section 3.2). According to Venter and
Botha (2022, p. 265), absorptive capacity is a strategic capability that differs from
organisation to organisation, so that some have a higher absorptive capacity than
others, and would accordingly be able to learn much faster and to adapt more quickly to
their environments, or to innovate. The concept is fundamental to organisational
learning and competitive advantage, as it determines how effectively an organisation
can acquire, process, and apply new knowledge from its external environment.
1.2 Judgement on Coca-Cola's Absorptive Capacity
Based on the four dimensions that determine absorptive capacity, Coca-Cola
demonstrates a relatively high absorptive capacity, though with some limitations:
1. Acquisition of External Information
This dimension refers to the ability of the organisation to acquire relevant information
from its external environment (University of South Africa, 2020, Lesson 3, Section 3.2).
,According to Venter and Botha (2022, p. 265), this may be limited by their dominant
management logic, as the search for information will generally be restricted to what
managers think is relevant. Speed is an important element of acquiring information - the
better the quality of the information and the sooner it is obtained, the better the
organisation's chances of developing some sort of advantage from it.
Coca-Cola demonstrates strong acquisition capabilities, as evidenced by their
awareness of changing consumer preferences, health regulations, and environmental
pressures. The company's 2025 annual report identifies various risks including
"competition, changes in consumer preferences, economic strain, inflationary costs,
disruptions in supply, public health concerns, cyber threats, environmental pressure"
(Coca-Cola Company, 2026a), indicating active environmental scanning. This aligns
with Venter and Botha's (2022, p. 264) observation that dominant general management
logic acts as a filter, and Coca-Cola appears to have successfully recognised the
relevance of external information, particularly in response to health regulations and
sustainability concerns.
2. Assimilation of Acquired Information
Theoretical Explanation: organisation to analyse and make sense of the acquired
information (University of South Africa, 2020, Lesson 3, Section 3.2). Venter and Botha
(2022, p. 265) explain that interpreting and understanding the implications of new
information are crucial, as is the ability to share the information and knowledge across
the organisation. The organisation's capacity to process and interpret external data
determines whether it can effectively respond to environmental changes.
Coca-Cola shows strong assimilation capabilities, particularly demonstrated through
their response to the sugar tax. The company recognised that "established products
cannot be treated as perpetually secure" and responded through "reformulation, price
changes, and portfolio adjustments" (UNU-WIDER, 2025). This indicates the company
effectively interpreted and understood the implications of regulatory changes. Also, the
company's ability to share information across its global network, with five major
, operating segments "connected in ways that allow knowledge, capability and selected
innovations to move across the system more quickly" (Coca-Cola Company, 2026a),
demonstrates effective assimilation and distribution of acquired information.
3. Transformation of Knowledge
Transformation of knowledge refers to the abilities of the organisation to combine new
knowledge with existing knowledge and to develop new insights (University of South
Africa, 2020, Lesson 3, Section 3.2). Venter and Botha (2022, p. 265) emphasise that
organisations with high absorptive capacity can effectively integrate new information
with their existing knowledge base to create novel approaches and solutions.
Coca-Cola demonstrates this through their World Without Waste initiative, transforming
knowledge about environmental concerns into actionable strategies. The company set
revised targets for 2035 including "35% to 40% recycled material in primary packaging"
and "collection of 70% to 75% of equivalent bottles and cans introduced to the market"
(Coca-Cola Company, 2024b). The company's recognition that "packaging has evolved
into much more than a technical issue. It now involves procurement, infrastructure,
design, measurement, stakeholder cooperation, and public recognition" (Coca-Cola
Company, 2024b) indicates sophisticated transformation of environmental knowledge
into integrated business strategy.
4. Applying New Knowledge
The real benefit of absorptive capacity occurs when organisations use transformed
knowledge and new insights to improve their business operations and to develop new
innovations and business ventures (University of South Africa, 2020, Lesson 3, Section
3.2). Venter and Botha (2022, p. 265) note that the application of new knowledge is the
DUE 28 AUGUST 2026
Question 1 Make a judgement with regard to the absorptive capacity of The Coca-
Cola Company. In your answer, define the concept of absorptive capacity and
then make a judgement with regard to the absorptive capacity of the Coca-Cola
Company based on the four dimensions that determine the absorptive capacity of
an organisation.
1.1 Definition of Absorptive Capacity
Absorptive capacity refers to the ability of an organisation to recognise the value of new,
external information, to assimilate it, and to use it to address business problems
(University of South Africa, 2020, Lesson 3, Section 3.2). According to Venter and
Botha (2022, p. 265), absorptive capacity is a strategic capability that differs from
organisation to organisation, so that some have a higher absorptive capacity than
others, and would accordingly be able to learn much faster and to adapt more quickly to
their environments, or to innovate. The concept is fundamental to organisational
learning and competitive advantage, as it determines how effectively an organisation
can acquire, process, and apply new knowledge from its external environment.
1.2 Judgement on Coca-Cola's Absorptive Capacity
Based on the four dimensions that determine absorptive capacity, Coca-Cola
demonstrates a relatively high absorptive capacity, though with some limitations:
1. Acquisition of External Information
This dimension refers to the ability of the organisation to acquire relevant information
from its external environment (University of South Africa, 2020, Lesson 3, Section 3.2).
,According to Venter and Botha (2022, p. 265), this may be limited by their dominant
management logic, as the search for information will generally be restricted to what
managers think is relevant. Speed is an important element of acquiring information - the
better the quality of the information and the sooner it is obtained, the better the
organisation's chances of developing some sort of advantage from it.
Coca-Cola demonstrates strong acquisition capabilities, as evidenced by their
awareness of changing consumer preferences, health regulations, and environmental
pressures. The company's 2025 annual report identifies various risks including
"competition, changes in consumer preferences, economic strain, inflationary costs,
disruptions in supply, public health concerns, cyber threats, environmental pressure"
(Coca-Cola Company, 2026a), indicating active environmental scanning. This aligns
with Venter and Botha's (2022, p. 264) observation that dominant general management
logic acts as a filter, and Coca-Cola appears to have successfully recognised the
relevance of external information, particularly in response to health regulations and
sustainability concerns.
2. Assimilation of Acquired Information
Theoretical Explanation: organisation to analyse and make sense of the acquired
information (University of South Africa, 2020, Lesson 3, Section 3.2). Venter and Botha
(2022, p. 265) explain that interpreting and understanding the implications of new
information are crucial, as is the ability to share the information and knowledge across
the organisation. The organisation's capacity to process and interpret external data
determines whether it can effectively respond to environmental changes.
Coca-Cola shows strong assimilation capabilities, particularly demonstrated through
their response to the sugar tax. The company recognised that "established products
cannot be treated as perpetually secure" and responded through "reformulation, price
changes, and portfolio adjustments" (UNU-WIDER, 2025). This indicates the company
effectively interpreted and understood the implications of regulatory changes. Also, the
company's ability to share information across its global network, with five major
, operating segments "connected in ways that allow knowledge, capability and selected
innovations to move across the system more quickly" (Coca-Cola Company, 2026a),
demonstrates effective assimilation and distribution of acquired information.
3. Transformation of Knowledge
Transformation of knowledge refers to the abilities of the organisation to combine new
knowledge with existing knowledge and to develop new insights (University of South
Africa, 2020, Lesson 3, Section 3.2). Venter and Botha (2022, p. 265) emphasise that
organisations with high absorptive capacity can effectively integrate new information
with their existing knowledge base to create novel approaches and solutions.
Coca-Cola demonstrates this through their World Without Waste initiative, transforming
knowledge about environmental concerns into actionable strategies. The company set
revised targets for 2035 including "35% to 40% recycled material in primary packaging"
and "collection of 70% to 75% of equivalent bottles and cans introduced to the market"
(Coca-Cola Company, 2024b). The company's recognition that "packaging has evolved
into much more than a technical issue. It now involves procurement, infrastructure,
design, measurement, stakeholder cooperation, and public recognition" (Coca-Cola
Company, 2024b) indicates sophisticated transformation of environmental knowledge
into integrated business strategy.
4. Applying New Knowledge
The real benefit of absorptive capacity occurs when organisations use transformed
knowledge and new insights to improve their business operations and to develop new
innovations and business ventures (University of South Africa, 2020, Lesson 3, Section
3.2). Venter and Botha (2022, p. 265) note that the application of new knowledge is the
