STRATEGY IMPLEMENTATION AND CONTROL
MNG3702
Absorptive capacity definition P101
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.
Four dimensions of absorptive capacity P102
1. Acquisition of external information
Refers to the ability of the organisation to acquire relevant information from its external environment.
May be limited to dominant management logic, information being restricted to what managers see relevant.
Speed is an important element of acquiring information – The better the quality and the sooner it is obtained,
the better the chances of developing it into an advantage.
2. Assimilation of acquired information
Refers to the ability of the organisation to analyse and make sense of the acquired information.
Interpreting, understanding and the ability to share the information across the organisation are crucial.
3. Transformation of knowledge
Refers to the ability of the organisation to combine new knowledge with existing knowledge and to develop
new insights.
4. Applying new knowledge
The real benefit of absorptive capacity occurs when organisations use the transformed knowledge and new
insights to improve their business operations and to develop new innovations and business ventures.
Learning organisation definitions
1st An organisation that enables and facilitates the continual learning of its members and uses learning and
knowledge to continually adapt to its environment as a means of remaining competitive.
2nd A learning organisation is an organisation skilled at creating, acquiring, and transferring knowledge, and at
modifying its behaviour to reflect new knowledge and insights.
Three key elements of learning organisations P105
1. The creation and acquisition of knowledge, referring to new knowledge being attained by individuals in the
organisation.
2. The transfer of knowledge (from one individual to others ).
3. The modification of behaviour (and making strategic decisions) to reflect new insights.
Becoming a learning organisation P105
Organisational learning is not as easy as putting in place a few people, processes and technologies. It requires a deep-
seated change in the way the organisation and its leaders view the world. The following mechanisms, to be used in
combination, are proposed to assist an organisation to become a learning one:
Leadership commitment to learning
Leaders should demonstrate their own commitment by being models of learning to generate a culture of
organisational learning.
1
, Building shared visions
Leaders need to develop genuine visions shared visions that will inspire employees in good times and bad and have
the power to bind an organisation together for the long term.
Encouraging diversity
Diversity in the organisation, especially in top-management, should be encouraged. The more people have divergent
views, the more likely they are to influence each other’s mental models and effect change.
Encouraging double-loop learning
Challenging existing mental models is critical to be a learning organisation, since our mental models can prevent new
powerful insights and organisational practices from becoming a reality.
Developing systems thinking abilities
Systems thinking refers to the ability to see the ‘big picture’, and to see patterns rather than isolated events. It
enables an organisation to understand its place and influence in the world.
Encouraging individual and team learning
Lifelong learning is an important element of a learning organisation. Learning should be designed into work so that
people can be trained on the job, while ample opportunities are provided for ongoing education and growth.
Legitimising dissent
In learning organisations, everybody should think and contribute ideas, and to this end, employees should be
encouraged to question key business practices and assumptions.
Encouraging experimentation
Without failure, there is no learning. For this reason, it is important to encourage experimentation and to see the
failures for what they are – learning opportunities.
Collaboration
Collaboration with suppliers, customers and even competitors is becoming a more and more common means of
fostering learning in organisations.
Knowledge management
A knowledge management system is a system that shares organisational knowledge and supports organisational
learning. The creation of an efficient system can contribute towards the creation of a learning organisation.
The process of knowledge management consists of the following four phases: P109
1. Discovering of knowledge in the organisation
2. Capturing the knowledge in a way that enables it to be shared across departments
3. Sharing knowledge throughout the organisation
4. Applying knowledge to solve business problems and make decisions.
Sustainable competitive advantage P130
Sustainable competitive advantage is determined by the durability of resources and how inimitable they are.
Refers to the length of time over which a capability is relevant and can contribute.
Durability
Refers to how easy or difficult it is for competitors to copy the competitive advantage.
Imitability
Refers to how easy or difficult it is to acquire or buy a resource.
Transferability
Refers to the ability to use the resource in other settings.
Replicability
2
MNG3702
Absorptive capacity definition P101
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.
Four dimensions of absorptive capacity P102
1. Acquisition of external information
Refers to the ability of the organisation to acquire relevant information from its external environment.
May be limited to dominant management logic, information being restricted to what managers see relevant.
Speed is an important element of acquiring information – The better the quality and the sooner it is obtained,
the better the chances of developing it into an advantage.
2. Assimilation of acquired information
Refers to the ability of the organisation to analyse and make sense of the acquired information.
Interpreting, understanding and the ability to share the information across the organisation are crucial.
3. Transformation of knowledge
Refers to the ability of the organisation to combine new knowledge with existing knowledge and to develop
new insights.
4. Applying new knowledge
The real benefit of absorptive capacity occurs when organisations use the transformed knowledge and new
insights to improve their business operations and to develop new innovations and business ventures.
Learning organisation definitions
1st An organisation that enables and facilitates the continual learning of its members and uses learning and
knowledge to continually adapt to its environment as a means of remaining competitive.
2nd A learning organisation is an organisation skilled at creating, acquiring, and transferring knowledge, and at
modifying its behaviour to reflect new knowledge and insights.
Three key elements of learning organisations P105
1. The creation and acquisition of knowledge, referring to new knowledge being attained by individuals in the
organisation.
2. The transfer of knowledge (from one individual to others ).
3. The modification of behaviour (and making strategic decisions) to reflect new insights.
Becoming a learning organisation P105
Organisational learning is not as easy as putting in place a few people, processes and technologies. It requires a deep-
seated change in the way the organisation and its leaders view the world. The following mechanisms, to be used in
combination, are proposed to assist an organisation to become a learning one:
Leadership commitment to learning
Leaders should demonstrate their own commitment by being models of learning to generate a culture of
organisational learning.
1
, Building shared visions
Leaders need to develop genuine visions shared visions that will inspire employees in good times and bad and have
the power to bind an organisation together for the long term.
Encouraging diversity
Diversity in the organisation, especially in top-management, should be encouraged. The more people have divergent
views, the more likely they are to influence each other’s mental models and effect change.
Encouraging double-loop learning
Challenging existing mental models is critical to be a learning organisation, since our mental models can prevent new
powerful insights and organisational practices from becoming a reality.
Developing systems thinking abilities
Systems thinking refers to the ability to see the ‘big picture’, and to see patterns rather than isolated events. It
enables an organisation to understand its place and influence in the world.
Encouraging individual and team learning
Lifelong learning is an important element of a learning organisation. Learning should be designed into work so that
people can be trained on the job, while ample opportunities are provided for ongoing education and growth.
Legitimising dissent
In learning organisations, everybody should think and contribute ideas, and to this end, employees should be
encouraged to question key business practices and assumptions.
Encouraging experimentation
Without failure, there is no learning. For this reason, it is important to encourage experimentation and to see the
failures for what they are – learning opportunities.
Collaboration
Collaboration with suppliers, customers and even competitors is becoming a more and more common means of
fostering learning in organisations.
Knowledge management
A knowledge management system is a system that shares organisational knowledge and supports organisational
learning. The creation of an efficient system can contribute towards the creation of a learning organisation.
The process of knowledge management consists of the following four phases: P109
1. Discovering of knowledge in the organisation
2. Capturing the knowledge in a way that enables it to be shared across departments
3. Sharing knowledge throughout the organisation
4. Applying knowledge to solve business problems and make decisions.
Sustainable competitive advantage P130
Sustainable competitive advantage is determined by the durability of resources and how inimitable they are.
Refers to the length of time over which a capability is relevant and can contribute.
Durability
Refers to how easy or difficult it is for competitors to copy the competitive advantage.
Imitability
Refers to how easy or difficult it is to acquire or buy a resource.
Transferability
Refers to the ability to use the resource in other settings.
Replicability
2
