Organizational Culture as an Influencing Factor of the Capacity of SMEs to Absorb External Knowledge

Currently, many small and medium-sized enterprises (SMEs) are confronted with difficult market conditions, such as increasing globalization. In their efforts to maintain important positions in the marketplace and to compete globally, SMEs face a challenge: a lack of knowledge resources. Furthermore, the current economic crisis has weakened the financial health of many SMEs. As a consequence of these deficiencies in their internal financial resources, SMEs are unable to hire additional personnel or to invest in generating specific skills that would eliminate their knowledge-resource problems.To address these challenges, firms are increasingly opening their boundaries and actively collaborating with outside partners to access external knowledge that will enable them to successfully innovate and remain competitive in the marketplace. To recognize the value of external knowledge, assimilate it, and apply it to commercial ends, SMEs must have absorptive capacity, that is, the distinctive capacity to absorb knowledge.A knowledge-friendly organizational culture is the main influencing factor of absorptive capacity, in particular its acquisition capability, assimilation capability, transformation capability and exploitation capability, because people’s behavior can be better coordinated through implicit values and norms than through structural coordination instruments. A knowledge-friendly organizational culture is characterized by six dimensions: trust, collaboration, openness, autonomy, learning receptivity and care.Focusing on an organization’s overall behavior, which is increasingly important in the context of external knowledge absorption, it is important to investigate in detail how a knowledge-friendly organizational culture influences SMEs’ absorptive capacity. Therefore, the objective of this thesis is to develop and validate a model that allows an analysis of the relationship between organizational culture and the capabilities of absorptive capacity at the organizational level of SMEs and shows how a knowledge-oriented organizational culture should be designed to support the absorption of external knowledge.Several theories must be consulted to develop a model of SMEs’ external knowledge absorption: organizational learning, innovation, managerial cognition, knowledge-based view, dynamic capabilities and coevolution. From the perspective of these theories, hypotheses about relationships between the dimensions of organizational culture and the capabilities of absorptive capacity can be worked out and theoretically supported. These hypotheses imply a model of external knowledge absorption that is empirically manifested via quantitative methods.The empirical analysis shows that absorptive capacity is influenced by organizational culture: acquisition capability is the only capability of absorptive capacity that is not influenced by organizational culture. Assimilation capability, transformation capability and exploitation capability are positively influenced by different dimensions of organizational culture, but by the same number of dimensions — three — of organizational culture. Therefore, organizational culture is equally important for the three capabilities of an organization.Because this model is used both to describe the absorption of external knowledge and to explain the influence of organizational culture to derive a starting point for organizational-culture-driven control of external knowledge absorption, managers can learn methods of meeting the challenges of a knowledge-friendly organizational culture’s external knowledge absorption. Additionally, this thesis explains the implications of those measures for creating a trustful, collaborative, open and learning-receptive culture.To summarize, organizational culture generally is not positively related to the capabilities of absorptive capacity. Instead, a detailed differentiation of several dimensions of organizational culture is necessary to purposefully support external knowledge absorption in particular organizational cultures.