Given fast technological change in the more advanced economies, closing the technological capability gap that separates Orange Electric Plc., is a necessary condition to put the latter on a path of sustainability. The importance of learning alliances to capability development places a premium on Orange Electric Plc.’s ability to identify, assimilate, and utilize a partner’s (Finland) knowledge. However, this is limited primarily to how they should be structured and managed. Therefore, it is important that such operational issues as when Orange Electric Plc. may need to form a joint venture to nurture learning and how successful alliances are managed day-to-day.
It is proposed that Orange Electric Plc.’s absorptive capacity, its ability to…show more content… There are four different but complementary dimensions of absorptive capacity: acquisition, assimilation, transformation, and exploitation. These four elements must progress chronologically (Gatignon & Anderson, 2008). Broadly speaking, there are two factors affecting Orange Electric’s absorptive capacity. One factor is internal factors, such as organizational structure, size, strategy, prior knowledge base, and organizational responsiveness; the other one is external factors, which include external knowledge environment and Orange’s position in knowledge…show more content… Orange Electric has to decide the nature of the organizational structure as a functional organizational structure permits a high efficiency of absorption, but a limited scope and flexibility of absorption.
Cross-functional communication creates opportunity for the internal transfer of knowledge within Orange Electric. Better internal communication enhances social integration mechanisms, which lower the barriers to information-sharing and increase the efficiency of assimilation and transformation capabilities.
Organizational culture, especially the distribution of power, also has great influence on absorptive capacity. Organizational inertia states that organizations tend to stick to their existing strategies and have a natural tendency to resist change. This is the main impediment to Orange Electric Plc.’s ability to respond and adapt to changes in its environment and is a common obstacle to the use of transferred