6.  Scientia potentia est: Organizational Learning, Absorptive Capacity and the Power of Knowledge

An organization’s ability to learn from past experience and observation of the environment around it affects the efficiency and effectiveness of its operations. Organizational learning (OL) theory broadly defines this process in terms of seeking, interpreting, and using knowledge, with the process triggered by a reference gap and resulting in learning. The ability of the organization to leverage knowledge obtained through OL results in absorptive capacity (ACAP). ACAP specifically measures how the organization acquires, assimilates, transforms, and utilizes new information, resulting in both knowledge and commercial outputs and competitive advantages. While OL describes the construction of the knowledge base, ACAP describes how learning results in performance, flexibility, and innovation. ACAP is especially critical in rapidly changing, complex, or highly uncertain environments requiring the assimilation of a great deal of information in contexts which may not be programmable. Today’s digital environment, with the widespread availability of vast amounts of detailed, real-time information, renders the ability to screen, analyze, communicate, retrieve, store, and use new information into the key to increased performance, better organization–environment strategic fit, and lasting competitive advantage.