Dynamic Capabilities, Absorptive Capacity and Knowledge Sharing: A Research Agenda into Explicating the Antecedent Factors Conducive to Subsidiary Bargaining Power

Marty Reilly, Dublin Institute of Technology
Pamela Sharkey Scott, Dublin Institute of Technology

Document Type Conference Paper

Academy of International Business (UKI Chapter) Conference Paper, Trinity College Dublin, April 2010


This research explores the relationship between relative absorptive capacity – a firm‟s proficiency at acquiring, assimilating, transforming and ultimately exploiting knowledge – and subsidiary bargaining power. In building upon the existing dynamic capabilities framework it is advanced that absorptive capacity, as a mediator, serves not only as a valid dynamic capability but also as an enabling mechanism and a vehicle by which subsidiary bargaining power can be achieved. The antecedent factors conducive to building relative absorptive capacity are critically evaluated and built upon in a subsidiary specific context. The contribution of these new factors provides insight into the enabling constructs conducive to building absorptive capacity as a dynamic capability in the subsidiary context and are proffered as; Strategic Posture, Network Inclusion, and Environmental Specific Factors. It is also posited that a subsidiary which is capable of exercising considerable bargaining power can leverage this position by insulating themselves to some extent from the threat of mandate loss.