SMEs and the skilful management of absorptive capacity cycle

SMEs typically lack of slack resources to develop a broad spectrum of capabilities internally and to observe the firm’s environment in depth. Therefore, they carefully need to develop abilities to absorb knowledge from outside the firm’s boundaries to have access to cutting-edge knowledge although their resources are limited. One strategy is to establish KM projects for this purpose. In this paper, we describe how KM projects and subsequently emerging KM practices in SMEs facilitate the enhancement of the firm’s AC (i.e. the ability to recognize, capture and assimilate external knowledge). Our results show that KM projects structure the way SMEs recognize the value external knowledge and to develop the necessary routines to capture and to assimilate it subsequently. However, these AC processes follow different logics (exploration vs. exploitation) and, thus, a skilful management of the complete AC cycle is necessary to fully profit from externally absorbed knowledge.