International organizational performance: The influence of congenital learning and realized absorptive capacity

The purpose of this paper is to analyse the relationships between congenital learning (CL) and realized absorptive capacity (RACAP) and tries to identify whether absorptive capacity impacts on international organizational performance (IOP) in today’s global business environment.

The research model and hypothesized relationships are empirically tested using the structural equation modelling approach, validated by factor analysis of 128 small medium enterprises (SMEs) in the UK telecommunications sector.

The findings suggest that, in order to achieve higher levels of RACAP, managers need to create and support a CL process. Furthermore, if an SME does not achieve the required RACAP then IOP is likely to deteriorate.

SMEs need to provide and support a learning process, which is customized and based on three sub-processes: first, the framework for transferring knowledge; second, the framework for transforming knowledge; and third, an open organizational context. Based on these results, transferring and transforming are important sub-processes but are not sufficient for updating congenital knowledge.