close partnerships, which affect the extent to which the firm is able to extract tacit and more valuable knowledge from the other party or simply easy-accessible explicit information. In order to perform search operations, individuals in the organisation have to be empowered by the management to do so, acknowledging that it might result in changed organisational routines. Organisations prone to such search are often characterised by the ability to strike a proper balance between exploiting the existing knowledge base and organisational routines and at the same time exploring new avenues for changing the very same routines, if these are not aligned with the environment (Weick & Westley, 1996; Schumpeter, 1942). However, firms do not have unlimited search possibilities, but are limited in their search by the asset position and capabilities present in the firm. These constitute the absorptive capacity (Cohen and Levinthal, 1990), i.e. the ability to comprehend new knowledge. If the absorptive capacity is not sufficiently developed, the firm will simply miss out the signals from the environment resulting from a search. Searching the environment is imperative to foresee changes that potentially could render a firm’s competitive advantage obsolete. However, without the ability to adapt accordingly and implement the acquired knowledge, the firm stands little chance to successfully cope with the dynamic environment.
Integration We identified above that individuals, not organisations, undertake the search process. However, this process is not sufficient to allow for changing existing organisational routines, since the newly acquired knowledge still resides with the individual, who performed the search on behalf of the organisation (Argyris & Schön, 1996), rather it has to be diffused in the organisation in order to impact the existing organisational routines. Changing these routines is by no means a simple task, since firms are limited by chosen trajectories and populated by individuals who might be reluctant to change. Overall, a prerequisite for change of existing organisational routines is the presence of a core routine of changing organisational routines or in the words of Teece et al. “The capacity to reconfigure and transform is itself a learned organisational skill” (1997, p.521). This ability has to
28