Knowledge is considered the most important component of any organization, irrespective of the type of organization, their knowledge structures, the type of Processes and the type of the products they are producing (Nonaka, 1994). In the view point of resource based theory, knowledge is created inside the boundaries of the organization; therefore, Organizations focus on the value of their knowledge created by them inside their boundaries. They make it unique so that they are able to make their products significantly different from their competitors. Further, they apply their knowledge which they have created by them in such a manner that it becomes difficult for their competitors to copy it for their processes. In this way they make their knowledge a non-substitutable component of their organizations (Grant, 1991; Hitt et al, 2016; Nonaka,1991) However, in this turbulent environment it is not possible for any organization to create all the required knowledge inside their boundaries; therefore, most of the organizations upgrade their knowledge base by getting the required knowledge form outside their boundaries from different sources instead of generating all the knowledge inside (Grant, 1996; Teece et al, 1996; Cohen and Levinthal, 1990). The organizations require specific capabilities to acquire and absorb new knowledge coming from outside their boundaries and this capability is called absorptive capacity. Now-a-days instead of focusing on the single source of knowledge through their limited internal capacity to generate all the required knowledge, the organizations focus on enhancement of absorptive capacity (Cohen and Levinthal, 1990; Minbaeva et al, 2014). The construct “absorptive capacity” (ACAP) was introduced by Cohen and Levinthal (1990) and is defined as the ability of an organization to acquire new knowledge from outside the boundaries, its assimilation and application in its processes.