This thesis builds on the theoretical framework developed by Cohen and Levinthal as well as Zahra and George and Jansen et al. on absorptive capacity to analyze the process of internalizing externally purchased knowledge in a power utility company. I interview employees about their R&D projects and the mechanisms involved in these knowledge transfer processes. I argue that the structure of the R&D organization can constrain or improve the firm’s ability to fully exploit its combinative capabilities and thereby increasing its technology and knowledge transfer success rate. I made some interesting findings on the influence of organizational dimensions on managerial dimensions.