Implementation of Product Stewardship Strategy (PSS) requires integration of ‘voices of stakeholders’ in business decisions to create ‘differentiation’ in the market place. Considering that absorptive capability (AC) is a critical aspect of organizational learning, it may deliver dynamic integration of stakeholder's expectations and know‐how in decision making. This paper attempts to link the attributes of AC with the features of PSS and presents outcomes of an empirical study of sixty Indian firms from several industry sectors. The result shows that firms demonstrating the traits of AC are in better position to implement PSS. This study also expands the scope of AC by including the additional source of knowledge as societal‐stakeholders to provide a comprehensive view that this type of knowledge is complimentary to technological and market knowledge for sustainable commercial success. Based on the research findings, the paper proposes some important managerial implications and suggests direction for future research. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment