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The asymmetric effects of exploitation and exploration on radical and incremental innovation performance: An uneven affair
Abstract
Scholars have argued that the exploitation‐exploration interaction provides a source of competi‐tive advantage beyond that provided by each individually. However, we know little about the mutual effects of exploitation and exploration on either incremental or radical innovation per‐formance. To address this gap, we examine data from 171 manufacturing firms. We find incre‐mental innovation performance is highest when exploitation interacts with an intermediary level of exploration. Radical innovation performance, however, is solely driven by exploration. A coupling with exploitation is not effective. We contribute to the extant literature, first, by disen‐tangling the interaction effects of exploitation and exploration on radical and incremental inno‐vation performance, respectively. Second, we extend extant literature that agrees that main‐taining an appropriate balance of exploitation and exploration is critical for innovation perfor‐mance and that has conceptualized this balance as symmetrical presence and magnitude of ex‐ploitation and exploration. In particular, we provide evidence in support of an asymmetric rela‐tionship.
... The literature on organizational innovation has advanced from the unitary concept of innovation to dichotomous innovation formed from the segregation between incremental and radical innovation (Esma & Amine, 2024;Lennerts et al., 2020;Johnson, 2020;Dewar & Dutton, 1986); by realizing that the two possibilities of innovation sustain the competitive advantage of companies. ...
... Such expansion is not a phenomenon discussed recently, research since the 1980s such as that by Dewar and Dutton (1986) and Ettlie et al. (1984) discussed the dichotomy and application in organizations. Lennerts et al. (2020) present applications of radical and incremental innovation defined in Chandy and Tellis (1998) contemplating technological changes linked to innovation. For these authors, radical innovation is related to the development of new products or processes for new customers, while incremental innovation is related to changing products or processes in an adaptive way, that is, based on something existing, an adaptation is made with small technological changes. ...
... Some authors such as Lennerts et al. (2020), Dunlap et al. (2016) bring ambidextrous innovation, that is, radical and incremental simultaneously. This aspect is presented by Oliveira et al. (2014) when stating that the innovation actions developed by companies have the power to influence different aspects of the company's business. ...
This paper examines the influence of incremental and radical innovations on the survival capacity of micro and small companies (MSE) in contexts of economic crisis.State of the art on innovation points to a lack of a specific methodology to segregate incremental and radical innovation in MSEs. Identifying such a method allows for action to promote innovation in such more assertive companies, contributing to the survival of companies in the most adverse moments, such as crises.In this sense, a methodology was developed to identify the type and degree of innovation based on the level of innovation in the sector of activity and was applied to a sample of 60 companies in the textile retail sector. The dependent variable was business survival, measured by the continuity or cessation of activity in 2020. The estimate of the probability of survival was carried out using a binary logistic regression model.The dimensions of incremental innovation, which are the most common in the business environment, did not significantly affect survival. The dimensions of radical innovation, which imply deeper and more disruptive changes in the business model, had a positive impact. significant impact on survival in all cases. The most complex actions in the Solutions dimension increased the chances of survival by 42%; improving Processes by 39%; and innovation in the Square by 38%. These findings suggest that small businesses that adopt radical innovations have greater adaptability and resilience to adverse situations.
... Recent research has shown that strategic ambidexterity can help to promote product innovativeness, and it is critical for encouraging product innovativeness because it allows companies to effectively combine the requirement for innovation. Jordanian industrial SMEs need both strategic ambidexterity and manufacturing agility which important for enhancing product innovativeness due to limited resources, the dynamic nature of markets and the need to balance exploration and exploitation activities (AbuZaid, 2016;Kustyadji & Wijayani, 2021), by simultaneously focusing on both incremental improvements to existing products and exploring new opportunities, capabilities, and resources to produce new products, SMEs can adapt to changing customer preferences and technological advancements effectively and enhance the level of product innovativeness (Jacob et al., 2022;Jaidi et al., 2022;Lennerts et al., 2020). Considering the lack of research on the impact of market dynamism on manufacturing agility and product innovativeness, it is worth noting that Jordanian industrial SMEs often encounter highly competitive environments with increased market dynamism, particularly in the wake of the COVID-19 pandemic. ...
... Product innovativeness research has long emphasised the importance of exploration as significant capability drive product innovativeness (Jacob et al., 2022;Ali et al., 2024;Iborra et al., 2020;Lisboa et al., 2011;McCarthy & Gordon, 2011). On the other hand, radical and incremental innovation driven by exploration capability (Lennerts et al., 2020;Arnold et al., 2011, Atuahene-Gima, 2005de Visser & Faems, 2015). Additional research has shown that greater levels of product differentiation are achieved when there is a combination of exploratory product innovativeness, which involves creating new routines to develop new products, and exploratory marketing, which involves creating new routines to connect new products to customers (O'Cass et al., 2014). ...
... The relationship between exploitation and radical innovation can be complex complementary or contradictory depending on the context of the industry, companies, or specific innovation process (Lennerts et al., 2020;Arnold et al., 2011, Atuahene-Gima, 2005de Visser & Faems, 2015). Exploitation concentrates on variety reduction and efficiency improvements in current products, through exploiting existing resources and capabilities it may hinder radical innovation while increasing incremental innovation (Christensen & Bower, 1996). ...
The level of product innovativeness in Jordan is low. It is therefore beneficial to maintain a
balance between exploration and exploitation to improve the innovativeness of products.
This conceptual study aims to examine the factors that influence the product innovativeness
in Jordanian industrial SMEs. Three anchor theories have been used to conceptualise product
innovativeness: Resource-based theory, Dynamic capability theory and Contingency theory.
This study examines product innovativeness from the dynamic capability perspective, while
also considering the impact of a firm’s resources from the resource-based perspective and
the environment in which a firm operates based on Contingency theory. The quantitative
method employed, and data gathered through cross-sectional questionnaires. The data was
analysed using the Smart-PLS 3.3.3 structural equation model. This study has proven
beneficial for 1753 Jordanian industrial SMEs. The findings of this study provide practical
recommendations and guidelines for policymakers and the government to assess their
current policies and strategies to establish a framework for promoting product innovation in
Jordanian industrial SMEs.
... However, radical innovations require companies to take risks and face market uncertainty, so they must acquire cutting-edge market knowledge intelligently (Colarelli O'Connor & McDermott, 2004). According to this, prior to radical innovations, firms should be able to identify and absorb external knowledge (Lennerts et al., 2020). This endeavor is called exploration, an organizational capability implemented to seize and apply new knowledge (Arekrans et al., 2023;Greve, 2007). ...
... Radical innovation transforms and creates markets by creating novel lines of business (Lennerts et al., 2020). As radical innovation is a firm's strategic result without a market success precedent, this type of innovation is linked to high-risk organizational commercial projects, products, or services, which may highly impact the marketplace and create big returns for the firm (Colarelli O'Connor & McDermott, 2004). ...
... Many studies demonstrate that exploration capabilities enable organizations to develop radical innovations (Jurado-Salgado et al., 2024). According to theory, the generation, search, and learning of new knowledge enhance the development of new markets through radical innovations (Lennerts et al., 2020). Consequently, organizations must develop exploration capability before producing radical innovation (Naranjo-Valencia et al., 2017). ...
Aim/purpose – This study evaluates the influence of opportunity-enhancing human resource practices on radical innovation and examines the mediating role of exploration capability in this relationship. Design/methodology/approach – Hypotheses were formulated to determine the rela- tionship between opportunity-enhancing human resource practices and radical innova- tion, as well as the mediating role that exploration capability plays in this relationship. These were tested in 168 Colombian companies from the telecommunications and chem- ical-pharmaceutical sectors using Structural Equation Modeling (SEM) via the Partial Least Squares (PLS) technique. Findings – The study indicates that opportunity-enhancing human resource practices positively and significantly influence radical innovation. In addition, this relationship is mediated by exploration capability. Research implications/limitations – Organizations should implement opportunity- -enhancing human resource practices to support radical innovation development. These practices provide employees with opportunities to explore relevant knowledge and tech- nologies necessary for radical innovation. Originality/value/contribution – Identifying and testing a specific group of human resource practices that facilitate radical innovation is one of the most significant gaps in the scientific literature on the relationship between human resource practices and innova- tion. According to this article, opportunity-enhancing human resource practices facilitate radical innovation in organizations. Furthermore, previous research has not examined the relationship between opportunity-enhancing human resource practices, exploration capa- bility, and radical innovation. Keywords: exploration capability, radical innovation, opportunity-enhancing HR prac- tices, Structural Equation Modeling (SEM). JEL Classification: O3, M1.
... However, the empirical evidence on the effects of ambidexterity on performance is mixed. While some studies show positive effect (Gibson & Birkinshaw, 2004;Lubatkin et al., 2006), others show insignificant (Venkatraman, Lee, & Organizational Ambidexterity and Firm Performance Taiki Ito Iyer, 2007;Lennerts et al., 2020), or even negative effect (Athuahene & Gima, 2005). Also, in studies focusing on the balance between exploitation and exploitation, high exploitation needs to be combined with high exploration (i.e., a high-high combination) to achieve superior performance (Lennerts et al., 2020). ...
... While some studies show positive effect (Gibson & Birkinshaw, 2004;Lubatkin et al., 2006), others show insignificant (Venkatraman, Lee, & Organizational Ambidexterity and Firm Performance Taiki Ito Iyer, 2007;Lennerts et al., 2020), or even negative effect (Athuahene & Gima, 2005). Also, in studies focusing on the balance between exploitation and exploitation, high exploitation needs to be combined with high exploration (i.e., a high-high combination) to achieve superior performance (Lennerts et al., 2020). Owing to these variations, i.e., positive effects of a high-high combination (Katila & Ahuja, 2002) to insignificant (He & Wong, 2004) or negative effects (Atuahene-Gima, 2005) on a firm's performance, it is assumed that exploration and exploitation do not have a simple relationship. ...
... They performed a meta-analysis of existing organizational ambidexterity studies and suggested that the relationship between ambidexterity and performance is strongly influenced by moderator variables, but the relationship between balanced ambidexterity and performance itself is a positive. Later studies have also substantiated that ambidexterity improves firms' competitive advantage and performance (Luger et al., 2018;Papachroni et al., 2015;Lennerts et al., 2020). Therefore, controlling for other variables, we suggested that higher balanced ambidexterity positively related to firm performance. ...
Recent organizational ambidexterity studies have discussed the importance of achieving a balance between Exploration and Exploitation. However, existing studies have not distinguished the detail of exploitation; this study categorizes exploitation as ‘Repetitive Exploitation’ and ‘Incremental Exploitation.’ Our study contributes to ambidexterity studies by analyzing the impact of a combination of both these types of exploitation and exploration on a firm’s performance. We used 647 observations from Japanese video game industries between 1997 and 2019 for panel data analysis. In line with existing studies, we proved that firm performance increases when a balance between exploration and exploitation is achieved. At the same time, we found that firms with a lower exploration performed better when the rate of incremental exploitation was high. The results of our study suggest that even when the firm's ambidexterity is imbalanced, different results can be expected when both types of exploitation are considered. The Study has implications for organizations to improve their performance.
... Such activities are at the core of IWB and innovation. Radical forms of innovation require even higher levels of commitment and motivation (McDermott and O'Connor, 2002;Nguyen et al., 2022) because radical innovation represents the introduction of entirely new ideas and requires risk-taking behaviour (Chen et al., 2021;Lennerts et al., 2020). Moreover, radical innovation consists of a lengthy series of back-and-forth modifications to ideas which, without commitment and positive behaviours, are less likely to be successful and generally take a longer time (Barbara-Aragón and Jiménez-Jiménez, 2020). ...
... Incremental innovation is about making small changes to existing products and services (Jansen et al., 2006) as a response to market needs, and it takes less time to develop and implement (Hron et al., 2021). It has little reliance on technological advances and, because it involves minor modifications to existing production methods, products and services, it is associated with lower risk (Lennerts et al., 2020). Most importantly, incremental innovation does not aim to trouble the current game in the market and replace competitors; rather, the main aim is simply to continue surviving in the market and respond to customers' changing needs. ...
... This is captured in an item such as 'I feel emotionally attached to this organisation.' Finally, radical innovation was measured using five items from the scales set forth by Jansen et al. (2006), Lennerts et al. (2020) and Sumo et al. (2016). The scale measures the introduction of novel products and services and the introduction of new ideas. ...
The aim of this paper is to empirically study the impact of the motivation-enhancing practices of performance-based rewards and developmental performance appraisal on radical innovation. The effect of innovative work behaviour (IWB) is also considered as a mediator in this relationship. The paper also considers the effect of performance-based rewards and developmental performance appraisal on affective commitment and whether this mechanism can drive employees’ IWB. A survey questionnaire was used to collect data from employees working in the telecommunications, mining, pharmaceutical, banking and technological industries in Jordan. The final sample comprised 270 valid responses. Research hypotheses were tested via structural equation modelling (SEM) using AMOS v28 and PROCESS by Hayes to test the mediating effects. The paper found that IWB mediates the relationship between performance-based rewards, developmental performance appraisal and radical innovation because the subsequent effect of IWB on radical innovation was significant and positive. This is also confirmed by the mediation analysis. Findings showed support for the positive impact of performance-based rewards and developmental performance appraisal on affective commitment. Additionally, the findings confirmed that affective commitment mediates the relationship between performance-based rewards, developmental performance appraisal and IWB.
... Market exploration and exploitation individually are shown to be important for radical and incremental innovation, respectively (Atuahene-Gima, 2005). However, ambidextrous effects on these outcomes are mostly anecdotal, with inconsistent findings (Atuahene-Gima, 2005;Lennerts, Schulze, & Tomczak, 2020;Li, Lin, Cui, & Qian, 2018;Wang & Rafiq, 2014). These inconsistencies arise from different ambidexterity approaches-balanced versus combined. ...
... However, previous research paints a very contradictory picture of balancing and simultaneously managing market exploitation and market exploration, as well as the consequences (Atuahene- Gima, 2005;Ho et al., 2020;Ho & Lu, 2015). In past studies, ambidexterity has been described as either the simultaneous pursuit (interaction) or balanced execution (difference) of market exploration and exploitation, with empirical findings revealing both positive and negative effects on firm performance and new product innovation outcomes (Atuahene- Gima, 2005;Ho & Lu, 2015;Lennerts et al., 2020;Wang & Rafiq, 2014). Using interaction terms to measure ambidexterity considers the magnitude or higher levels of exploration and exploitation but fails to account for the balance or difference between the two (Hughes, 2018;Hughes et al., 2021). ...
... Further, the study considered potential some potential factors that were subject to influence the predictors and outcome variables. Earlier studies have identified that volatility in the firm market environment, and certain other factors such as firm size and firm age may change the results (Ho et al., 2020;Khan et al., 2020;Lennerts et al., 2020). Therefore, we controlled for these factors while estimating the main effects. ...
The existing literature acknowledges the implementation of ambidexterity at the firm level or within specific functional domains as a means to enhance new product innovation performance. However, the understanding of how ambidexterity can be achieved within the marketing function, referred to as market ambidexterity, and its impact on new product innovation outcomes remains limited. This study bridges this gap by integrating theoretical insights from inside-out and outside-in strategic perspectives, as well as contextual and within-functional ambidexterity literature. It proposes that two crucial marketing capabilities, namely inside-out and outside-in, play a vital role in fostering market ambidexterity, which subsequently improves new product innovation outcomes. Grounded in the specific context of emerging economy firms, the proposed model is empirically validated using data gathered from 292 manufacturing firms in Pakistan. The results show that both inside-out and outside-in marketing capabilities individually have an inverted U-shaped relationship with market ambidexterity. However, when these capabilities synergize, they significantly positively influence market ambidexterity, which in turn positively influences new product innovation outcomes. These findings have important implications for both theoretical understanding and practical application.
... Simply put, the greater employees' commitment and engagement, the more novel changes and modifications can be observed in the new products and services. Literature on radical innovation appears to be scant (Seeck and Diehl, 2017); extant literature asserts its importance for organisational survival, growth, performance and, ultimately, competitive advantage (Sheehan et al., 2023), but there is little emphasis on what drives it and what mechanisms come into play to sustain it (Andreeva et al., 2017;Lennerts et al., 2020). Rather, scholars have ignored radical innovation at all levels (i.e., when studying the antecedents of innovation, its importance and how to drive it), despite dwelling on critical factors, such as a "climate for innovation" and "competency", that mediate the relationship when treating innovation as an outcome. ...
... In their systematic review, Seeck and Diehl (2017) found only one study that looked at radical innovation from an HRM perspective. More recently, Lennerts et al. (2020), Beddow (2021) and Le and Le (2023) also found that very few studies have looked at the link between HRM and radical innovation. ...
... This is the main aim of this study because radical innovation has rarely been linked to or analysed based on employee issues and behaviours (Barba-Arag on and Jim enez-Jim enez, 2020); this paper aims to fill that gap by looking at the direct and indirect impact of HCWPs on radical innovation. While radical innovation can bring significant outcomes for the organisation, it is a time-and resource-consuming activity involving high risks (Lennerts et al., 2020) that requires positive employee behaviours and commitment (Aagaard, 2017;Thneibat et al., 2022). Therefore, this study aims to explore the link between HCWPs and radical innovation through the lens of IWB; the latter is expected to act as a mechanism explaining this link. ...
Purpose
Building on social exchange theory (SET), the main aim of this paper is to empirically study the impact of high-commitment work practices (HCWPs) systems on radical innovation. Additionally, the paper examines the mediating roles of employee innovative work behaviour (IWB) and knowledge sharing (KS) in the relationship between HCWPs and radical innovation.
Design/methodology/approach
Using a survey questionnaire, data were collected from employees working in pharmaceutical, manufacturing and technological industries in Jordan. A total of 408 employees participated in the study. Structural equation modelling (SEM) using AMOS v28 was employed to test the research hypotheses.
Findings
This research found that HCWPs in the form of a bundle of human resource management (HRM) practices are significant for employee IWB and KS. However, similar to previous studies, this paper failed to find a direct significant impact for HCWPs on radical innovation. Rather, the impact was mediated by employee IWB. Additionally, this paper found that HCWPs are significant for KS and that KS is significant for employee IWB.
Originality/value
Distinctively, this paper considered the mediating effect of employee IWB on radical innovation. Extant research treated IWB as a consequence of organisational arrangements such as HRM practices; this paper considered IWB as a foundation and source for other significant organisational outcomes, namely radical innovation. Additionally, the paper considered employees' perspectives in studying the relationship between HRM, KS, IWB and radical innovation.
... As firms strive to innovate and adapt to evolving environmental demands, they face the complex task of refining existing competencies while simultaneously exploring new possibilities in sustainable technologies [7][8][9][10]. This duality is further complicated by the asymmetric effects of exploitation and exploration strategies on diverse innovation outcomes [11]. The tension is particularly salient in knowledge-intensive industries undergoing sustainability transitions, where the refinement of learning strategies can significantly impact both environmental performance and competitive advantage. ...
... The impact of exploitation and exploration strategies on innovative performance has been a subject of extensive research in the organizational learning literature [2,5,6,11,15], with studies yielding mixed results. While some scholars advocate for a balanced approach, suggesting that firms should strive for ambidexterity-the ability to pursue both exploitation and exploration simultaneously [16,17]-others argue that the optimal balance may depend on contextual factors, such as industry characteristics, environmental dynamism, and firm-specific attributes [18]. ...
Optimizing knowledge exploitation strategies is a crucial challenge in promoting sustainable technology development. This study investigates how innovation characteristics, inventor attributes, and network structures influence the effectiveness of these strategies in firms’ green transition efforts. Our study focuses on the automotive industry—a sector characterized by long development cycles, high capital intensity, and strong path dependencies—as it undergoes a significant transition towards sustainable technologies. Using patent data from the Korean automotive industry, we uncover nuanced dynamics in the refinement and enhancement of green knowledge. While knowledge exploitation generally boosts innovative performance, this effect is significantly stronger for green innovations. Interestingly, high levels of inventor experience in green technologies weaken the positive impact of exploitation—a finding that challenges conventional expectations. Network structure also plays a pivotal yet often overlooked role: high network cohesion reduces the benefits of exploitation, while a broad network range enhances them. By shedding light on the hidden contributions of individual inventors and their networks, we deepen our understanding of the micro-foundations of green innovation within sustainability transitions. Our findings offer valuable insights for managers seeking to enhance their green knowledge strategies in industries undergoing technological shifts toward sustainability. We highlight previously underappreciated conditions under which exploitation strategies are most effective and factors that can be leveraged to elevate sustainable innovation performance through strategic knowledge enhancement.
... RGI serves as a transformative force, leading to ecofriendly technologies and services that provide a first-mover advantage in a green economy (Idrees et al., 2023a). RGI enhances a firm's adaptability to environmental regulations and customer demands, fostering sustainability and competitive advantage (Lennerts et al., 2020). ...
... Next, 12 items were used to assess two dimensions of GI, namely RGI and IGI, with each dimension being assessed by six items. The elements used in this study were sourced from Chen et al. (2014) and Lennerts et al. (2020). ...
This study examines the moderated mediation model grounded in the natural resource‐based view (NRBV) theory, evaluating the influence of green entrepreneurial orientation (GEO) on green competitive advantage (GCA) in Pakistani manufacturing firms. It emphasises the mediating role of green innovation (GI) and the conditional impact of green absorptive capacity (GAC). The study used hierarchical regression and moderated mediation analyses on a dataset consisting of 373 responses. The results reveal that GEO significantly influences GCA, with both radical and incremental GI (IGI) partially mediating this relationship. Moreover, the relationship between GEO, radical GI (RGI), and GCA is strengthened when GAC is high. The moderated mediating effects reveal that the mediating role of RGI is more pronounced when GAC is high. These findings provide valuable insights into enhancing green competitiveness by promoting eco‐innovation in manufacturing companies and advancing green entrepreneurship research.
... 30 Ferreira et al. 31 studied the direct influence of organizational ambidexterity on the innovative capacity of Portuguese firms and the indirect impact mediated by creativity, identifying a positive effect of ambidexterity on innovative capacity. Li et al. 32 analyzed the asymmetric impacts of exploration and exploitation on two types of innovation performance-radical and incremental -and observed exploration's positive effect on radical innovation performance and exploitation's effect on incremental innovation performance. Rafailidis et al. 33 investigated Greek SMEs to verify whether ambidexterity organizational cultures promoted innovation performance and found no impact of ambidexterity on SME innovation performance. ...
... Organizational ambidexterity is critical for firms to be able to assume a dominant position vis-à-vis competitors, achieving a competitive advantage when compared to their competitors. 10,[27][28][29][30][31][32][33][34][35][36][37] Concerning H2, the results support the hypothesis. A positive impact with statistical significance of organizational ambidexterity on digital capabilities (β = 0.14; p < .01) ...
This study investigates the impact of pre-COVID-19 organizational ambidexterity, digital capabilities, and organizational resilience on firms’ innovation behavior post the second COVID-19 wave. Utilizing World Bank business surveys from 2019 and COVID follow-up surveys in 2020 and 2021 across 21 countries (8,928 firms), we employ partial least squares structural equation modeling and necessary condition analysis. Findings reveal that organizational ambidexterity and digital capabilities positively influence innovation. Organizational ambidexterity indirectly impacts innovation through digital capabilities. The study emphasizes the crucial role of pre-COVID-19 organizational ambidexterity in catalyzing innovation, highlighting its synergy with digital capabilities. Recognizing and cultivating organizational ambidexterity, along with enhancing digital capabilities, are recommended for firms seeking competitive advantages. The study underscores the importance of leaders fostering ambidexterity and knowledge-sharing practices to drive innovation.
... We performed additional robustness tests to support our results. Based on the literature on exploratory innovation (Hubner et al., 2022;Lennerts et al., 2020;Xiao et al., 2022), we conducted two robustness tests. First, we added new control variables to test the robustness of the hypotheses proposed above. ...
... Demand complexity, technological uncertainty and competitiveness were chosen as the new control variables. These characteristics of the enterprise and the environment are not only important factors affecting innovation (Lennerts et al., 2020) but also consistent with the situation of high-tech companies (Abbate et al., 2021;Qian and Li, 2003). Each control variable was measured using one item: the item for demand complexity was "Customers demand increasingly better quality and reliability in the products and services that they buy"; the item for technological uncertainty was "Technological change in our industry is rapid"; and competitiveness was represented by the reverse-scored item "Competition is well established and entrenched." ...
Purpose
This study aims to explore how to overcome and address the loss of exploratory innovation, thereby achieving greater success in exploratory innovation. This phenomenon of loss occurs when enterprises decrease their investment in and engagement with exploratory innovation, ultimately leading to an insufficient amount of such innovation efforts. Drawing on dynamic capabilities, this study investigates the relationship between organizational foresight and exploratory innovation and examines the moderating role of breakthrough orientation/financial orientation.
Design/methodology/approach
This study used survey data collected from 296 Chinese high-tech companies in multiple industries and sectors.
Findings
The evidence produced by this study reveals that three elements of organizational foresight (i.e. environmental scanning capabilities, strategic selection capabilities and integrating capabilities) positively influence exploratory innovation. Furthermore, this positive effect is strengthened in the context of a high-breakthrough orientation. Moreover, the relationships among environmental scanning capabilities, strategic selection capabilities and exploratory innovation become weaker as an enterprise’s financial orientation increases, whereas a strong financial orientation does not affect the relationship between integrating capabilities and exploratory innovation.
Research limitations/implications
Ambidexterity is key to successful enterprise innovation. Compared with exploitative innovation, it is by no means easy to engage in exploratory innovation, which is especially important in high-tech companies. While the loss of exploratory innovation has been observed, few empirical studies have explored ways to promote exploratory innovation more effectively. A key research implication of this study pertains to the role of organizational foresight in the improvement of exploratory innovation in the context of high-tech companies.
Originality/value
This paper contributes to the broader literature on exploratory innovation and organizational foresight and provides practical guidance for high-tech companies regarding ways of avoiding the loss of exploratory innovation and becoming more successful at exploratory innovation.
... Gibson and Birkinshaw (2004) detect a strong positive correlation between both dimensions, while Fang and Levinthal (2009) underscore the role also played by exploration in the short term. Lennerts et al. (2020) reveal the direct and indirect effects of exploitation and exploration on performance. Other authors question the synergetic effect between the two dimensions (He and Wong, 2004;Lavie et al. 2010), the beneficial effects of the optimal combination on performance (He and Wong, 2004), and March's balance hypothesis itself (Lavie et al. 2011). ...
The literature on organizational ambidexterity emphasizes the complex relationship between the balance of exploitation and exploration and its impact on performance. However, the empirical research, while granting special attention to the study of types of ambidexterity and factors conditioning this phenomenon, has largely neglected to analyze balance. Our study is novel in tackling two knowledge gaps in the literature on organizational ambidexterity: the absence of quantitative analyses to pinpoint the optimal exploration–exploitation balance, and the lack of attention paid to the effect of risk on this optimal balance and on organizational ambidexterity in general. In order to address these knowledge gaps, the paper analyzes the technological exploitation-exploration relationship in conditions of uncertainty and the balance that maximizes Value at Risk (VaR) of firm growth. The methodology includes the elaboration of VaR, using the expected value and degree of dispersion in firm growth, and the combination of quantitative methods for hypothesis testing. Results obtained from a sample of 87,911 European firms from all sectors confirm the positive effect on the growth of harmonious efforts in exploration and exploitation, determining technological balance according to an organization’s risk-taking. The findings are relevant to theory and decision-making by managers and policymakers.
... By combining the parent firm's existing knowledge base with insights from complementary industries (Pinkow & Iversen, 2020), new knowledge can be created, leading to the development and launch of innovative products. Consequently, firms are likely to experience more efficient learning when investing in technologically similar ventures and are more inclined to expand into adjacent segments (Lennerts, Schulze, & Tomczak, 2020;Schildt et al., 2005), implying product portfolio change. Overall, we propose: ...
Incumbent firms use corporate venture capital (CVC) as an interorganizational learning mechanism to get access to new technologies or to study and enter foreign markets. When companies adapt their product portfolios or expand their business activities geographically, strategic change takes place. Nonetheless, research still lacks an understanding of CVC's impact on both dimensions of strategic change. Building on learning theory, we examine the impact of CVC activity on product portfolio change and geographic change using a sample of 1,458 CVC units and 6,751 transactions. Our study empirically shows that technology-related CVC investments lead to subsequent product portfolio adjustments, while investments in foreign start-ups drive geographic change. Our paper also finds that these positive change effects diminish with increasing industry and cultural distance, as higher investment uncertainty and risk arise from identifying (excessively) heterogeneous knowledge. Thus, increasing distance reduces the effectiveness of interorganizational learning and impedes strategic change. However, our paper confirms that CVC represents an effective catalyst for knowledge acquisition and related strategic change, offering practical insights for firms seeking to leverage CVC as a low-cost mechanism for product and geographic diversification.
... In times of rapid changes, innovation has become a critical source of competitive advantage. Numerous companies have successfully leveraged innovation to boost profits and expand market share, while others strive to harness innovation as a means to navigate market disruptions and strengthen their competitive edge (Lennerts et al., 2020). Innovation plays a crucial role in economic development and is a driving force behind organizational development and performance. ...
This study investigates the relationship between knowledge leadership and innovation from the perspective of employees, with knowledge sharing serving as a mediating factor. A total of 160 randomly selected employees completed the questionnaire. After validating the measures, the data were analyzed using structural equation modeling. The results indicate that the components of knowledge leadership —namely leadership skills, participation and trust, and knowledge integration and innovation—have a significant positive effect on the speed of innovation and knowledge sharing. Additionally, knowledge sharing plays a significant mediating role in the relationship between knowledge leadership and innovation speed. These findings suggest that managers and organizational leaders can accelerate innovation by fostering knowledge sharing through the development of leadership skills and targeted leadership training.
... Thus, organizations can leverage dynamic capabilities to balance explorative and exploitative innovations to enhance R&D performance. The connection between exploration, exploitation and R&D performance is gaining increased attention in the literature (Hung and Chou, 2013;Hou et al., 2019;Bustinza et al., 2020;Cho et al., 2020;Lennerts et al., 2020;Zhao et al., 2021). It is essential to delve directly into this relationship to gain a better understanding of it, and therefore, we propose the following hypotheses: ...
Purpose
This study aims to examine how an organization’s innovation capability could influence research and development (R&D) performance. It also investigates if industry–academic knowledge transfer has a moderating relationship between organizational innovation capability and exploration and exploitative innovation in improving the R&D performance of the organizations.
Design/methodology/approach
Based on the literature and dynamic capability view, a conceptual model was developed and then validated using the partial least squares-structural equation modeling technique considering 387 responses from academicians and industry personnel.
Findings
The study found that industry–academic knowledge transfer has a significant moderating impact toward improving innovation capability, organizations’ R&D performance and exploration innovation. However, it has an insignificant moderating impact on improving innovation capability and exploitative innovation.
Practical implications
Organizational innovation capability is characterized by both exploratory and exploitative innovation. Both types of innovation support the R&D performance of an organization. Also, organizations that closely work with academic institutions could gain significant R&D knowledge from academic expertise. This study provides food for thought for the academic community as well as industry policymakers.
Originality/value
There are significant opportunities for academic institutions to gain practical knowledge from industry which can help them to accelerate their R&D activities. However, transferring knowledge between industry and academia has challenges related to intellectual property, patents and so on. Not much research has been conducted in this area. Thus, the proposed research model is unique and adds to the existing literature.
... This is the only area where competitors cannot rapidly diminish (Arslan, 2020;Wiyono et al., 2021). Lennerts et al. (2020), discussed that innovation at different organizational degrees improves business operations' survival by upgrading business models, services, and new products that organizations can use, particularly when competition is fierce. As a result, the implementation of innovations by businesses will assist them in overcoming financial and economic challenges (Zhang et al., 2022). ...
Innovation is essential to sustain a competitive advantage in today's rapidly evolving business landscape. This study examines the influence of mimetic pressure—the inclination of businesses to emulate successful rivals—on opportunity-enhancing techniques to foster service innovation and secure a competitive advantage in the Maldives' resort sector. This analysis examines how these approaches enhance human and relational capital, with structural capital acting as a moderator in the resort sector of the Maldives. This study integrates the resource-based view (RBV) with institutional theory to identify the essential traits that foster innovation in resort firms within competitive tourism markets. The findings from interviews with 114 industry professionals and SEM-PLS analysis reveal a strong correlation among service innovation, human capital development, and mimetic pressure, all of which substantially enhance competitive advantage. These findings have substantial implications for resort managers and politicians in emerging economies, particularly in tourism-dependent nations such as the Maldives. Organisations can effectively increase innovation skills and maintain a competitive position by focusing on human resource and intellectual capital development. The study's findings are significant to expanding tourism economies since they provide practical recommendations for improving service quality, promoting sustainable growth, and increasing global competitiveness in culturally varied settings.
... In Brazil, the hotel segment has returned to pre-pandemic occupancy levels (2019), which is driving the construction of 124 hotels in 93 Brazilian cities (an estimated 18 thousand new rooms), with R$5.3bn (approximately US$1bn) in investments by 2026 (Embratur, 2024). Therefore, the hotel segment has directed efforts and resources into improving processes and products to achieve better carbon footprint levels (Koiwanit and Filimonau, 2021); however, to achieve this goal, hotels must coordinate among multiple agents (Luo et al., 2006;Shu et al., 2017), adopt specific management practices (Sourvinou and Filimonau, 2018;Xie et al., 2019) and constantly innovate, especially digitally (Deist et al., 2023;Lennerts et al., 2020). The hotel segment is thus an ideal segment for coopetition IJCHM 37,3 research (Rosa et al., 2023;Xin et al., 2023), and it offers a unique opportunity to verify the consolidation of the tourism innovation strategy in Brazil. ...
Purpose
The purpose of this article is to analysis of the effects of green innovation ecosystem coopetition (cooperation and competition), environmental management practices (EMPs) and digital innovation (DI) on carbon footprint reduction.
Design/methodology/approach
To conduct the study, a questionnaire was administered to hotel managers from different regions of Brazil. Data were collected from 197 hotels and analyzed via partial least squares structural equation modeling.
Findings
The results show that green innovation ecosystem cooperation positively and significantly affects EMPs and DI. Green innovation ecosystem competition interactions also benefit the adoption of EMPs. However, they do not significantly influence the use of DI. The results indicate that hotels that are in a scenario of simultaneous competition and collaboration (coopetition) within the green innovation ecosystem can reduce carbon emissions when EMPs and DI are used.
Research limitations/implications
The authors contribute to the literature by showing different pathways for reducing the carbon footprint of hotels. The results expand the authors’ knowledge by showing evidence that cooperation and competition interactions can produce distinct effects, especially on DI. Thus, this study has important practical implications for hotel managers seeking to improve their environmental practices and DI with the help of external multiagent resources and knowledge.
Originality/value
This research contributes to the literature by examining how cooperation and competition interactions in the green innovation ecosystem help in the adoption of environmental management and DI practices.
... Исследование определяется как изучение и дополнение технических знаний в новой области, незнакомой для фирмы раньше. Эксплуатация -это освоение технологий, которыми уже обладает сама фирма и (или) фирмы, её окружающие (Lennerts et al., 2019;Clauss et al., 2020;Mahmood, Mubarik, 2020). ...
... Employees are widely acknowledged as a company's most valuable asset [15][16][17]. Consequently, CSR research has increasingly focused on employee perceptions and participation in CSR initiatives [18], particularly emphasizing job satisfaction, organizational commitment, organizational citizenship behavior (OCB), employee engagement, turnover intentions, and job performance. ...
Recognizing the critical role of oil and gas resources as strategic assets and acknowledging the increasing emphasis on green development and social responsibility driven by international energy agreements and the “dual carbon” strategy, this study addresses the urgent need for a robust employee evaluation framework within China’s petroleum sector. While existing systems often prioritize competence-based indicators, they frequently overlook the crucial aspect of employee Moral Quotient (MQ). This research focuses on developing and validating a holistic, scientifically grounded, multi-dimensional, and dynamic MQ evaluation index system tailored specifically for Chinese petroleum enterprises. The study employed a mixed-methods approach, integrating a comprehensive literature review, semi-structured interviews with industry experts, and robust quantitative techniques, including the Analytic Hierarchy Process (AHP) and the entropy weight method. A two-round Delphi study, involving 18 experts from six provinces across China, ensured broad representation and facilitated the construction of the evaluation index system and the determination of indicator weights. The Delphi process achieved a high degree of expert consensus, evidenced by a 100% questionnaire response rate in both rounds, expert authority coefficients of 0.851 and 0.879, respectively, and Kendall’s coefficient of concordance of 0.243 and 0.247 (p < 0.01), respectively, demonstrating strong reliability and scientific validity. The resulting MQ evaluation index system comprises eight first-level indicators and thirty-three s-level indicators, encompassing key dimensions of employee morality relevant to the petroleum industry. This comprehensive system provides a robust and objective tool for employee selection, training, performance evaluation, and career development within Chinese petroleum enterprises, supporting informed decision-making in human resource management and fostering a culture of ethical conduct and sustainable development. Furthermore, the developed framework offers valuable insights and serves as a potential model for petroleum enterprises and other resource-intensive industries globally seeking to integrate MQ assessment into their human capital management strategies.
... Due to immediate and emerging benefits, top management may be more focused on exploitative activities compared to explorative ones. Further, recurrent failure in experimentation related to explorative activities may also become frustrating for top management (Lennerts et al. 2020). Additionally, explorative activities may also require external resources and knowledge, and top management may be unwilling to invest in these if existing resources, knowledge, and capabilities offer them a better return in terms of various performance measures (Cho et al. 2020). ...
Ambidextrous innovation is considered to be a key framework for innovation that offers organizations the ability to maintain their current level of competitiveness and develop and sustain a long-term competitive advantage. However, the implementation of ambidextrous innovation is constrained by an organization’s culture. Thus, the aim and objective of the present research are to explore the literature deeply and attempt to understand both organizational culture and ambidextrous innovation, along with key cultural aspects with regard to ambidexterity. The present research deeply dived into the model of organizational culture and attempted to build synergy between each model with respect to ambidexterity. The results of the present research suggest that Cameron and Quinn’s competing value framework, once amalgamated with the Schein model, creates an organizational culture framework that can be used to develop a culture that is best suited to the implementation of ambidextrous innovation. The Schein model provides a comprehensive guideline for each value of the competing value framework. Further, the present research also extracted key insights with regard to the role culture can play in innovation in general and ambidextrous innovation in particular. Finally, the present research also attempted to build a list of culture enablers and inhibitors that can facilitate and impede the process of ambidextrous innovation.
... By leveraging extensive experience in using pre-existing knowledge combinations, firms can reduce the likelihood of R&D failures, shorten technology quality improvement cycles, balance the predictability of innovation outcomes (Clauss et al., 2021), and coordinate/reconfigure outdated portfolios to achieve higher quality innovation with greater utility. KRR improves firms' understanding of complex linkages between knowledge bases, technical strengths or weaknesses, and applicable knowledge portfolio scenarios (Lennerts et al., 2020) to optimize technology development arrangements, expand applicability, and provide technical references for future innovation. ...
Knowledge recombination (KR) and technology innovation quality (TIQ) has received much attention. However, the mechanisms by which KR affects TIQ still lack further exploration. This study aims to explore the mediating role of relation dynamics (RDS) between KR and TIQ, and whether knowledge network decomposability (KND) moderates these relationships. Based on a panel data from 437 Chinese listed high-tech firms during 2000–2017, the hypotheses are tested using negative binomial regression in STATA 16.0. The results show that, first, knowledge recombination creation (KRC) not only directly improves TIQ, but also indirectly improves TIQ by promoting relation expansion (RE). Second, the relationship between knowledge recombination reuse (KRR) and TIQ is inverted U-shaped, which is partially mediated by relation stability (RS). Third, KND strengthens the influence of KRC or KRR on TIQ and the inverted U-shaped relationship between KRR and RS. This study enriches the research on the relationship between KR and TIQ, and provides theoretical support for technology management decisions in high-tech firms.
... Donde las organizaciones pueden alcanzar una ventaja competitiva apoyándose en estrategias de innovación (Ali, 2021), mediante productos y procesos para lograr una ventaja competitiva sostenible (Severo et al. 2020), logrando tener una herramienta para alcanzar las metas organizacionales (Farida et al., 2022), siendo la innovación fundamental en el crecimiento (Machuca et al. 2023), abarcando cambios en la manera de trabajo, factores de producción y procesos, generando tipos de innovación (Oslo,1992), radical impacto significativo en las empresas y las industrias en las que operan. (Machuca et al. 2023), disruptiva desafían el statu quo, ofrecen soluciones simples (Si et al. 2020), incremental es un enfoque poderoso para impulsar el crecimiento sostenible y el éxito a largo plazo (Lennerts et al. 2020), siendo la innovación radical como la clave para obtener ventajas competitivas, la misma que nace cuando es clave del aprendizaje organizacional, (Woźniak et al., 2019). siendo importante en el rendimiento de las PYMES (Kumar et al. 2021), es clave en la ventaja competitiva al crear nuevas posiciones que antes no existían y atraer más clientes (Kobarg et al. 2019). ...
El propósito de esta investigación fue estudiar la innovación radical y ventaja competitiva de las Pymes exportadoras de la Zona de planificación 1 del Ecuador; para lo cual se aplicó un estudio con enfoque cuantitativo de tipo descriptivo y de corte transversal, la técnica de investigación utilizada fue la encuesta donde se aplicó como instrumento de investigación el cuestionario, que buscó la recopilación y procesamiento de datos por medio de las escalas de Likert para medir la opinión y actitudes de los empresarios, se obtuvieron 43 respuestas válidas, se efectuó el análisis de fiabilidad mediante el Alfa de Cronbrach la cual fue adecuada y se realizaron pruebas de normalidad. Los resultados indican que las pymes exportadoras de la Zona 1 poseen un alto grado de innovación en sus productos, procesos, aprovechando oportunidades del mercado y la introducción de nuevos productos, además la ventaja competitiva de este tipo de pymes es alta debido a que responden rápidamente a los cambios en el mercado, buscando alianzas estratégicas, aprendiendo de los competidores, y todo esto con la oferta de nuevos productos. Se encontró que las variables de innovación radical y de ventaja competitiva se correlacionan de forma directa lo que conlleva una mejora continua de productos y procesos que permitan a las pymes ser más eficientes y tener un crecimiento acelerado con mayor rentabilidad.
... Strategic ambidexterity is defined as a concept in organizational management and strategy that refers to capability to reconcile two opposite strategies simultaneously and effectively integrate both exploration and exploitation strategies (Khan et al., 2022). According to literature review some studies explained the dimensions of strategic ambidexterity exploration and exploitation as strategies (Bernal et al., 2019;Chou et al., 2024;Clauss et al., 2021;Kim & Atuahene-Gima, 2010;Sirén et al., 2012;Wu et al., 2020) other studies explained exploration and exploitation as activities (Hubner et al., 2022;Jaidi et al., 2022;Lennerts et al., 2020;Voss & Voss, 2013) The last one explained exploration and exploitation as capabilities (Ali et al., 2024;Iborra et al., 2020;Jacob et al., 2022;Mccarthy & Gordon, 2011) this study based on dynamic capability and resource-based view theories will argue exploration and exploitation (strategic ambidexterity) as capabilities. The ability of a company to integrate, develop, and reconfigure internal and external competences in response to quickly changing environments referred to dynamic capability (Teece et al., 1997). ...
To enhance the level of product innovativeness in various countries, one solution that can betaken is to apply strategic ambidexterity, since strategic ambidexterity is important for enhancing product innovativeness due to limited resources ,the dynamic nature of markets and the need to balance exploration and exploitation activities, by simultaneously focusing on both incremental improvements to existing products and exploring new opportunities,capabilities, and resources to produce new products , SMEs can adapt to changing customer preferences and technological advancements effectively and enhance the level of product innovativeness this article reviews previously published research which linked strategic ambidexterity to product innovativeness. The steps of this review include searching,screening, evaluating, and synthesizing. According to the findings of this review, this study fills the gap in the literature by absorbing and integrating variables from various theoretical frameworks.
... Exploitive innovation concentrates on maximizing the value that may be extracted from existing resources and business models (Heidhues et al. 2016). Exploitive innovation can also be referred to as incremental innovation in which the key objective is to achieve operational excellence, process optimization, and gradual increases in productivity (Lennerts et al. 2020). On the other hand, the idea of exploratory innovation is to develop new ideas, products, services, and procedures. ...
Projects work under constant pressure of resource and time constraints. In order to perform effectively and efficiently, innovation seems to be a significant factor. However, due to the different nature of projects as compared to the organization, projects have been finding it difficult to undertake such innovation. However, ambidextrous innovation, which seeks to balance exploratory and exploitative innovation, offers a possible solution. However, research on the relationship between ambidextrous innovation and project management is at an early stage. The purpose of the present research is to undertake a systematic review of the literature to build and synthesize the understanding of innovation ambidexterity at the project level. Following the Preferred Reporting Items for Systematic Reviews and Meta Analysis (PRISMA) guidelines, our research collected data from the Web of Science and SCOPUS databases. By adhering to the PRISMA approach, we ensured a rigorous and transparent approach to the systematic review study, allowing for comprehensive data collection and analysis. The results of the present review study suggest that interest is building rapidly to incorporate ambidextrous innovation into project management. Ambidextrous innovation seemed to positively impact both the performance and capability of projects to undertake the innovation. Further, important drivers such as organizational culture, knowledge management, innovation activities, and agility play key roles in undertaking ambidextrous innovation at the project level. Further, elements of the team such as team integration, alignment, and knowledge utilization also play key roles. Finally, the avenue of future research has also been highlighted.
... We also conducted several further analyses to confirm our assumptions regarding the mechanism through which foreign executives influence firms' innovation performance. Dual innovation, which includes both incremental and radical innovation, was introduced to examine the impact of foreign TMT members on the heterogeneity of innovation performance [91]. Incremental innovation is defined as minor changes and modifications to firms' incumbent products and technologies, indicating cumulative and continuous improvements from existing technologies [92,93]. ...
This study investigates the effect of foreign executives on firms’ innovation performance and the mediation role of digital transformation in Chinese-listed firms from 2011 to 2021. Our findings indicate that the presence of foreign executives in top management teams promotes firms’ innovation performance by enhancing digital transformation. Further analyses show that foreign executives contribute significantly to improving firms’ radical innovation performance rather than incremental innovation performance. We also examine the moderating effect of negative performance feedback and financing constraints between foreign executives and innovation performance, finding that foreign executives can promote innovation performance particularly in firms with negative performance feedback and weak financing constraints.
... Incremental and radical innovations, which are categorized according to the degree of novelty of the innovation [11][12][13][14], have attracted the attention of academics and practitioners [15,16]. Radical innovations reflect a high degree of novelty, yet incremental innovations exhibit a lower degree of novelty [17][18][19]. Incremental innovation involves slight improvements to existing technologies, products, and services that can increase a company's market share, improve competitiveness, and strengthen its market position [20][21][22]. Radical innovation involves developing new technologies, products, or services and making existing ones obsolete, completely changing the competitive landscape and creating new business prospects [19,23,24]. ...
Innovation is critical for organizations seeking to build and maintain a sustainable advantage in the competitive market. This study aims to construct a moderated mediation model to examine the effects of incremental and radical innovations on competitive advantage, which considers the mediating role of innovation speed and the moderating role of a supportive culture. Data from 201 Chinese firms were collected through questionnaires and the research hypotheses were tested using multiple regression analysis and bootstrapping techniques. The empirical results show that incremental and radical innovations have a significant positive effect on competitive advantage. Radical innovation has a greater impact on competitive advantage compared to incremental innovation. Innovation speed mediates the relationship between incremental and radical innovations and competitive advantage. Supportive culture positively moderates the relationship between incremental and radical innovations and innovation speed. Moreover, supportive culture positively moderates the conditional indirect effect of incremental and radical innovation on competitive advantage through innovation speed. Theoretical and practical implications are further discussed.
... This finding aligns with prior research by both Raimi and Uzodinma (2020) and Ramos-Rodriguez et al. (2010), who highlight exploratory innovation's role as a key determinant in opportunity recognition, especially within financial contexts. Our findings accentuate the vital role of innovation capabilities in driving SME success, echoing the insights of Lennerts et al. (2020). This dynamic innovation approach empowers SMEs by providing access to vital contacts and specialized knowledge embedded within the microfinance network (Postelnicu and Hermes, 2018). ...
Purpose
This study aims to examine the role of big data marketing capability (BDMC) in shaping firms’ innovation behavior within the context of digital innovation. By defining BDMC and identifying its core dimensions, the study provides a framework for understanding how BDMC moderates the inverted U-shaped relationship between two key types of innovation – explorative and exploitative innovation – and their impact on innovation performance.
Design/methodology/approach
BDMC is conceptualized through five key dimensions: (1) big data-driven specialized marketing capability, (2) big data-driven customer relationship management (CRM) capability, (3) big data-driven channel and alliance management capability, (4) big data-driven brand management capability and (5) big data-driven market information and knowledge capability. A refined measurement scale for BDMC is developed based on these dimensions. Using hierarchical regression analysis and U-shaped tests, this study investigates how BDMC moderates the nonlinear (inverted U-shaped) relationship between explorative and exploitative innovation and innovation performance. Empirical analysis is conducted using data from 151 firms in the Chinese automotive manufacturing industry.
Findings
The results confirm the distinct effects of explorative and exploitative innovation on innovation performance, with these relationships significantly moderated by BDMC. Under experience-driven marketing capability, explorative innovation exhibits a positive linear effect on performance, while exploitative innovation follows an inverted U-shaped pattern. However, with BDMC, the relationship between explorative innovation and performance shifts to an inverted U-shape, while exploitative innovation transitions from an inverted U-shape to a U-shape, highlighting BDMC’s moderating role.
Originality/value
This study advances the literature by clearly defining BDMC, refining its measurement scale and assessing its moderating influence on innovation strategies. It contributes to the behavioral theory of the firm, the capability-based view and digital innovation theory by positioning BDMC as a pivotal capability that shapes firms’ ability to balance explorative and exploitative innovation. The study provides practical insights for firms undergoing digital transformation, offering a strategic framework for leveraging BDMC to enhance innovation performance.
Grounded in the resource‐based view and dynamic capabilities theory, this study investigates the interplay between organizational readiness (OR), green knowledge management (GKM) and environmental organizational culture (EOC) in fostering green innovation (GI). This study uses data collected from 340 respondents across 159 UAE SMEs and employs a quantitative approach using partial least squares structural equation modeling and moderated mediation analysis. The findings revealed that OR significantly influenced both radical and incremental GI. Additionally, GKM mediates the relationship between OR and both GI types. EOC was found to strengthen the positive effect of GKM on radical GI but not on incremental GI. Furthermore, the conditional indirect effects show that the mediating effect of GKM on the relationship between OR and radical GI is more pronounced when EOC is high, whereas this effect does not hold for incremental GI. These results provide critical insights for practitioners and policymakers. Organizations are encouraged to enhance readiness, implement robust GKM practices and foster a strong environmental culture to drive sustainable innovation. This study contributes to the theoretical framework of RBV and dynamic capabilities by elucidating the interconnected roles of OR, GKM and EOC in driving GI.
Although artificial intelligence has driven digital transformation in several countries and sectors, many large companies are still lagging behind in adopting these technologies. In fact, business managers remain unaware of the strategic role AI can play. Therefore, explaining the potential of AI and its strategic implications could be a viable solution to address this issue. In this context, this chapter explores how AI can enhance organizational performance by developing dynamic capabilities. Using a survey-based approach, we collected data from multinational firms in Tunisia to examine the indirect effect of AI adoption on organizational performance. Data was gathered from 226 multinational firms and analyzed through structural equation modeling. Our findings reveal that AI adoption positively impacts three key dynamic capabilities: exploration innovation, strategic decision-making speed, and exploitation innovation. These results highlight the strategic benefits of AI adoption in multinational firms, fostering capabilities that, in turn, enhance organizational performance.
Purpose
Open innovation platform has become an effective field through which enterprises can acquire valuable knowledge for incremental and breakthrough innovation. However, as more entities join the innovation platform, the knowledge activities in the platform ecosystem are now facing higher complexity and vulnerability due to the differences in the knowledge demands as well as conflicting interest claims of participants. The lack of mature governance mechanisms has caused opportunistic behaviors like knowledge infringement, leakage and hiding, which seriously hinder the in-depth knowledge sharing and effective utilization. What’s more, the enthusiasm for collaborative innovation also reduced among multi-subjects. Therefore, the purpose of this study is to improve platform participants’ innovation ambidexterity under the guidance of scientific design of platform knowledge governance mechanisms through improved knowledge transformation processes.
Design/methodology/approach
Therefore, based on knowledge governance theory and knowledge transformation model (SECI, socialization-externalization-combination-internalization), the study explored the influence of relationship and contractual knowledge governance on the innovation ambidexterity of platform participants through the mediation effect of knowledge transformation. To better analyze complex causal relationships among variables and the chain multiple mediation effect, structural equation modeling is used, coupled with bootstrap analysis verification.
Findings
Platform contractual governance and relationship governance can positively influence the innovation ambidexterity of participants through knowledge trading and reuse, as well as through knowledge sharing and creation. The findings not only contribute to optimizing the effectiveness of knowledge activities on digital platforms but also provide empirical evidence and practical insights to support enterprises’ incremental and breakthrough innovation according to their own knowledge bases.
Practical implications
The findings offer valuable insights for providing decision-making guidance not only for platform-leading enterprises but also for individual and enterprise users on effectively using open innovation platforms to conduct knowledge seeking, trading or sharing and knowledge reuse or creation to enlarge the incremental innovation value and to trigger breakthrough innovation value in their product and technology developments.
Social implications
Through diverse knowledge governance mechanisms, platform-leading enterprises do not only act as “economic agents” with private attributes to reduce knowledge asymmetry in the public trading market, diffuse knowledge broadly and mitigate cooperation costs to increase economic value; they also serve as “social actors” for multilateral participants to increase the cohesion of knowledge sharing and creation to provide sustainable knowledge fuel for the higher level of breakthrough innovation. Overall, knowledge arrangement efficiency can be optimized, and breakthrough innovation value can be activated in a well-governed platform, gradually escaping the diminishing marginal benefits of exploitative innovation.
Originality/value
This study has extended the views of the knowledge transformation model under the platform context and proposed dualistic knowledge transformation pathways, named “tacit knowledge socialization” and “explicit knowledge combination,” respectively. Besides, it discovered that under the contractual and relationship knowledge governance mechanisms’ guiding, participants in open innovation platforms may choose different knowledge searching and exchange ways according to their knowledge needs and thus trigger the different knowledge transform process. Then, “tacit knowledge socialization” transformation can show larger positive impact on breakthrough innovation, while “explicit knowledge combination” transformation makes larger impact on incremental innovation.
Purpose
Emotions are widely acknowledged decision-making drivers, taking the front seat when managers lack objective information. Existing evidence indicates that negative emotions often lead to the decision to retrench. Contrary to these insights, our research aims to show that negative emotions can sometimes push top managers to withdraw from retrenching marketing activities. By drawing on the affect-as-information approach, this study aims to examine the direct and conditional effects of top managers’ negative emotions on small and medium-sized enteprises (SMEs’) intention to retrench marketing activities during the recent economic crisis caused by the COVID-19 pandemic.
Design/methodology/approach
This study uses a descriptive research design and surveys a sample of 155 chief executive officers from business-to-business (B2B) SMEs in Croatia. The authors empirically test the conceptual framework with hierarchical regression.
Findings
Based on the sample of 155 top managers of SMEs operating in B2B industries, negative emotions positively drive marketing retrenchment. However, additional insights reveal that this relationship is conditioned by crisis severity and SMEs' strategic orientations (exploration and exploitation). The relationship between negative emotions and marketing retrenchment weakens for SMEs severely hampered by the crisis and for SMEs following the exploitative orientation. In contrast, this relationship becomes stronger for SMEs whose business customers have been severely hampered and for SMEs following exploratory orientation.
Originality/value
This research advances the body of knowledge by demonstrating that, depending on the severity of the crisis and the strategic orientation of the SME, top managers may interpret negative emotions quite differently, which eventually has lasting consequences on marketing retrenchment during crises. Therefore, by focusing on emotional microfoundations and unique crisis- and firm-level contingencies, this study goes beyond existing theoretical discussions that contrast marketing retrenchment vs investment and offers a different understanding of why and when SMEs retrench their marketing activities during crises.
The agricultural technology and system have contributed positively to the expansion of agricultural development in Indonesia. While the increased output benefits the majority of farmers, a subset experiences stagnation or even loss. Weather, fertilizer quality and availability, price, and marketing, among other variables, significantly impact the performance of a farm. The research object, Kartu Tani's system, was introduced in Indonesia in 2017; however, it only receives a one-third benefit from users, resulting in a twenty percent lower profit margin when compared to comparable products that use alternative fertilizers. The efficacy of digitization may be compromised in the absence of user readiness. Strategies (system role simplification) and business model approaches (system role modification) are methods for optimizing the kartu tani's system. By capitalizing on the momentum of digitalization and collaboration, significant innovations will be put forth. As a means of attracting users who are able to allocate greater financial resources, Kartu Tani has emerged as a pioneering advantage in agricultural systems.
The potential of artificial intelligence capabilities (AIC) extends beyond fostering both explorative and exploitative innovations; it may also enhance the overall performance of organizations. Despite this, the interplay between AIC, and research and development performance (RDP) remains unexplored. This research aims to fill this gap by investigating the influence of AIC on RDP, considering both explorative and exploitative innovations (EXO and EXI). Additionally, the study examines the potential moderating role of environmental dynamism (ED) in shaping the relationship between AIC and the two types of innovations, ultimately impacting the enhancement of RDP in organizations. To achieve this, a conceptual model was developed based on existing literature and subsequently validated using the PLS-SEM. The research gathered 289 responses from a diverse group of industry professionals. The findings of this study contribute both theoretically and practically by shedding light on the pivotal role played by AI capabilities, exploration, and exploitative innovation in improving the R&D performance of organizations. Understanding these dynamics will provide valuable insights for organizations seeking to leverage AI for strategic advancement in their R&D endeavors.
Purpose
This study aims to explore how not-for-profit organisations (NFPs) adopt service innovation and improve their employee resilience capabilities as a response to environmental changes arising from marketisation of public services.
Design/methodology/approach
Using a multiple case-study research design, this study involved 32 interviews with frontline employees working in a not-for-profit care-providing organisation.
Findings
This study finds that the development of absorptive capacity can facilitate service innovation adoption in NFPs and improve employee resilience in times of transition.
Originality/value
This study offers theoretical insights on service innovation, absorptive capacity and employee resilience in NFPs. It makes practical recommendations that will enable NFPs to help frontline employees better adopt service innovation practices in business models endorsed by the private sector.
Purpose
This study attempts to explore the linkages between reliable big and cloud data analytics capabilities (RB&CDACs) and the comparative advantage (CA) that applies in the manufacturing sector in the countries located in North Africa (NA). These are considered developing countries through generating green product innovation (GPI) and using green process innovations (GPrLs) in their processes and functions as mediating factors, as well as the moderating role of data-driven competitive sustainability (DDCS).
Design/methodology/approach
To achieve the aim of this study, 346 useable surveys out of 1,601 were analyzed, and valid responses were retrieved for analysis, representing a 21.6% response rate by applying the quantitative methodology for collecting primary data. Convergent validity and discriminant validity tests were applied to structural equation modeling (SEM) in the CB-covariance-based structural equation modeling (SEM) program, and the data reliability was confirmed. Additionally, a multivariate analysis technique was used via CB-SEM, as hypothesized relationships were evaluated through confirmatory factor analysis (CFA), and then the hypotheses were tested through a structural model. Further, a bootstrapping technique was used to analyze the data. We included GPI and GPrI as mediating factors, while using DDCS as a moderated factor.
Findings
The empirical findings indicated that the proposed moderated-mediation model was accepted due to the relationships between the constructs being statistically significant. Further, the findings showed that there is a significant positive effect in the relationship between reliable BCDA capabilities and CAs as well as a mediating effect of GPI and GPrI, which is supported by the proposed formulated hypothesis. Additionally, the findings confirmed that there is a moderating effect represented by data-driven competitive advantage suitability between GPI, GPrI and CA.
Research limitations/implications
One of the main limitations of this study is that an applied cross-sectional study provides a snapshot at a given moment in time. Furthermore, it used only one type of methodological approach (i.e. quantitative) rather than using mixed methods to reach more accurate data.
Originality/value
This study developed a theoretical model that is obtained from reliable BCDA capabilities, CA, DDCS, green innovation and GPrI. Thus, this piece of work bridges the existing research gap in the literature by testing the moderated-mediation model with a focus on the manufacturing sector that benefits from big data analytics capabilities to improve levels of GPI and competitive advantage. Finally, this study is considered a road map and gaudiness for the importance of applying these factors, which offers new valuable information and findings for managers, practitioners and decision-makers in the manufacturing sector in the NA region.
Gelişen teknolojik koşullar sayesinde, değişen tüketim olgusu bireylerin satın alma davranışlarında da bazı değişikliklere sebebiyet vermektedir. Bireylerin yani tüketicilerin temel ihtiyaçlarının yanı sıra sadece ilgi duyarak ve yenilikçiliği gözeterek tüketimde bulunduğu bir devirde olmamızdan ötürü satın alma davranışları boyut atlayarak işletmelerin teknolojik inovasyon uyumunun, tüketiciler tarafından algılanmasına ve tüketicilerin yenilikçi, teknolojik mal ve hizmetlere yönelmelerine sebebiyet vermiştir.
Bu çalışmada tüketicilerin ilgilenim düzeylerinin ve yenilikçiliğe olan eğilimlerinin teknolojik inovasyon uyumu üzerindeki etkisinde tüketici yenilikçiliğinin aracılık rolünü belirlemek amaçlanmıştır. Bu amaç doğrultusunda Konya İli merkez ilçelerinden kolayda örnekleme yöntemiyle seçilen 500 kişiden anket uygulaması ile veriler toplanmıştır. Yapılan analizler sonucunda değişkenlerin birbirini pozitif yönde etkilediği ve ilgilenimin teknolojik inovasyon uyumu üzerindeki etkisinde tüketici yenilikçiliğinin aracılık rolü olduğu tespit edilmiştir.
Anahtar Kelimeler: Teknolojik İnovasyon Uyumu, İlgilenim, Tüketici Yenilikçiliği
We study the evolution of firms’ exploration–exploitation allocations and their long-term performance outcomes. Extending current ambidexterity theory, we suggest that not only firms pursuing one-sided exploration or exploitation orientations show self-reinforcing tendencies but also ambidextrous firms adopting balanced exploration–exploitation orientations. Integrating formal modeling arguments, we further propose that reinforcing ambidexterity can be good or bad for firms’ long-term performance, depending on the environment they face: In contexts characterized by incremental change, firms benefit more from the learning effects of maintaining ambidexterity, which lead to superior performance. Firms in discontinuous change contexts, however, suffer more from the misalignment that reinforcement creates, which affects their performance negatively. A longitudinal data set of global insurance firms (1999–2014) supports our arguments. Building on these findings, we reconceptualize ambidexterity as the ability to dynamically balance exploration and exploitation, which emerges from combining capability-building processes (to balance exploration and exploitation) with capability-shifting processes (to adapt the exploration–exploitation balance). We contribute to the organizational literature by developing a dynamic perspective on balancing exploration and exploitation, by clarifying the contingent nature of the ambidexterity–firm performance relationship, and by integrating and extending the ambidexterity and formal modeling perspectives on exploration and exploitation.
The e-companion is available at https://doi.org/10.1287/orsc.2017.1189 .
Managerial attention to exploitation and exploration has a strong influence on organizational performance. However, there is hardly any knowledge about whether senior managers need to adjust their distribution of attention to exploitation and exploration in response to major changes in demand patterns in their industry. Drawing on the analysis of a panel data set of 86 firms in the information technology industry exposed to an economic recession and recovery, we find that successfully navigating an economic downturn demands more managerial attention to exploration, while leveraging the subsequent upswing requires more attention to exploitation. As such, this study contributes to the literature by providing a dynamic perspective on ambidexterity: that is, senior managers need to redistribute their attention to exploration and exploitation, to effectively meet the changing environmental demands over time.
This study examines the intervening role of organizational ambidexterity in the relationship between pro-innovation culture and new product development (NPD) performance. The results indicate that organizational ambidexterity positively mediates the relationship between pro-innovation culture and NPD performance. The results show that when both exploration and exploitation are increased simultaneously, after an initial decline, NPD performance shows a rising trend. NPD performance tends to decline generally when there is an imbalance between the two though the plateau is at a point where exploitation is slightly higher than exploration. Additionally, pro-innovation culture can increase the gap between exploration and exploitation for exploration-oriented firms, which can lower their NPD performance. Overall, this study contributes to a deeper understanding of the underlying mechanisms that explain why firms with pro-innovation culture have higher NPD performance. Further, it enhances our understanding of the role of pro-innovation culture as an organizational context for building organizational ambidexterity, and provides new insights that can help reconcile the combined and balanced views of ambidexterity in enhancing NPD performance.
Purpose
– The purpose of this paper is to explain the relationship between strategic technological and non-technological innovation ambidexterity and the internationalization performance of HbSMEs.
Design/methodology/approach
– The theory of dynamic capability is highlighted as the main approach to enhance the internationalization performance of HbSMEs. It spells on the importance of continuous improvement, which can be realized by renewing and reconfiguring businesses competencies in response to the changing nature of business environment. The respondents composed of 310 HbSMEs that involve actively in international business activity. The data are analyzed using partial least squares.
Findings
– The results indicate that only strategic non-technological innovation ambidexterity plays critical role in determining the internationalization performance of HbSMEs, while strategic technological innovation ambidexterity creates non-significant impact.
Originality/value
– As resource-constrained enterprises, innovation activity imposed undue burden to small and medium enterprises. However, since people are started to shift their preferences on herbal-based products, strategic innovation ambidexterity is critical for HbSMEs to respond to the global herbal market. This research may provide information in which area of innovation should be emphasized by HbSMEs. Here, strategic non-technological innovation ambidexterity has been observed to create positive and significant impact on the internationalization performance of HbSMEs. Therefore, exploiting the existing marketing capability and concurrently exploring new marketing capability are critical for HbSMEs so that businesses could improve its performance in the turbulent nature of international business environment.
The organizational ambidexterity literature conceptualizes exploration and
exploitation as conflicting activities, and proposes separation-oriented approaches to
accomplish ambidexterity; namely, structural and temporal separation. We argue that
viewing ambidexterity from the lens of paradox theory enables us to move beyond
separation-oriented prescriptions towards synthesis or transcendence of paradoxical
poles; as well as towards longitudinal explorations of how paradoxical poles
dynamically interrelate over time. In this way, the conceptual repertoire of
ambidexterity theory is enriched and empirical research can more closely and
pragmatically track practice.
How can a company become sustainably innovative? We propose that the company needs to have organizational forms that achieve a dynamic synthesis of knowledge exploration and exploitation. In this paper, we present the “dynamic fractal organization” as a new organizational model. This model departs from the conventional information processing paradigm. Instead, we present a new frontier in organizational theory: the “dynamic fractal organization based on dynamic ‘ba’.” Dynamic fractal organizations build and utilize a triad relationship of knowledge that integrates and synthesizes tacit and explicit knowledge and creates a third type of knowledge, phronesis. The triad relationship is an upward spiraling process of converting tacit and explicit knowledge, and propels sustainable knowledge transformation across the diverse boundaries within and between organizations, and their environments.
Research has frequently argued that firms need to pursue exploratory and exploitative innovation strategies to be viable in an environment of technological change and intensified competition. However, it remains unclear whether exploratory and exploitative innovations are equally successful in different institutional environments. This meta-analysis synthesizes previous empirical findings to reveal under which institutional conditions firms benefit most from exploratory or exploitative innovation. We distinguish between institutional conditions that affect the success derived from exploratory and exploitative innovations through (a) the availability of resources and (b) attitudes toward innovation and the willingness of stakeholders to allocate resources to both innovation types. Our results show that national culture has a strong impact on the success of exploratory innovations, whereas only uncertainty avoidance influences the benefits derived from exploitative innovations. Socioeconomic conditions are equally important for the success of both innovation types. Our findings are of high practical relevance as due to increasing globalization more and more firms operate internationally and managers have choices regarding the location of their exploratory and exploitative innovation activities.
The effects of mergers and acquisitions (M&A) and alliances on the innovative performance of companies involved are discussed. Apart from the use of strategic technology alliances as a means to externally acquire innovative capabilities, full integration of innovative capabilities through mergers and acquisitions remains another option. M&A may stimulate innovation as it may raise the overall R&D budgets of companies involved. Alliances may also have a negative effect on innovation because knowledge transfer across organizations is difficult.
Exploration and exploitation have emerged as the twin concepts underpinning organizational adaptation research, yet some central issues related to them remain ambiguous. We address four related questions here: What do exploration and exploitation mean? Are they two ends of a continuum or orthogonal to each other? How should organizations achieve balance between exploration and exploitation-via ambidexterity or punctuated equilibrium? Finally, must all organizations strive for a balance, or is specialization in exploitation or exploration sometimes sufficient for long-run success? We summarize the contributions of the work in this special research forum and highlight important directions for future research.
In this article, we provide guidance for substantive researchers on the use of structural equation modeling in practice for theory testing and development. We present a comprehensive, two-step modeling approach that employs a series of nested models and sequential chi-square difference tests. We discuss the comparative advantages of this approach over a one-step approach. Considerations in specification, assessment of fit, and respecification of measurement models using confirmatory factor analysis are reviewed. As background to the two-step approach, the distinction between exploratory and confirmatory analysis, the distinction between complementary approaches for theory testing versus predictive application, and some developments in estimation methods also are discussed.
We examine acquisitions by multiunit chain organizations to determine why they acquire a particular target rather than others that are available to them and thus better understand chain growth. We advance experiential and vicarious learning processes as an explanation for chains' next spatial move. Our analysis of Ontario nursing home chains' acquisition location choices from 1971 to 1996 provides broad support for a learning perspective, demonstrating how experiential and vicarious processes shape and constrain the locations of chains' acquisitions. Experiential processes lead chains to replicate themselves by acquiring components geographically and organizationally similar to their own most recent and most similar prior acquisitions and their own current components. Vicarious processes lead chains to imitate location choices of other visible and comparable chains' most recent acquisitions, prior acquisitions nearest to potential targets, and their current components. Our study thus establishes organizational learning as a conceptual foundation for predicting the location of a chain's next acquisition and, more generally, the spatial expansion of chains over time.
Because a firm's optimal knowledge search behavior is determined by unique firm and industry conditions, organizational performance should be contingent on the degree to which a firm's actual level of knowledge search deviates from the optimal level. It is thus hypothesized that deviation from the optimal search, in the form of either overexploitation or overexploration, is detrimental to organizational performance. Furthermore, the negative effect of search deviation on organizational performance varies with environmental dynamism; that is, overexploitation is expected to become more harmful, whereas overexploration becomes less so with an increase in environmental dynamism. The empirical analyses yield results consistent with these arguments. Implications for research and practice are correspondingly discussed.
Sustained organizational performance depends on top management teams effectively exploring and exploiting. These strategic agendas are, however, associated with contradictory organizational architectures. Using the literature on paradox, contradictions, and conflict, we develop a model of managing strategic contradictions that is associated with paradoxical cognition-senior leaders and/or their teams (a) articulating a paradoxical frame, (b) differentiating between the strategy and architecture for the existing product and those for innovation, and (c) integrating between those strategies and architectures. We further argue that the locus of paradox in top management teams resides either with the senior leader or with the entire team. We identify a set of top management team conditions that facilitates a team's ability to engage in paradoxical cognitive processes.
Organizational ambidexterity, defined as an organization's ability to be aligned and efficient in its management of today's business demands while simultaneously being adaptive to changes in the environment, has gained increasing interest in recent years. In this article, the authors review various literature streams to develop a comprehensive model that covers research into the antecedents, moderators, and outcomes of organizational ambidexterity. They indicate gaps within and across different research domains and point to important avenues for future research.
The authors employ the dynamic capabilities perspective to gain a greater understanding of the conversion of firm resources into exploitation and exploration capabilities and the influence of these firm capabilities on firm outcomes. Specifically, they theorize that marketing and technological resources provide a foundation for the establishment of exploitation and exploration capabilities, respectively, and that these dynamic capabilities influence the degree of product innovation and market performance. The theorized relationships, which the authors examine using a survey of 111 U.S. importers, indicate that marketing resources influence an importer's development of exploitation capabilities, whereas technological resources influence the development of exploration capabilities. Furthermore, the authors find that exploitation capabilities provide a foundation for the development of exploration capabilities. They also find that whereas exploitation capabilities are negatively related to the degree of product innovation, exploration capabilities positively influence both the degree of product innovation and market performance. The authors provide implications for international marketing academics and practitioners.
I consider the implications for research and practice in strategic human resource management (SHRM) of a complex, living-systems extension of the resource-based view (RBV). I do so by demonstrating that concepts from complexity align well with the RBV, and I extend the RBV by considering critical but difficult aspects commonly identified in the RBV strategy literature. An integrated framework for SHRM is pre- sented, allowing an application of complexity principles at the appropriate level of abstraction in the HR system.
While a firm’s ability to jointly pursue both an exploitative and exploratory orientation has been posited as having positive performance effects, little is currently known about the antecedents and consequences of such ambidexterity in small-to medium-sized firms (SMEs). To that end, this study focuses on the pivotal role of top management team (TMT) behavioral integration in facilitating the processing of disparate demands essential to attaining ambidexterity in SMEs. Then, to address the bottom-line importance of an ambidextrous orientation, the study hypothesizes its association with relative firm performance. Multisource survey data, including CEOs and TMT members from 139 SMEs, provide support for both hypotheses.
Organizational learning has many virtues, virtues which recent writings in strategic management have highlighted. Learning processes, however, are subject to some important limitations. As is well-known, learning has to cope with confusing experience and the complicated problem of balancing the competing goals of developing new knowledge (i.e., exploring) and exploiting current competencies in the face of dynamic tendencies to emphasize one or the other. We examine the ways organizations approach these problems through simplification and specialization and how those approaches contribute to three forms of learning myopia, the tendency to overlook distant times, distant places, and failures, and we identify some ways in which organizations sustain exploration in the face of a tendency to overinvest in exploitation. We conclude that the imperfections of learning are not so great as to require abandoning attempts to improve the learning capabilities of organizations, but that those imperfections suggest a certain conservatism in expectations.
Organisational innovativeness is a broad concept involved in a firm’s proclivity to innovate. As such, widely varying conceptualisations and operationalisations of this construct appear to be the main cause of major deficiencies in the research of organisational innovativeness determinants. This article suggests a shift in emphasis from organisational to product innovativeness. After defining this concept, it selectively addresses how the investigation of product innovativeness as a dependent variable could contribute to further research and theory development. The benefits of such an investigation are far from restricted to the recommendations made herein. However, such recommendations are meant to intrigue scholars into conducting similar investigations on product innovativeness, a rather overlooked aspect of organisational innovativeness.
Why are some firms more successful at introducing radical product innovations than others? Following Schumpeter (1942), many researchers have suggested that firm size is the key organizational predictor of radical product innovation. The authors provide an alternate view and argue that one key variable that differentiates firms with strong radical product innovation records from others is the firms’ willingness to cannibalize their own investments. The authors identify three organizational factors that drive a firm's willingness to cannibalize. Results from a survey of three high-tech industries tend to support the alternate view that willingness to cannibalize is a more powerful driver of radical product innovation than firm size is. These results suggest a need to reconsider conventional wisdom on firm size, cannibalization, and organizational synergy.
Arguing that organizational memory affects key new product development processes by influencing the (1) interpretation of incoming information and (2) the performance of new product action routines, the authors introduce four dimensions of organizational memory, including the amount and dispersion of memory. Data from 92 new product development projects indicate that higher organizational memory levels enhance the short-term financial performance of new products, whereas greater memory dispersion increases both the performance and creativity of new products. They also find, however, that under some conditions of high environmental turbulence, high memory dispersion actually detracts from creativity and has no effect on financial performance. Under conditions of low turbulence, high memory dispersion promotes higher levels of creativity and short-term financial performance. These findings provide some initial evidence that knowledge is not an unconditionally positive asset and suggest that developing and sustaining valuable organizational memory may require attention not only to the appropriate levels of memory but also to managing subtle aspects of memory dispersion and deployment. These results imply that if organizations fail to understand the subtle ways in which different features of organizational memory influence product development, they may fail to harvest the full value of organizational learning.
Advances in causal modeling techniques have made it possible for researchers to simultaneously examine theory and measures. However, researchers must use these new techniques appropriately. In addition to dealing with the methodological concerns associated with more traditional methods of analysis, researchers using causal modeling approaches must understand their underlying assumptions and limitations.
This study examines how product innovation contributes to the growth and renewal of the firm through its dynamic and reciprocal relation with the firm's competences. Field research in five high-tech firms of varying age, size, and level of diversification is combined with analysis of existing theory to develop the findings of the study. Based on the notion that new products are created by linking competences relating to technologies and customers, a typology is derived that classifies new product projects based on whether a new product can draw on existing competences, or whether it requires competences the firm does not yet have. Following organizational learning theory, these options are conceptualized as exploitation and exploration. These organizational learning concepts are used to gain a dynamic and path dependent view of product innovation and firm development, and to reveal the unique nature and challenges of different types of product innovation.
We develop a contingency view of process management's influence on both technological innovation and organizational adaptation. We argue that while process management activities are beneficial for organizations in stable contexts, they are fundamentally inconsistent with all but incremental innovation and change. But dynamic capabilities are rooted in both exploitative and exploratory activities. We argue that process management activities must be buffered from exploratory activities and that ambidextrous organizational forms provide the complex contexts for these inconsistent activities to coexist.
Building on a unique, multi-source, and multi-method study of R&D projects in a leading professional service firm, we develop the argument that organizations are more likely to fund projects with intermediate levels of novelty. That is, some project novelty increases the share of requested funds received, but too much novelty is difficult to appreciate and is selected against. While prior research has considered the characteristics of the individuals generating project ideas, we shift the focus to panel selectors and explore how they shape the evaluation of novelty. We theorize that a high panel workload reduces panel preference for novelty in selection, whereas a diversity of panel expertise and a shared location between panel and applicant increase preference for novelty. We explore the implications of these findings for theories of innovation search, organizational selection, and managerial practice.
This paper examines the nature of the core capabilities of a firm, focusing in particular on their interaction with new product and process development projects. Two new concepts about core capabilities are explored here. First, while core capabilities are traditionally treated as clusters of distinct technical systems, skills, and managerial systems, these dimensions of capabilities are deeply rooted in values, which constitute an often overlooked but critical fourth dimension. Second, traditional core capabilities have a down side that inhibits innovation, here called core rigidities. Managers of new product and process development projects thus face a paradox: how to take advantage of core capabilities without being hampered by their dysfunctional flip side. Such projects play an important role in emerging strategies by highlighting the need for change and leading the way. Twenty case studies of new product and process development projects in five firms provide illustrative data.
Understanding sources of sustained competitive advantage has become a major area of research in strategic management. Building on the assumptions that strategic resources are heterogeneously distributed across firms and that these differences are stable over time, this article examines the link between firm resources and sustained competitive advantage. Four empirical indicators of the potential of firm resources to generate sustained competitive advantage-value, rareness, imitability, and substitutability are discussed. The model is applied by analyzing the potential of several firm resources for generating sustained competitive advantages. The article concludes by examining implications of this firm resource model of sustained competitive advantage for other business disciplines.
Why might firms be regarded as astutely managed at one point, yet subsequently lose their positions of industry leadership when faced with technological change? We present a model, grounded in a study of the world disk drive industry, that charts the process through which the demands of a firm's customers shape the allocation of resources in technological innovation - a model that links theories of resource dependence and resource allocation. We show that established firms led the industry in developing technologies of every sort-even radical ones - whenever the technologies addressed existing customers' needs. The same firms failed to develop simpler technologies that initially were only useful in emerging markets, because impetus coalesces behind, and resources are allocated to, programs targeting powerful customers. Projects targeted at technologies for which no customers yet exist languish for lack of impetus and resources. Because the rate of technical progress can exceed the performance demanded in a market, technologies which initially can only be used in emerging markets later can invade mainstream ones, carrying entrant firms to victory over established companies.
Boards of directors are in a position to contribute vital knowledge resources to strategy-making.
We propose that the relation between board functional background heterogeneity and
exploration-focused versus exploitation-focused strategy is contingent on the extent to which
the institutionally adopted board model enables or constrains inclusion of the board’s knowledge
resources in strategy-making. We empirically juxtapose the Anglo-Saxon (‘one-tier’) and
Rhineland (‘two-tier’) board models in the U.K. and Germany, respectively, and find support
for our assertion that the influence of board functional background heterogeneity on relative
exploration orientation is more pronounced when the adopted board model accommodates
inclusion of the board’s knowledge resources into strategy-making. Implications for theory and
practice are discussed.
Organizational ambidexterity has emerged as a valuable contemporary lens on organizational design and action, examining the dynamic relationships between exploitative (extant) and explorative (evolving) resources within organizational contexts and environments. This article analyzes the literature pertaining to ambidexterity and underlines a number of recurrent preoccupations including definition of the nature, characteristics, and normative boundaries of organizational ambidexterity; a predilection toward considering interfirm/unit comparisons of large-scale corporate organizations; and a concentration on the significance of the managerialistic role of the senior management team's disposition and action-orientations. While a few calls have been made for a focus on the micro-aspects, predominant attention has remained on the macro-aspects of organizational ambidexterity.
Organizations evolve through periods of incremental or evolutionary change punctuated by discontinuous or revolutionary change. The challenge for managers is to adapt the culture and strategy of their organizations to its current environment, but to do so in a way that does not undermine its ability to adjust to radical changes in that environment. They must, in other words, create an ambidextrous organization—one capable of simultaneously pursuing both incremental and discontinuous innovation.
Emerging economies are low-income, rapid-growth countries using economic liberalization as their primary engine of growth. They fall into two groups: developing countries in Asia, Latin America, Africa, and the Middle East and transition economies in the former Soviet Union and China. Private and public enterprises have had to develop unique strategies to cope with the broad scope and rapidity of economic and political change in emerging economies, This Special Research Forum on Emerging Economies examines strategy formulation and implementation by private and public enterprises in several different regional settings and from three primary theoretical. perspectives: institutional theory, transaction cost economics, and the resource-based view of the firm. In this introduction, we show how different theoretical perspectives can provide useful insights into enterprise strategies in emerging economies. We discuss the special methodological as well as empirical challenges associated with doing research in emerging economies. Finally, we briefly summarize the individual contributions of the works included in our special research forum.
The authors examine the differential effects of the structural, relational, and cognitive dimensions of social capital on exploratory and exploitative learning in new product development in new ventures in China. In addition to investigating the potential nonlinear relationships between exploratory and exploitative learning and new product performance, the authors examine the relationship between the interaction of the two types of learning and new product performance. The findings suggest that different dimensions of social capital are indeed significantly related to the level of exploratory and exploitative learning. The results also support the argument that firms need a balance of exploratory and exploitative learning to enhance performance. The findings draw the attention of managers from multinational firms operating in China to the important role of social capital in enhancing new product performance.
How do business organizations make decisions? What process do they follow in deciding how much to produce? And at what price? A behavioral theory of the firm is here explored. Using a specific type of duopoly, a model is written explicity as a computer program to deal with the complex theory implicit in the process by which businesses make decisions. This model highlights our need for more empirical observations of organizational decision-making.
Some researchers have proposed that practices facilitating learning and knowledge transfer are particularly important to innovation. Some of the practices that researchers have studied include how organizations collaborate with other organizations, how organizations promote learning, and how an organization's culture facilitates knowledge transfer and learning. And while some have proposed the importance of combining practices, there has been a distinct lack of empirical studies that have explored how these practices work together to facilitate learning and knowledge transfer that leads to the simultaneous achievement of incremental and radical innovation, what we refer to as innovation ambidexterity ( IA ). Yet, a firm's ability to combine these practices into a learning capability is an important means of enabling them to foster innovation ambidexterity.
In this study, learning capability is defined as the combination of practices that promote intraorganizational learning among employees, partnerships with other organizations that enable the spread of learning, and an open culture within the organization that promotes and maintains sharing of knowledge. This paper examines the impact of this learning capability on innovation ambidexterity and innovation ambidexterity's effect on business performance. The resource‐based view ( RBV ) of the firm is used to develop a conceptual foundation for combining these practices. This study empirically examines whether these practices constitute a learning capability by analyzing primary data gathered from 214 T aiwanese owned strategic business unit ( SBUs ) drawn from several industries where innovation is important.
The results of this study make four important contributions. First, they demonstrate that the combination of these practices has a greater impact on innovation ambidexterity than any one practice individually or when only two practices are combined. Second, the results demonstrate a relationship between innovation ambidexterity and business performance in the form of revenues, profits, and productivity growth relative to competitors. Third, the results suggest that innovation ambidexterity plays a mediating role between learning capability and business performance. That is, learning capability has an indirect impact on business performance by facilitating innovation ambidexterity that in turn fosters business performance. This study also contributes to our understanding of ambidexterity literature in a non‐ W estern context, i.e., T aiwan.
Managers face an important strategic dilemma in product innovation: how to exploit existing product innovation competencies (competence exploitation) while avoiding their dysfunctional rigidity effects by renewing and replacing them with entirely new competencies (competence exploration). Although the resolution of what is termed the "capability-rigidity paradox" is considered a fundamental managerial task in enhancing product innovation out-comes and the firm's competitive advantage, it has received little research attention. The author argues and finds support that market orientation provides a key to this paradox. Specifically, customer and competitor orientations ensure simultaneous investments in exploiting existing product innovation competencies and exploring new ones. The author also finds that the effects of these orientations on competence exploitation and exploration are differentially moderated by interfunctional coordination and perceived market opportunity. Regarding outcomes, competence exploitation and exploration have opposing relationships with incremental and radical innovation performance. However, the relationship between competence exploration and radical innovation performance is positively moderated by interfunctional coordination. Overall, the results of this study suggest that market orientation can prevent a firm from becoming operationally efficient but strategically inefficient by simultaneously engendering competence exploitation and exploration, which are differentially related to incremental and radical product innovation outcomes.
This article examines a fundamental characteristic of modern organizations: the dynamics of exploitation and exploration in intra- and interorganizational learning processes. Exploitation is about creating reliability in experience, and thrives on productivity and refinement. Exploration is concerned with creating variety in experience, and thrives on experimentation and free association. The findings of a case study on product development within a leading Scandinavian software producer and its interorganizational collaborations with business partners suggest how experiential learning processes of exploitation and exploration within the organizations concerned generate interorganizational exploitation and exploration. Conversely, the data suggest how exploitation and exploration between the organizations generate intraorganizational exploitation and exploration. A conceptual framework describing the nature of such learning dynamics is proposed. This framework emphasizes that experiential learning is a driving force behind much intra- and interorganizational change in the form of transformations between exploitation and exploration.
Jim March's framework of exploration and exploitation has drawn substantial interest from scholars studying phenomena such as organizational learning, knowledge management, innovation, organizational design, and strategic alliances. This framework has become an essential lens for interpreting various behaviors and outcomes within and across organizations. Despite its straightforwardness, this framework has generated debates concerning the definition of exploration and exploitation, and their measurement, antecedents, and consequences. We critically review the growing literature on exploration and exploitation, discuss various perspectives, raise conceptual and empirical concerns, underscore challenges for further development of this literature, and provide directions for future research.
This article argues that research on diffusion of innovation should shift from individuals to organizational structure and environmental factors. The results of two research projects on organizational change are presented. The analysis indicates three findings. (1) Individual characteristics, such as sex, age, and personal attitudes, do not seem to be important determinants of innovative behavior among people in complex organizations. However, administrative positions and roles do seem to have an impact on the involvement of an individual in the innovation process. (2) Structural characteristics of the organization, such as size and complexity, strongly affect the organization's innovative behavior. (3) Environmental input from the community and other organizations is a major determinant of an organization's innovation behavior.
This study endeavors to extend research on organizational learning by investigating the complicated effects between exploratory — exploitative learning and new product performance in a single new product project. Specifically, premised on contingency theory the authors investigate the negative nonlinear and interaction effects of project-level exploratory and exploitative learning behaviors on product development performance, and examine internal organizational and external environmental factors to recognize their differential moderating effects between the two learning behaviors and new product performance. Most of the hypotheses are supported based on questionnaire survey results of 253 new product projects. The results indicate that the two type of learning have curvilinear (inverted U-shaped) effects on new product performance, and suggest that product development performance will be enhanced when one learning is at higher level and the other is at lower level. Furthermore, the authors discover that process-based reward, encouragement to take risk, and environment dynamics strengthened the benefits of exploratory on new product performance. On the other hand, the advantages of exploitative learning on new product performance is further enhanced when output-based reward, project development formalization, and environment competitiveness is high. Finally, this study suggests that project managers should pay careful attention to employ the two learning behaviors during new product development.
Purpose
This study aims to extend the proposal of Holmqvist with regard to organisational processes of learning and their impact on firm performance.
Design/methodology/approach
Based on a survey of 187 firms, the paper shows that certain organisational processes of learning are related to innovation performance. Further, it investigates the moderating role of product radicalness on such relationships.
Findings
Based on a survey of 187 firms, the paper shows that certain organisational processes of learning are related to innovation performance. Further, it investigates the moderating role of product radicalness on such relationships and proves that the other two types of organisational learning processes are not related to innovation performance.
Originality/value
The innovation performance of collaboration between firms has not received a great deal of attention in the literature. This research paper offers some guidelines on how to obtain great advantages from this collaboration.