Managing ambidextrous organizations for corporate transformation: a case study of Fujifilm

The concept of ambidextrous organizations, allowing exploration and exploitation activities to coexist within an organization, has attracted considerable interest. We aim to advance the framework of ambidextrous organizations by incorporating the concept of product substitutability. We initially focus on the substitutability of an exploratory product for an existing core product, propose cannibalistic and complementary types of ambidextrous organizations, and discuss their effective management. This is followed by an in‐depth case study of Fujifilm, illustrating how distinguishing between two types of an ambidextrous organization explains effectively the corporate transformation process of Fujifilm.     

The Locus of Innovation: The Effect of a Separate Innovation Unit on Exploration,Exploitation, and Ambidexterity in Manufacturing and Service Firms

This paper investigates the effects of having a separate innovation unit on exploration, exploitation, and ambidexterity in manufacturing and service firms according to traditional paradigms of the innovation management discipline that innovation units should be organized in a separate department. Many manufacturing firms have such a unit while few service firms do. This paper sets out to investigate the advantages of having such a unit for exploration, exploitation, and ambidexterity, and whether there are differences between manufacturing and service firms that could help explain why such units are present or absent. The literature suggests that a separate innovation unit has a positive effect on exploration and ambidexterity in manufacturing firms. However, the effect on improving operational activities, that is, exploitation, is unclear. If exploration and exploitation are two ends of a continuum, as the literature suggests, more exploration comes at the cost of exploitation. On the other hand, others have suggested the possibility of an orthogonal relationship, where a separate unit can simultaneously enhance exploration and exploitation. In this paper, the Dutch Community Innovation Survey (CIS) is used to investigate these relationships for manufacturing and service firms, with a question added to the survey regarding the locus of innovation within each firm, that is, mostly within a dedicated innovation unit or dispersed throughout the firm. Our findings show that a separate innovation unit increases exploration, exploitation, and ambidexterity in both manufacturing and service firms. It thereby provides support for the orthogonal view of ambidexterity. A separate unit enhances the ability to exploit and be ambidextrous equally in service and manufacturing firms, but has a weaker positive effect on exploration, and exploratory and ambidextrous performance in service firms. This finding implies that both manufacturing and service firms benefit from having a separate innovation unit, with the advantages being greatest for manufacturing firms. In service firms, such an innovation unit alone may not be sufficient, as such units are expensive to maintain, while they contribute less to ambidextrous performance than in manufacturing firms. Based on the latter finding, future studies should make a distinction between the ability to be ambidextrous in creating exploratory and exploitative innovations, and ambidextrous performance, the ability to gain financially from engaging in both types of activities simultaneously.     

Ambidextrous marketing capabilities and performance: How and when entrepreneurial orientation makes a difference

There are two marketing capabilities situated at the product-market interface: customer management (CM) and new product development (NPD). Both are ambidextrous given they involve exploitation and exploration, yet important questions remain unanswered. Is it beneficial to have higher combined levels of exploitation and exploration? Or should these be balanced? What internal and external factors might influence these two forms of ambidexterity? This study examines these issues using data from a sample of U.S. manufacturers. We find that entrepreneurial orientation (EO) differentially affects the exploration-exploitation balance within CM and NPD, in dynamic environments. Performance improves when there is higher combined ambidexterity in both CM and NPD; it suffers when NPD ambidexterity is imbalanced by an emphasis towards exploration. CM can be similarly imbalanced yet has no adverse impact. A moderated mediation analysis reveals that EO has both positive and negative associations with performance under different environmental conditions.     

Cannibalize and combine? The impact of ambidextrous innovation on organizational outcomes under market competition

How can a firm achieve ambidexterity? The present study proposes that the answer to this question lies in the distinction between ambidextrous culture and ambidextrous innovation. Drawing upon organizational learning theory and the source-position-performance framework, we propose that ambidexterity requires the adoption of two important organizational cultures, willingness to cannibalize (WTCA) and willingness to combine existing knowledge (WTCO), which allow firms to attain superior performance through the implementation of both radical and incremental (i.e., ambidextrous) innovations. Our major contribution lies in addressing the important debate in the literature on whether exploration and exploitation are complements or substitutes. Furthermore, competition intensity is a key condition that determines the degree to which the two types of organizational cultures and the two types of innovations are necessary for superior firm performance. The study uses data from multiple respondents from 199 Chinese firms. Our findings thus suggest that WTCA and WTCO, which are traditionally treated as opposites, are complements in generating radical innovations.     

The architecture of coopetition: Strategic intent,ambidextrous managers,and knowledge sharing

The study investigates the significance of strategic intent, manager's ambidexterity, and knowledge sharing routines for firms in their quest to pursue coopetition. We utilize the resource-based view and the dynamic capabilities theory to ground our hypotheses. We test the hypotheses using the data collected from 313 firms that engage in coopetition relationships through an online survey. The findings forward knowledge sharing and ambidextrous managers as intervening variables, in that when complemented with knowledge sharing, a firm's strategic intent could better guide the firm's managers to pursue coopetition successfully. Findings further advocate that knowledge sharing complements to enable the relationship between a firm's strategic intent and its ambidextrous managers, as well as the relationship between strategic intent and coopetition. Furthermore, results also indicate that ambidextrous managers, with a skillset of a combination of exploration and exploitation, are positively associated to coopetition. Overall, the findings make important theoretical as well as empirical contributions to the coopetition and strategic alliance literature.     

Achieving new product success via the synchronization of exploration and exploitation across multiple levels and functional areas

While ambidexterity has been identified as a critical prerequisite for new product success, synchronizing exploration and exploitation in practice represents a multifaceted enigma. Ambidexterity is not in reality limited to a single organizational level, or a specific functional area. Firms become ambidextrous when corporate-level exploratory and exploitative strategies interact with operational-level exploratory and exploitative capabilities across multiple functional areas. Data from a sample of technology-intensive industrial firms using a multi-informant design shows that operational-level exploratory and exploitative product innovation and marketing capabilities allow firms to implement corporate-level exploratory and exploitative strategies in the context of new product development (NPD). Further, the findings reveal that the integration of exploratory product innovation–exploratory marketing and exploitative product innovation–exploitative marketing is significant for the implementation of exploratory and exploitative strategies over deploying each capability in isolation. Finally, we show that the implementation of exploratory and exploitative strategies drives new product success through creating distinct positional advantages to customers in the form of both differentiation and cost efficiency. These positional advantages help to better explain the effects of exploratory and exploitative capabilities on new product market performance.     

Exploration and exploitation alliances in biotechnology: a system of new product development

We link the exploration–exploitation framework of organizational learning to a technology venture's strategic alliances and argue that the causal relationship between the venture's alliances and its new product development depends on the type of the alliance. In particular, we propose a product development path beginning with exploration alliances predicting products in development, which in turn predict exploitation alliances, and that concludes with exploitation alliances leading to products on the market. Moreover, we argue that this integrated product development path is moderated negatively by firm size. As a technology venture grows, it tends to withdraw from this product development path to discover, develop, and commercialize promising projects through vertical integration. We test our model on a sample of 325 biotechnology firms that entered 2565 alliances over a 25‐year period. We find broad support for the hypothesized product development system and the moderating effect of firm size. Copyright © 2004 John Wiley & Sons, Ltd.     

Ambidextrous balance and channel innovation ability in Chinese business circles: The mediating effect of knowledge inertia and guanxi inertia

Drawing on organizational learning theory and literature on guanxi, this study examines how and why ambidextrous learning balance influences firm innovation capability in Chinese business circles. We propose a U-shaped relation between ambidextrous learning balance and firm innovation capability which is mediated by guanxi inertia and knowledge inertia in different ways. Specifically, ambidextrous learning balance has an inverted U-shaped impact on guanxi inertia and further influences firm innovation capability. Whereas, ambidextrous learning balance has a linear positive influence on innovation capability through a decreased level of knowledge inertia. Based on survey data collected from, The results obtained from a sample of 197 Chinese channel enterprises using SEMs analysis provide strong support for our hypotheses. In addition, the findings based on firms with unbalanced ambidextrous learning indicate that as opposed to exploratory learning, higher level of exploitative learning leads to an increase in guanxi inertia and a decrease in knowledge inertia. These conclusions reveal how ambidextrous learning balance influence innovation capability for a firm with inherent learning preference which is not discussed by the extant research. At the same time, this study fills the gap of ambidextrous learning balance by considering the influence of culture. Our work also informs foreign practitioners of the optimal ways of learning for innovation in China.     

Repeating a familiar pattern in a new way: The effect of exploitation and exploration on knowledge leverage behaviors in technology acquisitions

Research Summary: We identify two types of knowledge leverage behaviors undertaken by acquiring firms: integrated and independent knowledge leverage. We address how the prior exploitation or exploration orientation of acquirers influence these two modes of knowledge leverage behaviors. The degree of exploitation of acquirers promotes integrating their existing knowledge with acquired knowledge in innovative actions. In contrast, the degree of exploration of acquirers increases the likelihood that new innovations will use acquired knowledge without integrating it with their prior knowledge. In addition, the firm's prior acquisition rate moderates the relationship between the acquiring firms’ previous exploitation or exploration orientation and their knowledge leverage mode. The findings of this article suggest that pre‐acquisition innovation capabilities are distinct from but influence the post‐acquisition innovation actions. Managerial Summary: Firms often undertake acquisitions to gain access to new knowledge, but they can differ dramatically in how they leverage acquired knowledge. We show that the firm's prior innovation patterns drive this choice. Firms that have previously focused on incremental innovations in their internal innovation efforts tend to integrate acquired knowledge with their own prior knowledge. In contrast, firms that have previously pursued bold innovations tend to leverage acquired knowledge alone in new innovations. Thus, we show that firms use acquisitions as a means to extend their internal innovation patterns—firms that have focused on incremental innovations extend that with acquisitions by linking new innovations to their prior knowledge while firms that have pursued bold initiatives use acquired knowledge to move in new technology directions.     

Managing technological transitions through R&D alliances

Technological and market transitions are difficult to manage, and collaborations can be viewed as either resources or constraints in dynamic settings. In the biopharmaceutical industry, a paradigmatic shift in the relevant knowledge bases occurred in the mid‐1990s, inducing a structural change in the network of R&D collaborations. Search and relational strategies oriented toward exploration versus exploitation have prevailed in different phases of the network evolution. Therefore, biotechnology firms have experienced overwhelming difficulties in reorienting their learning strategies throughout paradigmatic shifts and ambidextrous organizations have been able to attain superior performances in terms of stability and centralization in the R&D network.     

Organizational Learning Ambidexterity,Strategic Flexibility,and New Product Development

Although organizational ambidexterity has gained momentum in recent innovation research, previous literature still offers a confusing and partial picture about how to leverage ambidexterity for new product development because of two limitations. First, previous research mainly focuses on static resource endowment and thus offers little insight about how firms should dynamically reconfigure resource portfolios to leverage organizational ambidexterity. Second, conceptual confusion on the notion of the balance dimension of organization ambidexterity still exists. This study seeks to explore how firms should dynamically reconfigure resource portfolios to leverage organizational ambidexterity for new product development and to bring greater conceptual clarity to the notion of balance. By extending the static resource assumption, which is central to the extant debate in organizational ambidexterity literature, this research unpacks ambidexterity into a relative exploratory dimension and an interactive dimension. We further investigated the moderating effect of resource flexibility and coordination flexibility on the impacts of the two dimensions on new product development performance. Based on the dynamic resource management view and organizational learning theory, we proposed six hypotheses and collected data from 213 firms through a survey to examine the hypotheses. Our results indicate that relative exploratory dimension and interactive dimension have different effects on new product development. Specifically, the relative exploratory dimension has an inverse U‐shaped effect on new product development while the interactive dimension has a positive effect. Furthermore, we find that resource flexibility and coordination flexibility have positive moderating effects on the relationships between the two dimensions of ambidexterity and new product development performance. Our study contributes to the ambidexterity research in three ways. First, from a dynamic resource management view, this study extends previous ambidexterity research from a static view to a dynamic view by exploring the moderating effects of resource flexibility and coordination flexibility. Second, we extend the understanding on ambidexterity by bringing greater conceptual clarity to the notion of balance. Third, this research provides new evidence on the effects of ambidextrous learning on new product development performance in transition economy such as China, where ambidextrous learning is crucial for firms to adapt to a dynamic environment.     

Building and leveraging competence exploitation and exploration for firm new product success

We theorize that industry conditions of collaboration intensity and innovation intensity drive the development of competence exploitation and exploration in manufacturer-manufacturer collaborations, and that such competencies can be leveraged to increase firm-level new product sales and market share, contingent on the firm's establishment of non-proprietary knowledge transfer capability. We test our model using a survey of 224 manufacturer-manufacturer collaborations. Our findings indicate that collaboration intensity drives firms to build both competence exploration and exploitation while innovation intensity drives neither. We also find that while non-proprietary knowledge capability enhances the influence of competence exploration on a firm's new product sales and market share, it dampens the firm's ability to leverage competence exploitation for firm-level new product success.     

Why and How Combining Strong and Weak Ties within a Single Interorganizational R&D Collaboration Outperforms Other Collaboration Structures

The purpose of this paper is to demonstrate why and how an ambidextrous interorganizational R&D collaboration outperforms other collaboration structures in the creation of innovation. This research effort contributes to a growing stream of research in social network theory suggesting that the contradictory theories of the strength of weak ties and weak network structures on the one hand and the theory of strong ties and closed network structures on the other have a mutually reinforcing effect on innovation outcomes if combined rather than considered separately. An in‐depth exploratory single case study approach within an innovatively organized national R&D collaboration allowed giving further evidence for such a superior innovation performance and for this research to contribute to theory by demonstrating why and how such a combination may lead to higher innovation output and how this effect can be actively reinforced. It is suggested that the combination of strong and weak ties should occur at the individual rather than at the project or firm level. The authors distinguish between the additive effects of the respective innovation benefits of strong and weak ties, a positive interaction effect in the portfolio of dyadic ties of an individual and a second multilevel interaction effect of weak ties embedded in the ambidextrous network structure. Referring to previous empirical findings, intellectual property regulation and structural interdependency between network members showed a higher impact than trust with regard to leveraging weak ties and are important sources for achieving the multilevel interaction effect. Managerial implications of this research are that a large network will outperform several smaller, independent networks given that the right structure and processes are in place. Direct implications for the architecture of an ambidextrous R&D collaboration are discussed, and a framework for a new form of technology R&D collaboration called “semi‐open organization” is presented, which places itself between the extremes of traditional R&D in closed organizations and completely “open innovation” approaches.     

How exploitation impedes and impels exploration: Theory and evidence

Research summary : This study suggests that strategy and organizational scholars seeking to analyze the impact of exploitation on exploration would benefit by moving away from the generally assumed unitary perspective on exploitation. Specifically, we propose a multifaceted perspective on exploitation by theoretically and empirically distinguishing between repetitive exploitation versus incremental exploitation. We argue that repetitive exploitation can impede exploration and delay firms' responses to environmental changes, while incremental exploitation can impel exploration and accelerate firms' responses to environmental changes. We test our arguments using extensive longitudinal data from the hard disk drive (HDD) industry, and our supportive empirical findings highlight the relevance of our distinction between the two types of exploitation and their very different effects on exploration. Managerial summary : This study offers a solution to the puzzle of why many believe firms cannot excel at advancing existing practices and developing new initiatives, typically described as the trade‐off between exploitation and exploration. We introduce the distinction between repetitive and incremental exploitation and show that only the former type of innovation generates rigidity toward exploration, whereas the latter actually promotes exploration. More specifically, our evidence from the hard disk drive industry shows that those firms emphasizing incremental innovation (as opposed to repetition of their existing practices) were most likely to remain explorative over time, whereas firms emphasizing more repetitive innovation proved less open to changes. We discuss the implications of our findings as suggesting that firms seeking to optimize their innovativeness over the long term should strive to remain active in incrementally innovating their existing practices. Copyright © 2015 John Wiley & Sons, Ltd.     

Product competence exploitation and exploration strategies: The impact on new product performance through quality and innovativeness

The ability to manage existing assets and capabilities (exploitation) and the development of new capabilities (exploration) are arguably among the most relevant new product success factors. However, while exploitation-related capabilities are based on certainties regarding the efficiency of a company, exploration-related capabilities require the analysis of new technologies and processes. In existing literature, there is a gap concerning the trade-off between the exploitation and exploration of competences. Based on the theoretical background of Resource Based Theory, Dynamic Capabilities Theory and Discovery and Creation Theory, a model is proposed to analyze this gap. In this study, which examines 197 manufacturing organizations, we build on the dualities of the two types of competences and their impact on speed-to-market and market performance. The findings indicate that the choice between exploitation and exploration depends on the goals of new product development. While exploitation increases product objective quality, exploration enhances product innovativeness to the firm. Furthermore, we found that both exploitation and exploration constitute important success factors when it comes to launching new products. Finally, moderate effects of competitive intensity and market turbulence are also examined. High levels of market turbulence improve the results of exploitation, while low levels of competitiveness may encourage exploration.     

Unravelling the internal and external drivers of digital servitization: A dynamic capabilities and contingency perspective on firm strategy

Despite the increased interest in using digital technologies for servitization purposes, little is known about what drives firms towards a digital servitization strategy. Using a dynamic capabilities lens, we look into the relationships between two organizational mechanisms – exploitation and exploration – and firms' orientation towards digitization, servitization and digital servitization. On top, we examine the influence of two environmental contingencies – technological turbulence and competitive intensity – as potential influencers of these relationships. We collected and analyzed data of 139 Belgian firms through hierarchical regressions. Exploitation and exploration are positively associated with digital servitization, but exploration trumps the effect of exploitation when firms do both. Technological turbulence is positively associated with digitization regardless of the firm's level of exploration or exploitation, and competitive intensity only relates positively with servitization when firms emphasize exploration. Theoretically, we contribute to the literature by unravelling the relationship between firms' dynamic capabilities and their environment. In order to fully understand firms' strategic transition towards digital servitization, both should be considered. As managerial implications, we suggest that firms pay close attention to adapting their strategy to fit an increasingly changing environment.     

Making Up Is Hard to Do: Knowledge Acquisition Strategies and the Nature of New Product Innovation

Innovation creates significant challenges for firms in high‐technology industries. This article examines how the use of external knowledge acquired from mergers and acquisitions (M&As) and joint ventures (JVs) influence the nature of innovative competence in the global pharmaceutical industry. We create a unique database on never‐before approved products that measure the scientific merit of new, exploratory product innovations, ranging from radical to incremental. We then follow their market success by recording the number of new exploitative product innovations that stem from these product innovations and that are later approved and subsequently marketed. Using a large data set spanning a 15‐year period, we find that firms were able to “make up” for their lack of exploitation or exploration innovative capabilities through the use of M&As and JVs. These external knowledge acquisition strategies were found to overcome internal processes that otherwise could cause firms to overemphasize exploitation over exploration and vice versa. Our findings suggest that acquiring external knowledge via M&As is associated with diminished exploratory product innovation, while assimilating external knowledge sourced from JVs is associated with a reduction in new exploitative product innovation.     

A Study of the Performativity of the “Ambidextrous Organizations” Theory: Neither Lost in nor Lost before Translation

Ambidextrous organizations succeed both in incremental and discontinuous innovation. However, there is little direct empirical evidence on how managers implement the principles of the “ambidextrous organizations” theory to dynamically align the structure and culture of ambidextrous organizations. Our study does not focus on analyzing the factors that give rise to organizational ambidexterity but focuses on analyzing whether the factors suggested by prior theorizing on “ambidextrous organizations” are implemented by managers in their daily practice as suggested by prior theorizing. Accordingly, this study does not investigate the traditionally conceptualized gap between academic theorizing and managerial practice since “ambidextrous organizations” theory can be characterized as rigorous and relevant. We investigate whether the “ambidextrous organizations” theory is implemented as suggested by prior theorizing and whether successful implementation is subject to managing in the way that scholars' prior theorizing suggests. Based on qualitative and quantitative data from two longitudinal case studies, we find that managers overlooked the process dimension in evaluating the required degree of ambidexterity. Furthermore, the organizational structure and culture for incremental innovation did not differ from the structure and culture for discontinuous innovation alongside the expected dimensions. Finally, the discontinuous innovation business unit had to be reintegrated to ensure sustained growth. During the reintegration processes, organizational capabilities mutated. We linked our findings on the processes and performativity of ambidextrous organizing to extant theories and developed the rationale for the observed novel phenomena of innovation myopia, second‐order competency traps, and capability mutations.     

Ambidexterity and performance in multiunit contexts: Cross‐level moderating effects of structural and resource attributes

Research suggests that unit‐level ambidexterity positively impacts subsequent unit performance but theory and testing on this impact remain impoverished. We develop a cross‐level model suggesting that structural and resource attributes of the organizational context significantly shape the relationship between unit ambidexterity and performance. Using multisource and lagged data from 285 organizational units located within 88 autonomous branches, results from hierarchical linear modeling show that this relationship is boosted when the organization is decentralized, more resource munificent, or less resource interdependent. We also find that structural differentiation of the organization does not condition the unit ambidexterity‐performance relationship. Through this cross‐level theory and testing, we develop a richer explanation of the effectiveness of ambidextrous units operating in multiunit contexts. Copyright © 2012 John Wiley & Sons, Ltd.     

A Self‐Tuning Model for Smart Manufacturing SMEs: Effects on Digital Innovation

With the changing way people live, communicate, and work, enterprises are striving to shift their existing business model into a “self‐tuning” one. Enterprises are becoming more agile, adaptive, and ambidextrous in order to boost innovation in the current digital transformation era. Nowadays, “digital innovation” is closely associated with Industry 4.0 enablers and smart enterprises. Prior research has shown that while multinational enterprises—across many sectors—have already embraced the aforementioned advancements, their adoption by small and‐medium‐sized enterprises (SMEs) has so far taken place mainly in the manufacturing sector. Thus, based on a sample of 280 self‐tuned smart manufacturing SMEs and having utilized the structural equation modeling (SEM), this study was aimed to investigate how digital innovation is influenced by the three pillars of self‐tuning models—agility, adaptation, and ambidexterity. Our paper has focussed on the digital systems in which SMEs, spurred by networking and open innovation solutions, operate and innovate in response to external triggers, displaying a balance between exploration and exploitation, and a strong agile capacity.