Configurations of Innovations across Domains: An Organizational Ambidexterity View

How do firms balance explorative and exploitative innovation for superior firm performance? While most prior studies have approached this issue by focusing on technology‐related innovation, the role of balancing exploration and exploitation in other important organizational domains, i.e., marketing, and the interaction effect of ambidexterity across different domains have been overlooked. This study contributes to this line of research by investigating how firms simultaneously balance exploration and exploitation across two critical domains, namely technology innovation and market innovation. The study distinguishes four types of configurations: market leveraging (technology exploration and market exploitation), technology leveraging (technology exploitation and market exploration), pure exploitation (technology exploitation and market exploitation), and pure exploration (technology exploration and market exploration). From an organizational ambidexterity perspective, the current work investigates whether and how these different combinations exert distinctive effects on firm performance. Specifically, the article posits that (a) technology exploration and market exploitation complement each other, and (b) technology exploitation and market exploration also complement each other, such that both market leveraging and technology leveraging strategies have positive effects on firm performance. The article also maintains that such positive relationships are fully mediated by differentiation and low cost advantages. Conversely, it is argued that (c) technology exploration and market exploration conflict with each other, and (d) so do technology exploitation and market exploitation, such that both pure exploration and pure exploitation have negative effects on firm performance. Hypotheses were tested using survey data collected from 292 manufacturing and service firms in China. The results supported most of the hypotheses, except that pure exploration demonstrated no significant relationship with firm performance.     

知识存量、双元学习与企业绩效关系研究

知识是企业的战略性资源，是企业竞争优势提升的重要源泉，但关于知识如何影响企业绩效的内在机理尚不明晰。本文引入企业双元学习中介，探索并检验知识存量对企业绩效的作用过程。采用回归方法分析了223家科研技术类企业数据后，本文得出结论：（1）企业知识存量对企业绩效有着促进作用；（2）知识存量是通过作用于双元学习而对企业绩效产生影响；（3）企业规模在此过程中有着显著调节作用。本文研究为企业有效开展知识积累及双元学习活动提供启示。     

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.     

Alliance Concentration in Multinational Companies: Examining Alliance Portfolios,Firm Structure,and Firm Performance

Research summary: This article explores the distribution of alliances across firms' internal structure. Focusing on multinational companies, we examine the impact of alliance portfolio concentration—i.e., the extent to which alliances are concentrated within a limited number of geographic units—on focal firms' performance. Relying on Knowledge‐Based View (KBV) insights, we hypothesize that an increase in alliance portfolio concentration positively influences firm performance and that alliance portfolio size negatively moderates this relationship. Our empirical results enrich the emerging capability perspective on alliance portfolios, point to the relevance of conceptualizing focal firms in alliance portfolio research as polylithic entities instead of monolithic ones, and provide new insights into how firms create value by potentially recombining externally accessed knowledge. Managerial summary: In the setting of multinational companies, we examine whether alliance activities are concentrated in a limited number of subsidiaries or are highly dispersed across multiple subsidiaries. We find that, over time, firms exhibit different patterns in terms of alliance portfolio concentration. In addition, the results show that, for MNCs with a relatively small alliance portfolio, an increase in alliance portfolio concentration is positively related to their financial performance. However, when MNCs' alliance portfolios are relatively large, the relationship between alliance portfolio concentration and firm performance becomes negative. Jointly, these findings suggest that the distribution of alliances across firms' internal structure is an important factor in shaping potential knowledge recombination benefits from alliance portfolios. Copyright © 2017 John Wiley & Sons, Ltd.     

Resource ambidexterity through alliance portfolios and firm performance

Research summary : Partner resources can be an important alternative to internal firm resources for attaining dual and seemingly incompatible strategic objectives. We extend arguments about managing conflicting objectives typically made at the firm level to the level of a firm's alliance portfolio. Specifically, will a balance between revenue enhancement and cost reduction attained collectively through partner resources accessed via a firm's various alliances be similarly beneficial for firm performance? Additionally, how do strategic attributes of alliance portfolio configuration, specifically alliance portfolio size and partner resource scope, condition the balance‐performance relationship? Based on data from the global airline industry, we find support for the balance‐performance relationship, though such balance is less beneficial for firms in the case of access to a broader resource scope per partner . Managerial summary : Increasing revenue and reducing costs simultaneously can potentially enhance firm competitiveness. We highlight that an alliance strategy can be an important alternative to internal resources for attaining such dual strategic objectives, particularly when partner resources accessed through alliances are treated collectively as portfolios. We examine the importance of balancing product‐market extending and efficiency‐improving partner resources in the global airline industry as well as the impact of two alternate strategies for accessing resources through alliances: fewer partners with more resources per partner or more partners with fewer resources per partner. We find that resource balance at the portfolio level helps airlines improve performance. Our results also suggest that managers should be cautious of accessing too many resources through just a few partners . Copyright © 2015 John Wiley & Sons, Ltd.     

Revisiting the firm,industry, and country effects on profitability under recessionary and expansion periods: A multilevel analysis

Research summary: Despite voluminous past research, the relevance of firm, industry, and country effects on profitability, particularly under adverse contexts, is still unclear. We reconcile institutional theory with the resource‐based view and industrial organization economics to investigate the effects of economic adversity, such as the 2008 global economic crisis. Using a three‐level random coefficient model, we examine 15,008 firms across 10 emerging and 10 developed countries for the 2005–2011 period. We find that firm effects become stronger under adversity, whereas industry effects become weaker, as well as country main and interaction effects, particularly among the emerging economies. These findings confirm our assumptions that the firm's own fate is, to a great extent, self‐determined; a reality that is even more pronounced during periods of extreme economic hardship. Managerial summary: In this research, we examine how generalized economic adversity affects the balance across the firm‐, industry‐, and country‐specific factors determining firm profitability. We specifically examine 15,008 firms from 10 emerging and 10 developed countries during the 2005–2011 period to investigate the effects of the 2008 global economic crisis on firm performance. We find that in such adverse conditions, the role of the industry and the country are reduced and the firm's own resources and capabilities become more pertinent for firm performance. This phenomenon is more pronounced across emerging markets. We conclude that the firm's own fate is, to a great extent, self‐determined, a reality that is markedly more evident during periods of extreme economic hardship. Copyright © 2015 John Wiley & Sons, Ltd.     

Exploring and exploiting network relationships to commercialize technology: A biofuel case

We seek to understand how ambidexterity of exploring and exploiting is managed in an innovation context. We contribute to the literature by elaborating exploring and exploiting as three processes shared between actors in a dynamic business network. An innovator firm needs to (1) explore the current business network to find partners and gain access to resources, (2) develop business relationships for exploiting the emerging network, and (3) explore and find a network-technology fit inside a future business network. The final process is essential to innovation and commercialization. Further, the quality of the network-technology fit will affect the speed and success of the other two processes. Our contribution provides an understanding of the way in which managers are exploring and exploiting the business network to adapt and commercialize a breakthrough technology. A longitudinal case study of biofuel development and commercialization exemplifies the conceptual issues. Final sections address managerial and research implications.     

The ambidextrous patterns for managing technological and marketing innovation

Built upon organizational ambidexterity theory, this study provides a new perspective in managing technological and marketing innovation. It distinguishes between simultaneous and sequential patterns of innovation within a firm and takes a longitudinal approach in examining the differential effects of these two ambidextrous patterns of innovation on firm performance. Further, this study investigates the contingent roles of internal product scope and external market dynamism on the above relationships. Using panel data from 158 U.S. firms over 26 years, we find that both simultaneous and sequential patterns are positively associated with firm performance. Further, our findings indicate that a broader product scope strengthens the effect of the simultaneous pattern on firm performance, while weakening that of the sequential pattern on firm performance. When market dynamism increases, the effect of the simultaneous pattern on firm performance is strengthened, while that of the sequential pattern is weakened. Our findings offer managers guidance on the choice of innovation patterns under certain contingencies and how to better manage technological and marketing innovation over time.     

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.     

Managing the Exploitation/Exploration Paradox: The Role of a Learning Capability and Innovation Ambidexterity

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 Taiwanese 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‐Western context, i.e., Taiwan.     

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.     

The asymmetric moderating role of market orientation on the ambidexterity-firm performance relationship for prospectors and defenders

Drawing on the resource-based view of the firm and, in particular, the capabilities perspective of firm performance, the authors examine the relationship between ambidexterity and firm performance for two strategy typologies: prospectors and defenders. Ambidexterity, defined as the combination of two discrete capabilities (exploration and exploitation), should have a less negative effect on firm performance among prospectors that add exploitation to exploration than among defenders who add exploration to exploitation. Hence, this research predicts an asymmetric effect of ambidexterity on firm performance for prospectors and defenders. The authors further posit that a boundary-spanning culture, such as market orientation, can function as a metaculture by integrating the subunit cultures generated by exploration and exploitation. As a result, market orientation should mitigate the negative effect of ambidexterity on firm performance, albeit differently for prospectors and defenders, and thus point to an asymmetric moderating role of market orientation. The findings provide mixed results, which the authors discuss along with some theoretical and managerial implications.     

Knowledge exchange and knowledge protection in interorganizational learning: The ambidexterity perspective

Are knowledge exchange and knowledge protection conflicting or complementary? Although facilitating knowledge exchange and protecting core proprietary knowledge are important in interorganizational learning, extant studies often regard them as conflicting activities. Few studies have discussed the mechanisms that can help firms achieve both. In this current study, we extend the concept of ambidexterity to the interorganizational learning context and suggest several mechanisms that can enhance knowledge exchange and knowledge protection simultaneously. We conducted a survey and the empirical results reveal that experience sharing and shared interpretation are positively associated with knowledge exchange success. Hostage arrangement enhances the level of knowledge protection, whereas reciprocal investment has no effect on knowledge protection. Furthermore, ambidexterity (the product term of knowledge exchange success and knowledge protection) significantly affects the performance of a firm. Finally, we discuss the implications of this research and offer suggestions for future research.     

The management of coopetitive tensions within multi-unit organizations

Coopetition strategy is often considered critical for firm performance (Gnyawali, He & Madhavan, 2008; Yami, Castaldo, Dagnino & Le Roy, 2010). However, this paradoxical strategy creates tension, especially when coopetition occurs within an organization (Tsai, 2002; Luo, Slotegraaf & Pan, 2006). This paper addresses existing knowledge gaps by providing the first analysis of the specific managerial methods and the key approaches needed to reduce internal tensions within multi-unit and multi-brand organizations. Using an in-depth study approach in the banking industry, we examine two exemplary cases: Crédit Agricole (CA), which is the leading bank in France and the third leading bank in Europe, and Banque Populaire Caisse d'Epargne (BPCE), which is the third leading bank in France. Our findings indicate that firms simultaneously use formal and informal coordination to manage coopetitive goals. Moreover, to reduce tensions due to coopetition, the banks have developed an original organizational model that allows for the distribution of the antagonist powers and fosters integration. The research shows that inter-unit projects balance responsibilities across the firm, while horizontal coordination and social interaction also eliminate blocking and facilitate decision making. To the best of our knowledge, this study represents the first attempt to examine the management of coopetitive tensions within a multi-unit and multi-brand organization.     

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.     

Competitive positioning within and across a strategic group structure: the performance of core,secondary, and solitary firms

Drawing from economic and cognitive theories, researchers have argued that firms within an industry tend to cluster together, following similar strategies. Their positioning in strategic groups, in turn, is argued to influence firm actions and firm performance. We extend this research to examine performance implications of competitive positioning not just among but also within groups. We find that performance differences within groups are significantly larger than across groups, suggesting that some firms within groups develop better resource or competitive positions. We also find that secondary firms within a group outperform both core firms within the group and solitary firms, the latter being those not belonging to any multifirm strategic group. This suggests that secondary firms may be able to effectively balance the benefits of strategic distinctiveness with institutional pressures for similarity. We conclude that the primary implication of strategic groups does not relate to the ability of firms to create stable, advantageous market segments through collusion. Instead, strategic groups represent a range of viable strategic positions firms may stake out and use as reference points. Moreover, our results concerning secondary firms indicate that firm positioning within a group structure can have performance implications. Copyright © 2002 John Wiley & Sons, Ltd.     

Explaining the entrepreneurial orientation–performance relationship in emerging economies: The intermediate roles of absorptive capacity and improvisation

Research has established the relevance of entrepreneurial orientation (EO) to firm performance but skepticism remains because of the ambiguity surrounding how EO might improve firm performance. We examine the key concepts of absorptive capacity and improvisation as two alternative learning modes serving as intermediate steps between EO and firm performance. Locating our study within manufacturing SMEs in Malaysia, we find that absorptive capacity enhances the EO–performance relationship, both as a moderator and a mediator. In contrast to expectations, however, improvisation showed no such effects but conferred its own separate benefits instead. We further discuss the different effects of these learning modes on high performance and low performance groups.     

Strategic enablers of service-sales ambidexterity: A preliminary framework and research agenda

In recent years, service-sales ambidexterity was proposed as a new type of ambidexterity. In particular, the emerging literature on service-sales ambidexterity builds on the contextual ambidexterity literature to argue that the two key activities of a salesperson – that is, service activities and sales activities – can be simultaneously maximized through finding and exploiting synergies between these two activities. While research in this area has so far focused on the drivers of service-sales ambidexterity, our knowledge regarding the strategic enablers of this construct is impoverished. In this paper, drawing upon the dynamic capabilities framework, we devise a preliminary framework of the strategic enablers of service-sales ambidexterity. Then, we further extend that framework by identifying key classes of strategic variables that can potentially enable service-sales ambidexterity and by providing illustrative examples. This paper has contributions to and implications for the literature on service-sales ambidexterity and dynamic capabilities.     

Slack resources,firm performance,and the institutional context: Evidence from privately held European firms

Research summary : Integrating the behavioral and institutional perspectives, we propose that a country's formal institutions, particularly its legal frameworks, affect managers' deployment of slack resources. Specifically, we explore the moderating effects of creditor and employee rights on the performance effects of slack. Using longitudinal data from 162,633 European private firms in 26 countries, we find that financial slack enhances firm performance at diminishing rates, whereas human resource (HR) slack lowers performance at diminishing rates. However, financial slack has a more positive effect on firm performance in countries with weaker creditor rights, whereas HR slack has a more negative effect on performance in countries with stronger employee rights. The results provide a richer view of the relationship between slack and firm performance than currently assumed in the literature. Managerial summary : A key dilemma managers often encounter is whether, on the one hand, they should build in excess resources to buffer their firms from internal and external shocks and to pursue new opportunities or whether, on the other hand, they should develop “lean” firms. Our study suggests that excess cash resources—which are usually viewed as easy to redeploy—benefit firm performance, especially when firms operate in countries with weaker creditor rights. However, excess human resources—which are usually viewed as more difficult to redeploy—hamper firm performance, particularly when firms operate in countries with stronger labor protection laws. Thus, the management of slack resources critically depends on the characteristics of these resources (e.g., redeployability) and the institutional context in which managers operate. Copyright © 2016 John Wiley & Sons, Ltd.     

Resource relatedness and the mode of entry into new businesses: Internal resource accumulation vs. access by collaborative arrangement

When firms seek to enter a new business segment, they have to decide how to best gain access to the required resources. This paper analyzes how resource relatedness influences a firm's decision between internal development and collaborative arrangement as modes of entry. We distinguish between a firm's capacity to transfer its established resources to the new segment (resource transferability) and the integration and synergistic combination of current firm resources with target segment resources in day‐to‐day operations (resource complementarity). Resource transferability makes entry by internal development more likely, but this effect depends on segment characteristics. Synergies from complementary resources can be exploited more easily within firm boundaries than across an alliance interface. However, certain partner characteristics can substitute in part for belonging to the same firm. Copyright © 2014 John Wiley & Sons, Ltd.