Configurations of Innovations across Domains: An Organizational Ambidexterity View

Feng Zhang, Yonggui Wang, Dahui Li, Victor Cui

Research output: Contribution to journalArticlepeer-review

11 Scopus citations

Abstract

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.

Original languageEnglish (US)
Pages (from-to)821-841
Number of pages21
JournalJournal of Product Innovation Management
Volume34
Issue number6
DOIs
StatePublished - Nov 2017

Bibliographical note

Funding Information:
This research was supported in part by National Natural Science Foundation of China (Grant No. 12&ZD205, 71302005), Social Science Foundation of Beijing (Grant No. 15JDJGA044) and Collaborative Innovation Center for China Economy.

Keywords

  • differentiation
  • exploitation
  • exploration
  • low cost
  • market
  • technology

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