Exploratory Innovation, Exploitative Innovation, and Performance: Effects of Organizational Antecedents and Environmental Moderators
Justin J. P. Jansen
Rotterdam School of Management
Frans A. J. Van Den Bosch
Erasmus University Rotterdam (EUR) - Department of Strategic Management and Entrepreneurship; Erasmus Research Institute of Management (ERIM)
H. W. Volberda
Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM); Erasmus Research Institute of Management (ERIM)
14 2006 8,
ERIM Report Series Reference No. ERS-2006-038-STR
Research on exploration and exploitation is burgeoning, yet our understanding of the antecedents and consequences of both activities remains rather unclear. We advance the growing body of literature by focusing on the apparent differences of exploration and exploitation and examining implications for using formal (i.e. centralization and formalization) and informal (i.e. connectedness) coordination mechanisms. This study further examines how environmental aspects (i.e. dynamism and competitiveness) moderate the effectiveness of exploratory and exploitative innovation. Results indicate that centralization negatively affects exploratory innovation while formalization positively influences exploitative innovation. Interestingly, connectedness within units appears to be an important antecedent of both exploratory and exploitative innovation. Furthermore, our findings reveal that pursuing exploratory innovation is more effective in dynamic environments whereas pursuing exploitative innovation is more beneficial to a unit’s financial performance in more competitive environments. Through this richer explanation and empirical assessment, we contribute to a greater clarity and better understanding of how ambidextrous organizations coordinate the development of exploratory and exploitative innovation in organizational units and successfully respond to multiple environmental conditions.
Number of Pages in PDF File: 35
Keywords: Exploratory and Exploitative Innovation, Coordination Mechanisms, Environment, Performance
JEL Classification: M, D21, L20, O3working papers series
Date posted: December 23, 2006
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