Exploratory Innovation, Exploitative Innovation, and Performance: Effects of Organizational Antecedents and Environmental Moderators

35 Pages Posted: 23 Dec 2006

See all articles by Justin J. P. Jansen

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)

Date Written: August 14, 2006

Abstract

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.

Keywords: Performance, Environment, Coordination Mechanisms, Exploratory and Exploitative Innovation

Suggested Citation

Jansen, Justin J. P. and Van Den Bosch, Frans A. J. and Volberda, Henk W., Exploratory Innovation, Exploitative Innovation, and Performance: Effects of Organizational Antecedents and Environmental Moderators (August 14, 2006). ERIM Report Series Reference No. ERS-2006-038-STR. Available at SSRN: https://ssrn.com/abstract=924507

Justin J. P. Jansen (Contact Author)

Rotterdam School of Management ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands
+31 10 408 97 82 (Phone)
+31 10 408 90 13 (Fax)

HOME PAGE: http://www.rsm.nl/jjansen

Frans A. J. Van Den Bosch

Erasmus University Rotterdam (EUR) - Department of Strategic Management and Entrepreneurship ( email )

RSM Erasmus University
Rotterdam, 3000 DR
Netherlands
+31 10 408 1955/2005 (Phone)
+31 10 453 0137 (Fax)

HOME PAGE: http://www.rsm.nl/fvandenbosch

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Henk W. Volberda

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands
+31 10 408 2761 (Phone)
+31 10 408 9013 (Fax)

HOME PAGE: http://www.eur.nl/fbk/dep/dep4/faculty_members/Henk_Volberda

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

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