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

Justin Jansen, Frans Van Den Bosch and Henk Volberda

ERIM Report Series Research in Management from Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam

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: Coordination Mechanisms; Environment; Exploratory and Exploitative Innovation; Performance (search for similar items in EconPapers)
JEL-codes: D21 L20 M O3 (search for similar items in EconPapers)
Date: 2006-08-14
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Citations: View citations in EconPapers (487)

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