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

  • Justin J. P. Jansen

    ()

    (RSM Erasmus University, P.O. Box 1738, 3000 DR Rotterdam, The Netherlands)

  • Frans A. J. Van Den Bosch

    ()

    (RSM Erasmus University, P.O. Box 1738, 3000 DR Rotterdam, The Netherlands)

  • Henk W. Volberda

    ()

    (RSM Erasmus University, P.O. Box 1738, 3000 DR Rotterdam, The Netherlands)

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, whereas 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.

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File URL: http://dx.doi.org/10.1287/mnsc.1060.0576
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Article provided by INFORMS in its journal Management Science.

Volume (Year): 52 (2006)
Issue (Month): 11 (November)
Pages: 1661-1674

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Handle: RePEc:inm:ormnsc:v:52:y:2006:i:11:p:1661-1674
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  8. Jongseok Lee & Jeho Lee & Habin Lee, 2003. "Exploration and Exploitation in the Presence of Network Externalities," Management Science, INFORMS, vol. 49(4), pages 553-570, April.
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