Performance outcomes of interaction, balance, and alignment between exploration and exploitation in the technological innovation domain

Abstract

A key point in previous research on ambidexterity is the operationalisation of the ambidexterity concept. Usually, multiplicative interaction (i.e., showing high scores in exploration and exploitation) and balance are the two facets considered. We argue that a third facet should be added: alignment, which refers to the extent to which exploration and exploitation are certainly interrelated and complement each other. The results of the research show that, unlike previous research, what truly matters for firm performance is to focus on radical innovation and to develop incremental innovations that truly complement the former ('alignment'). On the contrary, interaction and balance between both types of innovation do not show a significant influence on company performance. Specific measures to operationalise the alignment construct are provided.