Pathways for Balancing Exploration and Exploitation in Innovations: A Review and Expansion of Ambidexterity Theory

Organizational research describes the inherent tension between innovation, as a means to adapt to environmental change, and continuing to do what one does well and what current customers appreciate. Managing this tension successfully leads to so-called ambidexterity. How to achieve it is still a matter of debate: proponents of structural approaches recommend a separation of exploration and exploitation, while proponents of so-called contextual ambidexterity suggest that contextual factors such as culture and process are equal if not more critical in leading the organization to ambidexterity. Based on the findings of empirical ambidexterity research, many more factors are suggested, though they are rarely researched in an ambidexterity context nor are the interdependencies between the factors and the known ambidexterity strategies described. To guide future research, this paper develops an expanded and system-focused framework for achieving ambidexterity. It is used to review and integrate findings from organizational theory and neighboring disciplines, including project management theories, knowledge management theories, human resource management theories, and open and distributed innovation theories. Managerial implications are discussed and illustrated with a case example. The resulting work provides the basis for explicitly modeling the drivers and inhibitors of exploration and exploitation and their interdependencies. In future research, this can be used to better understand and overcome conflicting objectives, devise new approaches for achieving ambidexterity, and ultimately design more successful organizations