Abstract
This study develops a dynamic capabilities-based framework of organizational sensemaking through combinative capabilities towards exploratory and exploitative product innovation. Organizational sensemaking helps organizations develop cognitive maps of turbulent environments through its construction of shared interpretations of environmental changes. We argue, however, that successful exploratory and exploitative product innovation are not guaranteed by organizational sensemaking alone, but instead depend on how firms' capabilities synergistically combine and transform knowledge resources. Organizational sensemaking and combinative capabilities are together positioned as important dynamic capabilities. The dynamic capabilities-based framework is applied to explain why and how organizational sensemaking determining superior exploratory and exploitative product innovation in turbulent environments is realized by combinative capabilities. Furthermore, the paper examines the differential effects of combinative capabilities on the firm's exploratory versus exploitative product innovation. Firms can better understand how to leverage different type of combinative capabilities for optimal outcomes.
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