Does ambidexterity in marketing pay off? The role of absorptive capacity

Abstract

Research in marketing and other organizational domains shows that the ambidexterity–firm performance relationship is elusive, and high levels of both exploitation and exploration may not always lead to higher firm performance. To shed light on this topic, this study examines marketing ambidexterity (MA) as balanced levels of exploitation and exploration across marketing activities and tests how firm-level absorptive capacity (AC) moderates the MA–firm performance relationship. Analyzing a unique dataset that combines survey and archival financial data from 318 private firms, this study finds that MA is positively associated with sales growth for firms with relatively strong AC. This relationship becomes negative for firms with weak AC. Results are robust when the additive and multiplicative terms of exploitation and exploration are controlled for. Study findings underscore the critical role of organizational knowledge processing in ensuring that firms can benefit from the pursuit of MA.