Does striking a balance pay off? Implications of innovative ambidexterity for SMEs during COVID-19 crisis

Abstract

PurposeExploration and exploitation have long been documented as prominent approaches to business management and organizational adaptation to external environment. Maintaining balance between these activities is a key to survival and prosperity. However, there is little direct evidence of the effect of such combined usage of both approaches on firm performance in times of crisis, especially within small- and medium-sized enterprises (SMEs). The purpose of this paper is to reveal the role of balanced ambidexterity in shaping firm performance during COVID-19 recession.Design/methodology/approachBased on a survey of 333 Russian SMEs, the authors test the proposed theoretical framework linking innovative ambidexterity to firm performance level and variability taking into account technological uncertainty.FindingsThe results show that innovative ambidexterity tends to increase level and decrease variability of performance outcomes, whereas technological uncertainty acts as a positive contingency for this impact.Originality/valueThe results provide an improved understanding of ambidexterity and organizational literatures by clarifying the contingent nature of the ambidexterity–firm performance relationship during COVID-19 recession.