How Does Ambidexterity Matter for Radical and Incremental Innovation Capabilities?

Abstract

The notion that ambidextrous learning—involving both exploration and exploitation—will improve firm performance, has become prominent in academia and practice. While arguing that innovation capabilities are central to the ambidexterity hypothesis, we investigate how the two dimensions of ambidextrous learning (combined and balanced) affect firms’ incremental and radical innovation capabilities. Based on organizational learning theory, we develop theoretical arguments underpinning the idea that the combined dimension of ambidexterity drives incremental innovation capability while the balance dimension of ambidexterity positively influences radical innovation capability. We base our empirical analysis on a survey of high-tech firms in China. We find support for our theoretical arguments.