Organizational memory and new product development performance: Investigating the role of organizational ambidexterity

Abstract

Organizational memory representing stored organizational knowledge and experience may have favorable or unfavorable implications for new product development (NPD) performance in technologically turbulent markets. To enhance NPD performance, it is important to understand the mechanisms and contextual factors that shape the role of organizational memory. Analysis of responses from a survey of C-level executives in Korean companies indicates that the total amount of exploration and exploitation can help firms better utilize and benefit from organizational memory for enhancing NPD performance. However, to gain optimum benefits firms need to consciously maintain an asymmetric balance between exploitation and exploration, leaning toward exploration, because organizational memory as routines tends to overemphasize exploitation. The results indicate that the interaction between organizational innovativeness and organizational memory can increase the total amount of exploration and exploitation, but cannot contribute to maintaining a balance between the two. On the contrary, the interaction between technological turbulence and organizational memory helps balance the two learning activities, but does not increase the total effort devoted to them.