Strategic ambidexterity in green product innovation: Obstacles and implications

Abstract

AbstractScholars and managers routinely point to various uncertainties in explaining why manufacturing firms struggle with green product innovation and why green product innovation is different from conventional product innovation. This explanation is yet unsatisfactory as a thorough understanding of how a firm deals with uncertainty exists in conventional innovation literature. At the same time, there is a lack of agreement and understanding how a firm's capabilities shape its green product innovation practices, which could contribute to this gap. Based on a case study at five multinational manufacturers, this paper sets out to contribute to the capability perspective on green product innovation by understanding how manufacturing firms learn and innovate in order to make and sell greener products. A powerful and favored way for firms to learn and innovate under uncertainty is through strategic ambidexterity. With this learning strategy, firms rely on existing competences in one area (exploitation) while they simultaneously explore new competences in another area (exploration). However, our results show that strategic ambidexterity is oftentimes unachievable due to several factors, and as result, firms are forced to choose between a highly uncertain and risky alternative strategy and a more conservative but also less green strategy based on exploitation only, which is often the preferred option. In addition, our findings shed a new light on the role of uncertainty in green product innovation as we conclude that uncertainties firms face in green product innovation are indeed abundant, but are fundamentally not new nor caused by external sources only.