The mediating role of quality on the relationship between cultural ambidexterity and innovation performance

Abstract

Firms’ competencies and competitive advantages erode and are required to continually update and change through learning. Organisational learning is a prerequisite for the creation and acquisition of knowledge, both catalysts for innovation. There are two processes of learning, exploitation (incremental) and exploration (discontinuous). Organisational excellence can in part be achieved by ambidexterity, that is, by the balanced pursuit of both incremental and discontinuous change by organisations. An ambidextrous organisational culture can be an important factor for a firm’s innovation capability. Thus, factors affecting organisational culture towards learning may advance innovative capability. Quality also plays an important role to knowledge creation and innovation behaviour. Indeed, knowledge management can improve innovation performance via total quality management practices. Quality, then, may serve as a mediator between organisational learning culture and innovation outcomes. Using the Organization's for Economic Cooperation and Development and European Union established criteria for technological intensity, as well as knowledge – intensity criteria, 480 Greek mid-to-high technology and Small and Medium Enterprises (SMEs) were contacted with 54 eventually participating. Statistical analysis (partial least squares-structural equation modeling) confirms the mediating role of the quality competitive capability on the association between exploitation and exploration-oriented organisational cultures and innovation performance. The study is cross-sectional, thus causality of the relationships under investigation cannot be justified. The cultural context should also be considered, since field research was conducted in Greece suffering from deep financial recession. The importance of quality competitive capability, in order to interpret organisational ambidexterity into innovative action in mid-to-high technology Greek SMEs during the financial crisis, guides managerial implications.