Ambidexterity and Organizational Survival: Evidence from Korean SMEs
Exploration and Exploitation in Early Stage Ventures and SMEs
ISBN: 978-1-78350-655-2, eISBN: 978-1-78350-656-9
Publication date: 4 August 2014
Abstract
Despite the theoretical assumption that balancing exploration and exploitation is important for long-term performance and survival, previous studies have provided few insights into these relationships because they have focused mainly on the short-term financial performance of organizations. In addition, balancing exploration and exploitation is a critical challenge for small- and medium-sized enterprises (SMEs) that lack the resources, capabilities, and experience necessary to achieving ambidexterity. In this regards, this study empirically explores the relationship between the exploration–exploitation balance and SMEs’ longevity in order to address two important questions from the ambidexterity perspective: (1) How does the balance between exploration and exploitation influence organizational survival? (2) How is the appropriate balance between exploration and exploitation influenced by an organization’s internal and external contexts?
An analysis of 1981–2012 data from the Korean SMEs in IT industry reveals an inverted U-shaped curvilinear relationship between the extent of exploratory innovation and organizational longevity, providing support for the ambidexterity perspective. We further examine the moderating effects of financial slack and environmental dynamism on the relationship between exploratory innovation and organizational longevity. The results indicate that financial slack moderated the exploration–longevity relationship and call for a contingency approach for a better understanding of performance implications of the exploration–exploitation balance.
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Acknowledgements
Acknowledgment
This work was supported by the National Research Foundation of Korea Grant funded by the Korean Government (NRF-2013S1A5A2A01018077) and by Kyungpook National University Research Fund, 2013.
Citation
Kim, G. and Huh, M.-G. (2014), "Ambidexterity and Organizational Survival: Evidence from Korean SMEs", Exploration and Exploitation in Early Stage Ventures and SMEs (Technology, Innovation, Entrepreneurship and Competitive Strategy, Vol. 14), Emerald Group Publishing Limited, Leeds, pp. 123-148. https://doi.org/10.1108/S1479-067X20140000014003
Publisher
:Emerald Group Publishing Limited
Copyright © 2014 Emerald Group Publishing Limited