One of the most challenging resource allocation tasks for managers is to balance short-termand long-termproducts development initiatives, since exploitative (i.e., short-termfocused) resource allocation patterns prevent managers from recognizing the existence or significance of exploratory (i.e., long-termfocused) opportunities. Recent research on organizational ambidexterity promises the potential to overcome this trade-off relationship, but they lack clear indications concerning the mix of exploitation and exploration that would result in an optimal degree of ambidexterity. Through the analysis of a unique data set on development resource allocation patterns for 231 new pharmaceutical products, as well as on the economic value of those products, we show that pharmaceutical companies realize a higher exploration degree of valuableness and hence an optimal level of ambidexterity by allocating roughly 1.5 times more development resources to exploitative products than to exploratory ones
