Exploration and exploitation complement one another in the organizational learning. Exploration fosters the ability to diversify, while exploitation increases specialization. Together, these two modes promote innovation and subsequent organizational renewal. While exploration facilitates the discovery of new knowledge, exploitation merges this knowledge with previously held knowledge and skills to expand and strengthen the firm.
The current scientific literature falls short in explaining in practical terms how this fusion takes place, produces innovations, and renews the strategy of an organization.
By leveraging an intimate relationship with the innovation activities of a large-scale multinational enterprise, Laukkanen created an Integrated Process Model of the interplay between ambidextrous innovation activities and the strategy and structure development of a company. The Integrated Process Model highlights the conversion between exploration and exploitation as the central mechanism for establishing a dialogue that fosters reciprocal adjustment between the innovation activity, strategy and structure of the firm.
The study identified three conversion patterns that bring the discoveries from the exploration mode to the commercial realm. In the ‘linear’ pattern, the innovation activities execute the fine-grained strategy with the established structure of the company. The linear innovation activities produce incremental innovations that sustain the strategy of the firm. In the ‘transforming’ pattern, an iterative conversion process facilitates concurrent reciprocal adjustments in the innovation activity and strategy and structure of the firm. The adjustments of the strategy and structure are necessary for radical innovations. In the ‘experimenting’ conversion pattern, the activity is intermittently connected to the strategy and structure development of the company. The intermittent connection provides the experimenting activity with the latitude to craft new business entries outside the traditional domain of the company. The intermittent connection between the innovation activity and strategy and structure implies that the strategic learning takes place primarily in retrospect to the experiment.
The research illuminated ambidexterity as an eclectic organizational learning phenomenon that cuts through the fabric of an organization. The study captured the ambidexterity phenomenon on three ‘presentation layers’. Ambidexterity was identified both in actions and in their concrete outcomes, i.e. innovations. Additionally, ambidexterity left observable traces on the realized strategy of the firm. Each presentation layer of ambidexterity needs to be managed on its own. However, the study argues that the most decisive factor in making ambidexterity productive is the purposefulness of the continuum across these presentation layers. The three identified innovation patterns represent alternative paths from ambidextrous activities to their eventual outcomes.
The Integrated Process Model of ambidexterity provides a conceptualization for actualizing ambidexterity to the strategic benefit of a company. This study provides guidance for firms seeking to promote ambidextrous activities for innovations and organizational renewal
