Uriel Stettner and Dovev Lavie
Keywords:exploration and exploitation;internal organization;alliance;acquisition;firm performance;software industry
Prior research on ambidexterity has limited its concern to balancing exploration and exploitation via particular modes of operation. Acknowledging the interplay of tendencies to explore versus exploit via the internal organization, alliance, and acquisition modes, we claim that balancing these tendencies within each mode undermines firm performance because of conflicting routines, negative transfer, and limited specialization. Nevertheless, by exploring in one mode and exploiting in another, i.e., balancing across modes, a firm can avoid some of these impediments. Thus, we advance ambidexterity research by asserting that balance across modes enhances performance more than balance within modes. Our analysis of 190 U.S.-based software firms further reveals that exploring via externally oriented modes such as acquisitions or alliances, while exploiting via internal organization, enhances these firms' performance. Copyright © 2013 John Wiley & Sons, Ltd.