The role of exploration and exploitation for innovation success: effects of business models on organizational ambidexterity in the semiconductor industry

Organizational ambidexterity is the ability of organizations to balance exploratory and exploitative activities, and is essential if firms are to survive in dynamic environments. Furthermore, the ambidexterity hypothesis states that firms that have this ability (i.e. are ambidextrous) are more successful. However, this opens a number of questions, namely how firms can balance both types of activities and if this ability is affected by other factors? The purpose of this paper is therefore to investigate the degree to which the need to balance exploration and exploitation for innovation depends on the business models pursued by firms in the global semiconductor industry. Furthermore, we integrate this with an assessment of the relative relevance of these internal knowledge sourcing mechanisms in comparison to mechanisms facilitating external knowledge spillovers, namely alliances and acquisitions. In summary, we find that mainly internal knowledge management supports innovation success but in a differentiated manner. The effect on innovation success is moderated by the business models firms adopt, which suggests the need for a more differentiated view of the ambidexterity hypothesis.