Taking a closer look at the regionally clustered firms: How can ambidexterity explain the link between management, entrepreneurship, and innovation in a post-industrialized world?

Abstract

AbstractThe extant literature shows that innovation emerges from an interorganizational process, where a division of labor (both exploitation and exploration related) occurs among the actors within the cluster. Clustered firms are ambidextrous when they balance innovative activities that exploit existing competencies and are open to new technological approaches through exploration. In this context, we are interested in the role of clusters as supportive structures creating an atmosphere that encourages the development of interorganizational relationships, which assume a key relevance in explaining the ambidexterity and innovation of firms within the cluster. The question is whether there is an ideal combination to compete today (exploitation) while preparing to compete tomorrow (exploration), and if the networks developed in an industrial cluster play a role on determining innovative performance. Therefore, this study contributes to deepen the knowledge about the role of ambidexterity and network clustering on innovation. Specifically, by presenting a framework that explores the influence of external stakeholders and other clustered agents in the response of ambidextrous organizations to the challenges raised by environmental changes, we extend our discussion to a higher level of abstraction showing how ambidexterity can be the “black box” that connects the entrepreneurship, management, and innovation fields. The analysis of 1467 Portuguese firms suggests that network clustering has a direct positive impact on innovative performance, but also an indirect, mediated effect through exploration. Additionally, we found that a combination of exploitation and exploration (i.e., combined ambidexterity), and the trade-off between the two dimensions (i.e., imbalanced ambidexterity), leads to better innovation in agglomeration contexts. Our results, therefore, provide evidence that ambidexterity is the key to manage innovation strategic entrepreneurship’s tensions but, the way in which they are managed, is contingent on the clustered firms’ ability or inability to simultaneously pursue both exploitation and exploration.