Facing the challenge of Innovation Ambidexterity: drivers and moderators in SME

Proceedings of The 2nd International Conference on Advanced Research in Business, Management and Economics

Year: 2019

DOI: https://www.doi.org/10.33422/2nd.icabme.2019.12.881

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Facing the challenge of Innovation Ambidexterity: drivers and moderators in SME

Simona Popa and Pedro Soto-Acosta



This paper extends prior literature by analyzing the effect of technological, organizational and environmental factors on innovation ambidexterity and its influence on the performance of small- and medium-sized enterprises (SMEs) as well as the moderating effect environmental dynamism on this relationship. Building on the Technology–Organization–Environment theory and the Knowledge-Based View, this paper develops an integrative research model, which analyzes the network of relations using covariance-based structural equation modeling. Results show that information technology (IT) capability, knowledge management (KM) capability and environmental dynamism are positively associated with innovation ambidexterity. In addition, environmental dynamism is found to strengthen the positive effect of innovation ambidexterity on firm performance. Although many studies have highlighted that being ambidextrous is more challenging for SMEs than for their larger counterparts, these findings support the idea that innovation can be developed in an ambidextrous manner within a single SME as long as the firm is capable of creating a suitable organizational context and giving a prompt response to changes in the business environment.

Keywords: environmental dynamism; firm performance; IT capability; KM capability; structural equation modelling.