How incentive synergy and organizational structures shape innovation ambidexterity

Organizational incentives and structures play a crucial role in realizing explorative and exploitative innovations in firms. Existing studies have neglected the role of trade-off mechanisms between the two on innovation ambidexterity. This study aims to investigate these trade-off mechanisms and their position on innovation ambidexterity.

Given the limited theoretical understanding, the authors conducted a case study with a sample of two Chinese firms with abundant interview and secondary data.

The results show that firms can develop innovation ambidexterity at two levels, namely, the time and space levels, using incentive synergy as well as organizational structures. Furthermore, the authors explain the role of the trade-off between incentive synergy and organizational structure in promoting a balance between explorative and exploitative innovation.

The authors propose trade-off mechanisms between incentive synergy and organizational structure and explore how trade-off mechanisms can play a role in promoting a balance of explorative and exploitative innovation at both time and space levels.