Effective sense-and-respond strategies: Mediating roles of exploratory and exploitative innovation

• Published in: Journal of business research 2019-01, Vol.94, p.154-161
• Main Authors: Ngo, Liem Viet, Bucic, Tania, Sinha, Ashish, Lu, Vinh Nhat
• Format: Article
• Language: English
• Subjects: Emerging markets; Exploitative innovation; Explorative innovation; Sense-and-respond strategies
• ISSN: 0148-2963; 1873-7978
• DOI: 10.1016/j.jbusres.2017.10.050

Integrating the dynamic capabilities view of the firm with ambidexterity theory, this article proposes a sense-and-respond performance framework, in which technology- and market-sensing capabilities drive explorative and exploitative innovation activities, which then determine firm performance in an emerging market. With a sample of 150 Vietnamese firms, this study shows that exploratory and exploitative innovations are salient modi operandi through which the effects of technology-sensing and market-sensing capabilities affect firm performance. No performance-related empirical evidence supports the proposed complementarity between exploratory innovation and exploitative innovation. Instead, the findings imply that a firm's ability to compete in a complex market depends on its possession of adaptive capabilities. •We present a sense-and-respond performance framework with explorative and exploitative innovation•Exploratory and exploitative innovations mediate technology- and market-sensing capabilities•No support for complementarity between exploratory innovation and exploitative innovation•A firm’s ability to compete in a complex market depends on its possession of adaptive capabilities