Market Orientation, Generative Learning, Innovation Strategy and Business Performance Inter‐Relationships in Bioscience Firms

Abstract

We propose conceptual arguments to establish relationships between market orientation and generative learning and their respective impact on exploitative innovation strategy and explorative innovation strategy. We then consider the ambidextrous association between both forms of innovation strategy and business performance. This model is subject to an empirical test using data generated from 160 bioscience firms. Using structural equation modelling, two mutually exclusive paths are specified where market orientation leads to exploitative innovation strategy, while generative learning leads to explorative innovation strategy. We then find that the ambidexterity exhibited by firms in the form of exploitative innovation strategy and explorative innovation strategy significantly explains improvements in firms' business performance. Discussion is given to these findings and managerial implications are presented along with avenues for further research. Copyright (c) Blackwell Publishing Ltd 2008.

Dynamic Client Portfolios as Sources of Ambidexterity: Exploration and Exploitation Within and Across Client Relationships

“…Beckman et al, 2004;Ferrary, 2011;Grant and Baden-Fuller, 2004;Kauppila, 2010;Lin et al, 2007;Rothaermel and Deeds, 2004;Vassolo et al, 2004). Likewise, many discussions of client relationships sharply delineate the pursuit of new knowledge for and with emerging clients from the pursuit of knowledge for and with existing clients (Cegarra-Navarro and Dewhurst, 2007;O'Reilly and Tushman, 2008), considering orientation towards emerging clients as a form of "generative learning" or exploration (Morgan and Berthon, 2008). Hence, it is only at the aggregate level that clusters of independent exploration and exploitation relationships collectively create the balance and superior performance that is typical of ambidexterity (Lavie and Rosenkopf, 2006;Lin et al, 2007;Morgan and Berthon, 2008;Rothaermel and Deeds, 2004;Simsek, 2009).…”

“…Likewise, many discussions of client relationships sharply delineate the pursuit of new knowledge for and with emerging clients from the pursuit of knowledge for and with existing clients (Cegarra-Navarro and Dewhurst, 2007;O'Reilly and Tushman, 2008), considering orientation towards emerging clients as a form of "generative learning" or exploration (Morgan and Berthon, 2008). Hence, it is only at the aggregate level that clusters of independent exploration and exploitation relationships collectively create the balance and superior performance that is typical of ambidexterity (Lavie and Rosenkopf, 2006;Lin et al, 2007;Morgan and Berthon, 2008;Rothaermel and Deeds, 2004;Simsek, 2009). However, a few authors offer a different perspective, suggesting that differentiating external relationships by their purpose may be inappropriate, because each one can be a source of ambidexterity in its own right, fulfilling functions of both exploration and exploitation simultaneously (Holmqvist, 2004;Im and Rai, 2008;Koza and Lewin, 2000).…”

“…This broadens the potential to understand the role of a more diverse set of external relationships, and connects ambidexterity to the conduct of everyday business, rather than separate strategic initiatives. Third, in contrast to the current focus on the performance benefits of external sources of ambidexterity (Im and Rai, 2008;Morgan and Berthon, 2008), our model centres on how these benefits are attained. Specifically, we unpack the process and the activities by which KIFs attain knowledge from clients, engage in exploration and exploitation within and across client relationships in their portfolio, and do so dynamically over time.…”

An investigation on the effects of organizational memory and human capital on innovation and absorptive capacity

“…As innovation in developing countries needs more capital and talents, the human capital (HC) is a key factor of innovative performance and it plays a determinant role in absorption and adaptation of overflowing technology through merchandise import, direct foreign investment input flow, and consequently development of innovative activities (Ping & Qingchang, 2008). People are considered as the most important factor of exploitation of foreign knowledge; and knowledge focus in business environment is highly dependent on external information sources in order to develop innovation and improve performance of the company (Morgan & Berthon, 2008). Organizational memory (OM) is another element apart from human capital, which leads to organizational innovation.…”

Competitive Strategy and Performance in Mexico, Peru, and the United States

“…Hence, both typologies present innovative and low cost strategic alternatives. Empirical work testing both typologies has largely supported positive links between both approaches and performance (Allen & Helms, 2006;Moore, 2005;Morgan & Berthon, 2008;. Although such tests in developing nations are not as plentiful, similar links would be expected in the United States, as well as in Mexico and Peru.…”